The selection and disclosure of environmental issues are an important part of corporate sustainability or ESG disclosure. Due to the differences in disclosure requirements and standards for sustainability or ESG information between domestic and international jurisdictions, various international organizations have issued different sustainability or ESG disclosure guidelines. Additionally, different rating agencies apply different criteria when conducting ESG ratings for companies. These factors collectively result in companies facing varying requirements or considerations when selecting environmental topics and determining the specific scope and content of their sustainability or ESG disclosures. This article examines domestic and international policies and regulations, selecting requirements for environmental topics in sustainability or ESG disclosures by listed companies from representative countries and regions worldwide. It also analyzes widely adopted standards from international organizations and rating methodologies used by ESG rating agencies. Through comparative analysis of environmental topic selection, disclosure scope, key indicators for disclosure content, and disclosure requirements, this article aims to assist companies in achieving high-quality sustainability or ESG information disclosure.

Ⅰ. Overview of Environmental Issue Scope in Domestic and International Sustainability or ESG Disclosure

Chinese mainland currently imposes mandatory sustainability or ESG disclosure requirements primarily on specific listed companies and listed companies controlled by central state-owned enterprises (SOEs). For specific listed companies, in April 2024, the three major stock exchanges—the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange—respectively issued the "Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)", the "Guidelines No. 17 of Shenzhen Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)" and the "Guidelines No. 11 of Beijing Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)" (collectively referred to as the "Sustainability Report Guidelines"). These guidelines require specified listed companies (including constituent companies of major market indices such as the SSE 180 Index, STAR 50 Index, SZSE 100 Index, and ChiNext Index, as well as companies listed both domestically and internationally) to disclose information on eight environmental topics in their sustainability or ESG reports. These include: climate response, pollutant discharge, waste management, ecosystem and biodiversity conservation, environmental compliance management, energy utilization, water resource utilization, and circular economy. Additionally, companies should identify and disclose other issues of financial or material significance based on their industry characteristics and other relevant circumstances.

For listed companies controlled by central SOEs, the Notice on Forwarding the "Research on the Preparation of Special ESG Reports for Listed Companies Controlled by Central SOEs" issued by the General Office of the  State-owned Assets Supervision and Administration Commission of the State Council (SASAC) in July 2023 provides a format reference for preparing special ESG reports. The SASAC has established a more detailed ESG reporting indicator system. For environmental issues, it sets 5 primary indicators, 18 secondary indicators, and 56 tertiary indicators covering information on resource consumption, pollution prevention and control, climate change, biodiversity, and resource and environmental management systems and measures. These requirements are more detailed than those outlined in the "Sustainability Report Guidelines."

1.Europe

In November 2022, the European Council issued the Corporate Sustainability Reporting Directive (CSRD), which serves as the core regulation for sustainability or ESG disclosure within the European Union. Under the CSRD, companies must disclose information on six environmental topics: climate change mitigation, climate change adaptation, water and marine resources, resource use and the circular economy, pollution, and biodiversity and ecosystems. In July 2023, the European Commission released the European Sustainability Reporting Standards (ESRS) as a complementary guideline to the CSRD, establishing disclosure standards for sustainability reporting. The ESRS specifies five environmental topics requiring disclosure: climate change, pollution, water and marine resources, biodiversity and ecosystems, and resource use and the circular economy. This essentially combines the CSRD's climate change mitigation and adaptation into a single climate change topic, which is generally consistent with the environmental disclosure requirements under the CSRD. The ESRS requires disclosures for each topic to be structured across four dimensions: governance, strategy, impact, risk, and opportunity management, and metrics and targets. Additionally, the ESRS establishes the principle of dual materiality for sustainable information disclosure, encompassing both impact materiality and financial materiality. This means EU companies must consider both the significant actual or potential, positive or negative impacts on humans or the environment in the short, medium, or long term, as well as the implications for the company's development and financial position when selecting environmental topics for disclosure.

