The State Environmental Protection Administration (SEPA) is
attempting to force Chinese companies, both listed and those
waiting to be, to regularly reveal environmental information to the
public.
Disclosure rules for listed companies could be finalized in the
next six months, Ge Chazhong, an official affiliated with SEPA,
told China Daily.
Environmental disclosure and inspection requirements have
already been tightened for companies applying for their initial
public offer (IPO) of shares.
Companies going public are required by China's existing
securities regulations to guarantee disclosure of truthful
environmental details together with financial records in IPOs 36
months prior to floating.
Deliberate or premeditated cover-ups risk administrative penalty
and criminal conviction, according to regulations enacted in May
2006.
Ge said SEPA officials are now working on specific terms for
compulsory corporate environmental disclosure for enterprises
already listed.
He said he hopes for cooperation with the China Securities
Regulatory Commission (CSRC) to develop a new set of regulations by
mid-2008.
At a recent forum on environmental protection and financial
service in Beijing, Ge criticized Chinese public companies for
generally poor environmental disclosures containing only
"qualitative descriptions" and "scant information".
Some 2006 annual reports included "just a few characters" or "a
dozen or so characters" on their environmental responsibilities, he
lamented.
But in future, SEPA and CSRC will seek to force public companies
to provide detailed information in annual reports.
Proper environmental disclosure by publicly listed companies is
a key issue because they feature among the country's largest
enterprises and have an important bearing on the overall economy,
Ge pointed out.
Companies may soon be forced to report key emission indexes,
such as SO2 and CO2, and records and goals in energy efficiency and
emission cuts, along with investment-related data.
If companies fail to comply with the Environmental Protection Law and government
regulations, fail also to disclose their environmental performance
or release false information, they will be subject to penalty by
law and be blacklisted on government websites.
"Once the first draft comes out, we will start consulting with
the CSRC and corporate representatives to revise for the final
version," Ge told China Daily.
He also mentioned a study that found just half of 200 Chinese
public companies included environmental details in their 2006
annual reports, with none specifying emissions data and pollution
control investment.
Future mandatory environmental disclosure will, according to Ge,
facilitate environmental law reinforcement and prompt people to
duly weigh environmental factors in investment decisions.
(China Daily December 24, 2007)