Sustainability Reporting in China: Chronological development and evidence from China Petroleum & Chemical Corporation (Sinopec Corporation).

Abstract

The idea of sustainability has transcended its traditional meanings to emerge as a cornerstone of contemporary business strategy. Environmental, social, and governance reporting (ESG) is a measure to achieve transparency about a firm's performance and a means of communication with stakeholders and investors. China, a significant actor in the global arena, is positioned at the crossroads of social change, environmental problems, economic growth, and improved governance, the gradual adoption of ESG principles within its business landscape shows a response to global sustainability trends while also supporting China's goals of harmonious development and global leadership. While it was not always a strict requirement, the Chinese government, the Shanghai and Shenzhen Stock Exchanges and other regulatory bodies have all taken significant steps to promote ESG disclosure among listed companies and other entities. The major regulations issued so far are chronologically reported in the first chapter and later analyzed within the cultural and historical context. The regulations have all been read, translated, and compared to the English versions, and eventually, some considerations on the nature of the words used in the English translation have emerged because translations into other foreign languages must take into account the semantic scope to which the original Chinese terms belong. This study, therefore, undertakes to observe the terms in Chinese and suggest a correct translation that is consistent with the non-compulsory nature of issuing ESG information reports in China. The second chapter examines the roles of key players whose contribution has been seen in the efforts aimed at intensifying the number of ESG reports published by Chinese companies, increasing the number of firms that decide to adhere to ESG disclosure, and promoting transparency among the information shared. The last chapter is composed of an empirical study in which a Chinese-listed company from one of the most polluting industries, the petrochemical and petroleum one, is analyzed. China Petroleum & Chemical Corporation is a Chinese enterprise, fully owned by the State, working in the petroleum and petrochemical industry and whose parent company Sinopec Group is the world's largest oil refining, gas, and petrochemical conglomerate with headquarters in Beijing's Chaoyang District. The purpose of the last chapter is to verify whether the regulations reported in the first chapter, in light of the role played by the issuing body and the type of ownership, could have influenced the overall ESG performance of Sinopec Corporation over the years.