2. Singapore

In April 2023, the Singapore Exchange (SGX) released the Core ESG Metrics document. In February 2024, the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange Regulation (SGX RegCo) published their response to the public consultation, clarifying that reporting entities should disclose sustainability information in accordance with the International Sustainability Standards Board (ISSB) disclosure standards (i.e., IFRS).

The environmental topics selected in the SGX Core ESG Metrics include greenhouse gas emissions, energy consumption, water consumption, and waste generation. Given its adoption of IFRS, environmental topics should also be selected in accordance with this standard. Additionally, SGX recommends issuers use these topics as a starting point for reporting to promote consistency and comparability in ESG disclosures. However, issuers should not be limited to the core ESG indicators and must still conduct materiality assessments to ensure the relevance and completeness of their reported metrics.

3. Hong Kong SAR, China

In April 2024, the Hong Kong Stock Exchange revised its ESG disclosure requirements in accordance with the "IFRS S2 Climate-related Disclosures" issued by the ISSB, and published the Environmental, Social and Governance Reporting Code (hereinafter referred to as the "Code"). Part C of the Code sets out "Comply or Explain" provisions, requiring issuers to disclose environmental topics including emissions, use of resources, environment and natural resources and climate-related disclosures under Part D—totaling four environmental topics. Additionally, Clause 8 of Part A provides that reports prepared by issuers in compliance with relevant IFRS provisions shall also be deemed compliant with Part D's climate-related disclosure requirements.

The Code's principles for sustainability disclosure include materiality, quantification, balance, and consistency. This means that when disclosing environmental topics, enterprises must explain the criteria for topic selection, adopt quantitative disclosure methods, describe statistical methodologies, and provide full explanations for any non-disclosure of specified environmental topics.

When disclosing sustainability or ESG information, domestic and international enterprises not only comply with the regulations of their home countries and listing exchanges but also draw upon widely applicable international standards from organizations such as the Global Reporting Initiative (GRI) and the International Sustainability Standards Board (ISSB).

1.Global Reporting Initiative (GRI) Standards

The Global Reporting Initiative (GRI) was established in 1997. Its "GRI Standards 2021", released in 2021, encompass General Standards, Sector Standards, and Topic-Specific Standards. For environmental topics, the GRI General Standards define the process for identifying topics, while the GRI Sector Standards specify the topics that particular industries should disclose. At present, published Sector Standards include those for the oil and gas industry, coal industry, agriculture, aquaculture, and fisheries. GRI topic-specific standards provide detailed disclosure requirements for specific environmental topics, covering six areas: materials, energy, water and wastewater, biodiversity, discharge, and waste.

Companies disclosing sustainability or ESG information in accordance with GRI standards should identify environmental topics through a materiality assessment process. They should select environmental topics relevant to their industry by referencing requirements in Sector Standards, and disclose specific content in accordance with topic-specific standards (if available). In selecting and disclosing environmental topics, GRI emphasizes dual materiality: financial materiality and impact materiality. The former serves investors by reporting information on the economic value created by the company. The latter serves multiple stakeholders—including investors, employees, customers, suppliers, and local communities—by reporting information on the company's economic, environmental, and human impacts.

2.International Sustainability Standards Board (ISSB)

The International Sustainability Standards Board (ISSB) was established in 2021 and issued International Financial Reporting Sustainability Standard 1—General Requirements for Disclosure of Sustainability-related Financial Information (hereinafter referred to as IFRS S1) and International Financial Reporting Sustainability Standard 2—Climate-related Disclosures (hereinafter referred to as IFRS S2; collectively referred to as IFRS standards) in 2023. IFRS S1 provides general requirements for environmental disclosures, covering four areas: governance, strategy, risk management, and metrics and targets. Regarding the selection of environmental topics, the sector-specific implementation guidance in IFRS S2 draws from the Sustainability Accounting Standards Board (SASB) standards, which are also developed by the ISSB. The sector guidance references SASB standards to specify environmental topics requiring disclosure across climate-related sectors, encompassing six areas: greenhouse gas emissions, air quality, energy management, water and wastewater management, waste and hazardous substance management, and ecological impacts. The ISSB standards further provide that, where not in conflict with their own requirements, the selection of environmental topics should also broadly consider provisions from other frameworks such as GRI and ESRS, assessing their applicability to support the achievement of both financial and sustainability objectives.

