Implications for China's Path under the European Union Environmental, Social and Governance Regulatory Framework

Abstract

Environmental, social, and governance (ESG) is a hot topic in all countries. Against the backdrop of global ESG issues becoming focal points of attention, organizations worldwide are vigorously advancing sustainable development goals starting with climate governance. As global investors demand more transparent and accurate information under the vision of sustainable development, this places greater challenges on ESG regulatory frameworks. This paper examines the EU's Corporate Sustainability Reporting Directive (CSRD) and Document 2024R3005 as key case studies, conducting an in-depth analysis of the historical evolution and legal framework of European Union (EU) ESG regulations. It focuses on the refinement of three indicators and the level of information disclosure, aiming to provide insights and recommendations for China's ESG regulatory system based on past developments and future directions. Through comparative analysis, it highlights three key measures for China's future development: regulatory coordination in response to past evolution, standardization versus fragmentation of information, and alignment with an empowering international environment. This paper provides ideas and enlightenment for the development of ESG in China.