The Webinar on ESG Disclosure was co-hosted by Crédit Agricole CIB, Industrial Bank of China, and Ernst & Young, on June 23. The webinar touched upon regulations and leading practices of ESG disclosure, with two cases from working group leaders, while bringing up suggestions for GIP members to further improve in this regard.

As introduced by Judy LI, Partner from the Climate Change & Sustainability Services Dept. at EY, ESG disclosure is required by an increasing number of stock exchanges worldwide, with a “comply or explain” mechanism and guidelines issued to formalize the content and format of disclosure. On the other hand, ESG factors are also increasingly taken into pre-investment decision-making within financial institutions.

The main point of establishing an ESG management system is to engage the decision-makers (the board of directors) to pay attention to sustainable development and ESG issues. In the case of China Industrial Bank presented by Quan CHEN, Senior Manager from the Green Finance Department, the regulatory requirement released by the CSRC in 2014 has been a major push in getting the Board of Directors to agree to disclose ESG information, especially the environmental performance of their businesses. The management structure should be top-down: from the decision-making level, to senior management and departments, and ultimately to the working level for execution.

Once the management policy and structure are in place, more granularity is needed in frameworks, standards, and indicators, as well as the formalization of the data collection process. In the Case of CACIB presented by Dominique DUVAL, Head of Sustainable Banking APAC and Carmen TSANG, Vice President of Sustainable Banking, its ESG criteria is evolving over the past years, to include the CSR performance of clients, as well as climate and environmental risks. Based on all the data collected, it utilizes its customized methodology to assess the materiality of climate risks, aligning with the TCFD recommendation.

The webinar concluded that developing ESG disclosure is going to be a long journey and there are still challenges regarding data availability and institutional capacity. The WG2 is dedicated to helping all GIP members to improve transparency in this regard and welcomes suggestions from members on how it can better assist.