In practice, investors often obtain investment information by reviewing ratings assigned by various rating agencies to companies' sustainability reports or ESG reports. Companies also use these ratings as a basis for their promotional activities. Therefore, the ratings issued by rating agencies are very important for corporate development. This section selects well-known ESG rating agencies from both domestic and international markets as examples to analyze the environmental issues and evaluation criteria they incorporate into their rating methodologies.

1.Morgan Stanley Capital International (MSCI)

Morgan Stanley Capital International (MSCI) is an index provider based in the United States. As a global leader in ESG data and research services, MSCI has developed one of the most authoritative ESG rating systems internationally, serving as a benchmark in the global ESG evaluation field. This rating system serves a broad client base encompassing various investment institutions, listed companies, and other market participants.

MSCI has developed its own ESG Rating Methodology for ESG ratings. The purpose of MSCI's ESG ratings is to measure a company's resilience to long-term, financially material ESG risks and to provide insights into how companies manage financially material ESG risks and opportunities.

MSCI focuses on 10 core themes in ESG, with environmental issues encompassing five categories: climate change, natural resources, pollution, waste, and environmental opportunities, supported by 13 key indicators. MSCI has developed a rating methodology for each indicator. This approach emphasizes identifying environmental issues through assessments of key topics tailored to industry and company characteristics, selecting appropriate environmental issues for disclosure. MSCI assigns different weights to various issues based on their impact on environmental and social externalities, and finally conducts a comprehensive scoring to determine the rating.

2.Sino-Securities Index Information Service (Shanghai) Co., Ltd. (Sino-Securities Index)

Sino-Securities Index Information Service (Shanghai) Co., Ltd. (Sino-Securities Index) is an independent third-party professional service provider serving various asset management institutions in China and a signatory to the United Nations Principles for Responsible Investment (UNPRI). In ESG rating, it has established the Sino-Securities Index ESG Evaluation System. This rating system is built upon the core principles and developmental characteristics of ESG, drawing extensively on international experience while considering China's unique characteristics and practices to construct a scientific rating framework and indicator system. In recent years, its reports and rankings have exerted a profound influence on market participants including investment institutions and listed companies.

Regarding environmental issues, the environmental indicators designed in the Sino-Securities Index Rating Methodology aim to evaluate whether enterprises achieve their established environmental objectives, as well as their risk exposure (risks inherent to the industry) and risk management capabilities (measures taken and corresponding performance). Within the environmental topics, the Sino-Securities ESG evaluation system covers five environmental issues: climate change, resource utilization, environmental pollution, environmental friendliness, and environmental management. These five environmental issues are further subdivided into 17 secondary indicators. Sino-Securities Index assigns different weights to each indicator topic, adjusts scores depending on the industry, and finally determines the overall rating through a comprehensive scoring system.

Ⅱ. Comparison of Environmental Issue Scope and Disclosed Information in Domestic and International Sustainability or ESG Disclosure

Regarding the scope of environmental issue, the environmental topics required to be disclosed vary under the standards of different countries, regions, organizations, and rating agencies. This article uses the environmental topics that specific listed companies in Chinese mainland are required to disclose as a benchmark, comparing the scope and disclosure requirements for environmental issues in other countries, regions, international organizations, and ESG rating agencies. Overall, domestic and international sustainability or ESG disclosures exhibit the following characteristics in environmental issue selection:

First, there is widespread attention both domestically and internationally on corporate sustainability information regarding climate change, energy, and water resource utilization. Although the terminology used in different standards varies, they all emphasize that companies should disclose environmental issues related to climate, energy, and water resource utilization. Regarding specific terminology, the EU, Chinese mainland, MSCI, and Sino-Securities Index adopt the relatively broad concept of "climate change (or climate change response)," while Singapore, IFRS standards, and GRI standards opt for the narrower focus of "greenhouse gas emissions" as an environmental topic.

