(Yicai) Feb. 22 -- China will introduce its first-ever environmental social governance disclosure guidelines for listed companies.

Firms included in the SSE 180 Governance Index, SSE Science and Technology Innovation Board 50 Index, SZSE 100 Price Index, and ChiNext Index, as well as those listed both in the Chinese mainland and offshore, will be required to issue a sustainable development report, according to the notice released to by the two bourses to solicit public opinion on Feb. 8.

The Beijing Stock Exchange said on the same day that it would encourage listed companies to release sustainable development reports but would not make them mandatory.

The guidelines will require companies to disclose information about related registration and trading in line with the China GHG Voluntary Emission Reduction and Chinese Certified Emission Reduction programs, efforts to support rural revitalization, and overdue payments to small- and medium-sized companies. Meanwhile, companies will not be required to disclose information about parties working along their supply chains, their affiliate entities, and other scenarios.

“Even though they were just released to solicit public opinion, the guidelines are a long-awaited milestone,” said Guo Peiyuan, chief expert at Chinese consulting service provider Bizado. “The release of the guidelines will significantly promote the standardization and improve the quality of ESG reports.”

The guidelines are relatively comprehensive as they not only encompass sustainable disclosure frameworks but also include specific thematic content related to the environmental, social, and governance fields, said Bao Jie and Shi Yichen, researchers at the International Institute of Green Finance of Central University of Finance and Economics.

Bao and Shi also suggested the bourses introduce a supporting toolkit to standardize the requirements for sustainable information disclosure and conduct related training, providing more guidance and support for listed companies.

Last year, 1,700 companies listed in the Chinese mainland, equal to about one-third of the total, disclosed sustainable development records. More than 3,000 of them, equal to nearly two-thirds of the total, disclosed information about their carbon reduction measures.

Editor: Futura Costaglione