China’s Institute of Public & Environmental Affairs (IPE), National Center for Climate Change Strategy, International Cooperation (NCSC), and other agencies have jointly published a report that evaluates the greenhouse gas (GHG) emission reporting situation in the country, as reported by Sina on January 29. According to the report, Chinese enterprises still barely take initiative in disclosing GHG emission information, while the scope and quality of disclosure also have huge room for improvement.
In China’s 13th Five Year Plan for GHG management, State Council encouraged enterprises to proactively disclose their GHG emission information between 2016 and 2020, and required state-owned enterprises (SOE), listed firms, and companies under the pilot national carbon emissions trading scheme (ETS) to first publish their GHG data and the action plan to control GHG emissions. However, the country has not yet established a mandatory GHG reporting system on the national level.
So far, five provinces in China, including Shanxi, Sichuan, Jiangxi, Jilin, and Zhejiang, have already introduced compulsory GHG reporting requirements for enterprises. In Sichuan, key enterprises with annual GHG emissions of 26,000 tons of CO2 equivalent or more are forced to disclose their GHG information, and the provincial government has also established a platform to publicly exhibit such information. Jilin limits the scope to enterprises from eight key industries, including petrochemical, chemical, iron and steel, power, and else, but requires these firms to disclose both carbon dioxide (CO2) and methane (CH4) emission information. Zhejiang, on the other hand, requires all the power enterprises and listed companies included in the national ETS to publish their GHG data. Meanwhile, Henan has started gathering public opinion on its first GHG disclosure standard.
As the report suggests, the Chinese central government should immediately start developing a unified standard and guideline for GHG accounting reporting, and start mandating sustainability information disclosure as soon as possible. Moreover, a clear reward and punishment system should be established, while companies with favorable GHG emission performance should enjoy advantages in securing bank credit, winning government procurement orders, and else. Also, the government should formulate measures to calculate the life-cycle carbon emissions of enterprises, to evaluate a firm’s GHG performance based on its influence on the whole supply chain.