Second, regarding resource utilization, Chinese mainland, the EU, Singapore, GRI Standards, and IFRS Standards separately list water resource utilization as an issue, reflecting heightened emphasis on corporate water management. Additionally, the EU requires disclosure on "water and marine resources" as a distinct topic, whereas Chinese mainland does not cover marine resources.

Finally, Chinese mainland and the Sino-Securities Index separately list environmental compliance management as an environmental issue, demonstrating China's focus on corporate environmental compliance matters.

Although certain environmental topics are not listed separately in standards or rating methodologies, this does not imply that disclosure of relevant information is not addressed under indicators within other topics. Furthermore, even when environmental topics share similar names across different standards, it does not mean that the content requiring disclosure for these topics is entirely consistent. This section uses the environmental topics outlined in China's Guidelines for Sustainable Development Reporting as a benchmark. We conduct a comparative analysis of environmental topics specified by other selected countries, regions, international organizations, and ESG rating agencies. The goal is to summarize differences in disclosure metrics and specific information for environmental topics within domestic and international sustainability or ESG reporting frameworks.

1.Climate Change Response

Climate change response is a common environmental concern across all standards, involving relatively complex requirements. In addition to addressing governance, strategy, impacts, risks, and opportunity management related to climate change, specific disclosure metrics vary by country and standard. Examples include: setting carbon reduction targets; implementing carbon reduction practices and initiatives; disclosing the scope and volume of greenhouse gas emissions; and managing carbon credits, carbon trading, and carbon pricing.

In terms of setting carbon reduction targets, various standards and guidelines require companies to disclose their carbon reduction goals. However, the requirements for whether these targets should be quantified or scientifically grounded may differ. For instance, Chinese mainland, Hong Kong SAR, Singapore, and IFRS S2 all mandate disclosure of carbon reduction targets but do not impose mandatory standards for setting such targets. The European Union, however, imposes higher standards for the scientific rigor and feasibility of carbon reduction targets. It mandates that companies establish "Science-Based Targets initiative" (SBTi) and report progress regularly. The GRI Standards, meanwhile, encourage companies to follow SBTi or similar standards when setting their carbon targets.

Regarding carbon reduction initiatives or practices, Chinese mainland, Hong Kong SAR, and GRI all require enterprises to disclose greenhouse gas reduction practices and mitigation measures. If enterprises are involved in projects under other reduction mechanisms, they must also disclose relevant information and details on reduction volume registration and trading. The EU and IFRS S2 focus on requiring companies to disclose actions related to climate change mitigation and adaptation, as well as climate transition plans. Additionally, the EU mandates transparency in the disclosure of "carbon removal technologies" (such as CCUS) and "carbon offset strategies."

Regarding greenhouse gas emissions and their scope, various standards and rating methodologies provide specifications for the scopes of greenhouse gases that should be disclosed. Chinese mainland requires specific listed companies to disclose a narrower scope of greenhouse gases, mandating only Scope 1 and Scope 2 emissions. Disclosure of carbon emissions along the value chain is not mandatory but encouraged for entities with the capability. In contrast, the SASAC recommends that listed companies controlled by central SOEs disclose Scope 1, Scope 2, and Scope 3 emissions—a broader scope that remains non-mandatory. The EU, Singapore, GRI Standards, and IFRS S2 impose stricter requirements for corporate GHG scope disclosure, mandating reporting for Scope 1, 2, and 3 emissions. However, the EU, Singapore, and Hong Kong adopt a phased mandatory disclosure approach for Scope 3 emissions. Rating agencies such as MSCI and Sino-Securities Index primarily focus on corporate Scope 1 and 2 GHG emissions and emission intensity.

