Recently, under the guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange has formulated and finalized the “Special Action Plan for Promoting the Improvement of ESG Ratings of Listed Companies on the Shanghai Stock Exchange” (hereinafter referred to as the “Action Plan”). The Action Plan implements the requirements for promoting the entry of long-term capital into the market and doing a good job in the “five major financial tasks,” and is consistent with the “Three-Year Action Plan for Promoting the Improvement of ESG Information Disclosure Quality of Listed Companies on the Shanghai Stock Exchange (2024-2026).” It aims to further enhance the ESG rating levels of listed companies on the Shanghai Stock Exchange.

ESG ratings are a direct reflection of a listed company's comprehensive performance across the three dimensions of environmental, social, and corporate governance, and serve as an important basis for investment institutions to screen eligible investment targets and construct investment portfolios.

In recent years, the global scale of ESG asset investments has grown rapidly, with projections indicating it will exceed 50 trillion U.S. dollars by 2025. As an increasing number of investment institutions incorporate or integrate ESG rating factors to enhance the long-term returns of their active and passive investment portfolios, listed companies with higher ESG ratings are more likely to be included in ESG indices and ETF portfolios, receive higher investment weights, and attract more long-term, value-based, and responsible investments.

Data shows that Shanghai-listed companies with an MSCI ESG rating of AAA have an average foreign-held market value of 35.6 billion yuan and an average foreign ownership ratio of nearly 5%, which are 21 times and 2 times higher than those of companies with a CCC rating, respectively. Therefore, promoting the improvement of listed companies' ESG ratings can not only enhance their intrinsic motivation to actively fulfill environmental protection and social responsibilities but also demonstrate their latest practical achievements in implementing ESG concepts, thereby promoting the two-way conversion of “green mountains and clear waters” into “golden mountains and silver mountains.”

In recent years, the ESG rating levels of listed companies on the Shanghai Stock Exchange have shown a strong upward trend, with a number of globally leading listed companies emerging.

As of the end of 2024, a total of 342 listed companies on the Shanghai Stock Exchange were included in the MSCI ESG rating, among which 100 companies saw their ratings upgraded in the latest round of ratings, 10 companies saw their ratings rise by 2-3 levels, and 8 companies achieved AAA-level ratings, placing them at the global leading level. The number of companies with AAA-A ratings has significantly increased to 52.

From the perspective of domestic ratings, as of May 2025, 22% of Shanghai-listed companies saw an increase in their CSI ESG ratings compared to the same period last year. Among them, 83 companies saw their ratings rise for two consecutive years, and 114 companies saw their ratings jump by 2-4 levels. Over 70% of Shanghai-listed companies received AAA-BB ratings from CSI ESG, and 20% of Shanghai-listed companies received AAA-A ratings. However, compared with international peers, the number of companies with ESG ratings at the global leading level is relatively small, and the performance of some issue indicators still needs to be continuously improved, indicating that there is still room for improvement in ESG rating levels.

The action plan focuses on the core objective of improving the ESG ratings of listed companies on the Shanghai Stock Exchange. It addresses key and challenging issues related to ESG rating improvements and introduces six major initiatives.

First, provide rating guidance. In conjunction with the key issues of concern to rating agencies, accelerate the development of more issue-specific guidelines, and provide specific guidance on governance structures and management capability enhancements, as well as more targeted disclosure examples for key rating indicators. Conduct in-depth research on various rating methodologies and strengthen their dissemination, analyze ESG management performance and rating results by industry, and enhance rating guidance for listed companies.

Second, promote communication and exchange. Actively build bridges of communication between listed companies and rating agencies, and launch various specialized training and industry sharing activities. Support listed companies and rating agencies in strengthening interaction on data, scores, rating reports, and other issues. Support listed companies and institutional investors in actively participating in the construction of rating methodologies and soliciting opinions. Promote rating agencies to reflect the ESG information disclosure system requirements of the A-share market in their rating methodologies.

Third, improve information disclosure. Encourage listed companies to proactively identify issues of financial importance and strengthen the analysis and disclosure of financial impacts in accordance with the four-element disclosure framework to better meet the decision-making needs of investors. Accelerate the drafting and application of relevant standards for the “Electronic Standards for Sustainable Development Reports of Listed Companies,” strengthen data sharing, and improve the availability and reliability of ESG disclosure data and alternative data.

Fourth, establish best practices. Summarize best practice models for listed companies to benchmark against by compiling case studies of companies leading in international ESG ratings and CSI ESG ratings. Organize industry benchmark companies to share experiences, focusing on industry-specific issues, industry-specific risks, and common corporate governance issues, to help listed companies identify gaps and develop improvement plans, and address shortcomings in industry-specific rating indicators.

Fifth, strengthen positive incentives. Innovate and enrich ESG financial services and investment products, support financial institutions in incorporating ESG ratings into the development of various financing products such as equity, credit, and bonds, and increase efforts to develop various ESG-themed, green-themed ETFs, and ESG index-tracking fund products. Encourage social security funds, public funds, asset management institutions, and others to incorporate CSI ESG ratings into investment decision-making factors.

Sixth, improve management performance. Encourage listed companies to introduce professional investors as active shareholders to participate in corporate governance, leveraging professional expertise to enhance ESG management performance and rating levels. Strengthen listed companies' market capitalization management to assist more companies in being included in the ESG rating scope, and support listed companies that are not currently included in the rating scope but have the capability and need to engage in preliminary communication and initial ratings with rating agencies.

Going forward, the Shanghai Stock Exchange will, under the coordination of the China Securities Regulatory Commission, implement solid measures such as optimizing systems, strengthening guidance, and improving services to promote Shanghai-listed companies as practitioners and leaders of ESG principles, effectively enhance the governance levels and investability of Shanghai-listed companies, and support the high-quality development of the capital market.