Shanghai Plans to Improve the ESG Capabilities of Foreign-related Enterprises

On February 26, 2024, Shanghai Municipal People’s Government held an executive meeting, calling for accelerating the establishment of the product carbon footprint management systems, creating green and low-carbon supply chains, improving the environment, social and governance (ESG) capabilities of foreign-related enterprises, and building world-class arbitration institutions.

The meeting principally approved the Three-year Action Plan on Improving the Environment, Social and Governance Capabilities of Foreign-related Enterprises in Shanghai (2024-2026), and the Action Plan on Further Strengthening the Capacity Building and Accelerating the Development of World-class Arbitration Institutions. It noted that businesses performing well in ESG disclosure and rated good will be given priority for the access to supportive policies in credit, foreign trade and consumption, and a calculation certification system that aligns with international rules will be built. The meeting also urges to promote the application of international rules and the “going out” of local certification standards, accelerate the establishment of the standards for the statistical calculation of the local product carbon footprints, help foreign trade firms achieve the “visibility, traceability and recognition” of their carbon footprints, and guide key industries such as steel and iron, chemicals, automobile, and electronics in pioneering the carbon footprint calculations.