Regarding carbon trading and carbon credits, the EU indirectly promotes carbon trading markets through the CSRD, requiring companies to disclose information on carbon credits and internal carbon pricing. IFRS S2 also mandates disclosure of carbon credits, market participation, and the impact of carbon pricing on business models (e.g., carbon tax and carbon trading exposure). Meanwhile, Singapore, Hong Kong, and GRI encourage voluntary disclosure of corporate participation in carbon markets, including the purchase, sale, and utilization of carbon credits. Chinese mainland does not mandate disclosure of carbon trading or carbon credit information for all entities. Only relevant enterprises are required to disclose the sources and quantities of carbon credit allowances, the settlement status of carbon emission quotas, and participation in national voluntary greenhouse gas reduction projects, including the registration and trading of Certified Voluntary Emission Reductions (CCERs). For central state-owned enterprises (SOEs), disclosure is required regarding environmental rights trading. This extends beyond carbon emissions trading to include transactions involving energy rights, green electricity, and other environmental rights.

Overall, the standards established by China's three major stock exchanges and the State-owned Assets Supervision and Administration Commission (SASAC) set relatively clear requirements for climate-related information disclosure, grounded in China's national conditions and corporate development characteristics, while emphasizing alignment and coordination with international standards. The EU's standards are the most stringent and detailed, reflecting its ambitious goals and robust efforts in addressing climate change. Singapore and Hong Kong SAR, adopt international standards that regulate corporate disclosure while also prioritizing integration with local market realities. As globally recognized frameworks, GRI and IFRS standards offer high flexibility and adaptability. In contrast, the rating methodologies of MSCI and the Sino-Securities Index place greater emphasis on evaluating corporate climate performance from an investment and financial risk assessment perspective. When disclosing climate change-related information, enterprises should fully consider the requirements and characteristics of different standards, select appropriate disclosure frameworks and metrics based on their specific circumstances to meet the needs of all stakeholders, and enhance their own sustainable development capabilities and ESG management standards.

2.Pollutant discharge

Among pollutant discharge topics, only Chinese mainland, Hong Kong SAR, the EU, and the Hua Zheng Index have established similar topics. Singapore, GRI Standards, IFRS, and MSCI do not list this topic separately. However, GRI Standards' emission topic indicators and Sector Standards require disclosures related to pollutant discharge. IFRS also mentions pollutant discharge disclosures in its sector implementation guidance under IFRS S2.

Regarding pollutant discharge categories, GRI and IFRS standards explicitly specify the types of pollutants that should be disclosed, such as nitrogen oxides, particulates, and SO₂, with particular emphasis on ozone-depleting substances (ODS), dioxins/furans, volatile organic compounds (VOCs), polycyclic aromatic hydrocarbons (PAHs), and heavy metals. Chinese mainland, Hong Kong SAR, and the EU do not explicitly specify the types of pollutants that should be disclosed. However, Chinese mainland requires certain listed companies to disclose the types, names, and discharge volumes of major pollutants, characteristic pollutants, and controlled substances stipulated by international environmental conventions, along with pollutant treatment technologies and waste reduction measures. The EU mandates disclosure of the types of substances of concern (SOCs) and substances of very high concern (SVHCs), and requires disclosure of the local Air Quality Index (AQI) in areas where the company causes air pollution, the urbanization level of air pollution areas, and the percentage of pollutants discharged into water and soil by the company in water-stressed regions (including high-water-scarcity areas).

Regarding penalties or damages related to pollutants, Chinese mainland, the EU, and GRI standards all address these aspects. Chinese mainland requires specific listed companies to disclose significant administrative penalties or criminal liabilities incurred due to pollutant emissions. The EU mandates disclosure of remediation costs, compensation expenses, and government agency fines resulting from pollutants. GRI requires disclosure of ecological impacts caused by pollutant emissions.

Regarding pollutant emissions, third-party rating agencies focus on different aspects. MSCI addresses toxic substance emissions under its Toxic Emissions and Waste categories. While toxic substances encompass a narrower scope than pollutants, they pose greater risks. MSCI evaluates companies based on their reduction initiatives, scope of plans, release trends, and emission/leakage incidents related to toxic substances. The Sino-Securities Index focuses on industrial pollutant discharge and hazardous waste discharge.

3.Waste Management

Regarding waste management, most standards focus on total waste generation, treatment methods, and disposal practices. Chinese mainland, Hong Kong SAR, and GRI standards require companies to disclose total waste volumes and treatment/disposal methods separately for harmful waste, non-harmful waste, general industrial solid waste, and hazardous waste. The EU focuses on the total volume of waste generated and requires waste to be classified and disclosed according to hazardous waste, non-hazardous waste, and recycling status, along with details on incineration, landfill, and other disposal operations. Singapore and IFRS standards do not specifically mandate waste classification into harmful substances, non-harmful substances, general industrial solid waste, or hazardous waste for disclosure. However, IFRS focuses on the generation volume of different wastes and requires disclosure of the number of significant incidents related to hazardous waste management. Third-party rating agencies like MSCI and Sino-Securities Index place greater emphasis on electronic waste (e-waste) and its collection/disposal practices, while also examining the environmental impact of discarded materials.

Additionally, the EU, Singapore, and IFRS also focus on waste composition information. For instance, the EU requires disclosure of waste generation causes and the materials contained within the waste, which involves waste composition details. Singapore encourages companies to disclose relevant information including waste composition (e.g., hazardous vs. non-hazardous, recyclable vs. non-recyclable) where possible. IFRS mandates disclosure of the percentage of hazardous content across different waste types.

Meanwhile, the EU, Singapore, GRI Standards, and IFRS also focus on waste recycling information. For instance, the EU mandates disclosure of the total volume and percentage of unrecycled waste; Singapore requires disclosure of recyclable and non-recyclable waste components where feasible; GRI Standards mandate classification and disclosure of waste disposal information based on preparation for reuse, recycling, and other recovery operations; and IFRS requires disclosure of recycling percentages for different waste types.

4.Ecosystem and Biodiversity Conservation

Regarding ecosystem and biodiversity conservation, most standards require companies to disclose information on this topic, with only Singapore not mandating separate disclosure for this issue.

Chinese mainland and EU require disclosure of actions and outcomes related to ecosystem and biodiversity conservation. Additionally, the EU, Hong Kong, GRI, and IFRS require companies to disclose information on the impacts and risks of their production and operational activities on significant ecological areas.

Regarding wildlife and endangered species protection, the GRI Standards require disclosure of lists of species affected that are included in the IUCN Red List and national conservation registers; IFRS standards emphasize the percentage of affected land area and provide more detailed provisions for specific industries based on their characteristics. For example, companies in the coal, metals, and mining sectors are required to disclose information such as proven reserves and the percentage of potential reserves located near habitats of protected or endangered species.

Rating agencies such as MSCI and Sino-Securities Index consolidate biodiversity and land use criteria, focusing primarily on companies' commitments to biodiversity conservation, the scope of their initiatives, and actions—including stakeholder collaboration, habitat protection, and information regarding resource acquisition and disputes on land.

5.Environmental Compliance Management

Environmental compliance management is a unique environmental topic established by Chinese mainland for sustainable development or ESG disclosure, primarily focusing on the management of sudden environmental incidents and the disclosure of environmental violations. As a rating agency within China, Sino-Securities Index also evaluates the disclosure of environmental penalties as an indicator in its ESG assessments. Other countries and organizations do not impose specific requirements for companies to disclose environmental compliance management or emergency environmental incident management information. However, the EU mandates disclosure of fines imposed by government agencies for pollutant-related violations under its pollution disclosure requirements. Additionally, IFRS S2's sector implementation guidance requires companies in the coal industry to disclose the number of incidents involving violations of water quality permits, standards, and regulations under its water resource management disclosure requirements.

6.Energy Utilization

Energy utilization is another environmental issue receiving significant attention across standards and rating agencies. Most standards focus on total energy consumption. Regarding energy classification, Chinese mainland requires disclosure of total direct and indirect energy consumption, energy structure, and overall energy intensity, as well as the types, total volume, and proportion of different clean energy sources. Hong Kong and GRI standards primarily focus on total direct and indirect energy consumption and energy intensity. The EU, IFRS, MSCI, and Sino-Securities Index standards mainly emphasize the use, consumption, and proportion of clean or renewable energy, without specific requirements for direct and indirect energy. For instance, the EU mandates separate disclosure of energy consumption by source type (fossil fuels, nuclear energy, renewable energy) and imposes stricter disclosure requirements on industries with significant climate impacts.

Regarding energy targets and energy-saving measures, Chinese mainland and Hong Kong focus on energy efficiency targets and the measures to achieve them. The EU, Singapore, GRI, and IFRS do not explicitly mandate disclosure of energy targets or energy-saving measures.

Additionally, Chinese mainland emphasizes disclosure by central SOEs listed on domestic exchanges, as well as by rating agencies like MSCI and Sino-Securities Index, of specific measures and percentage targets related to green buildings and green production operations. This reflects a concern for green energy efficiency throughout the entire corporate lifecycle.

7.Water Resource Utilization

Regarding water resource utilization, Chinese mainland, the EU, Singapore, GRI Standards, and IFRS all treat water or water resources as a standalone environmental topic. Hong Kong, MSCI, and the Sino-Securities Index, however, classify water resource topics as indicators under resources (natural resources). Additionally, the EU imposes specific disclosure requirements for marine resources.

Regarding basic water utilization, all standards require companies to disclose information such as total water consumption and usage intensity. Chinese mainland, Hong Kong, the EU, and MSCI further require companies to disclose water conservation targets and measures to achieve them. The EU also highlights the need to disclose actions, impacts, risks, and opportunities related to marine resources. Additionally, the EU, GRI Standards, and IFRS require disclosure of the proportion of water withdrawals occurring in areas with high water stress (water risk) or high water scarcity, emphasizing the protection of water-scarce regions.

8.Circular Economy

Regarding circular economy topics, only Chinese mainland and the EU disclose it as a separate environmental issue. Hong Kong, GRI, and IFRS address circular economy-related content under other environmental topics. For instance, Hong Kong mentions circular economy aspects in indicators under resource use topics; GRI Standards incorporate circular economy elements in certain indicators under material topics, such as requiring disclosure of recycled material information. IFRS standards include circular economy indicators in IFRS S2 sector guidance, such as requiring disclosure of recycled material percentages in construction products and furniture, and building materials industries. Singapore has not established related topics or indicators, while rating agencies like MSCI and Sino-Securities Index have set similar scoring metrics under environmental opportunities and environmental friendliness topics.

Regarding specific disclosures related to the circular economy, Chinese mainland and the EU require disclosure of relevant targets, plans, and action measures established to achieve the circular economy. Chinese mainland further emphasizes progress and outcomes in realizing the circular economy, such as requiring disclosure of comprehensive waste utilization and the proportion of renewable energy consumption. The EU requires disclosure of resource inflows and outflows, along with associated risks and opportunities. Hong Kong, the GRI Standards, and the Sino-Securities Index reflect circular economy practices by requiring companies to disclose the use of recycled packaging materials or raw materials. Additionally, the GRI Standards and IFRS require disclosure of the percentage of recycled raw materials and the proportion of renewable products. MSCI focuses on evaluating corporate circular economy performance through indicators such as renewable energy opportunities and clean technology opportunities (e.g., investments in clean technologies, revenue from clean technology activities, and participation in clean technology initiatives).

*"Hong Kong" or "Hong Kong SAR" means the "Hong Kong Special Administrative Region of the People's Republic of China".

Source: King & Wood Mallesons