EU Dual Approach to Regulating ESG and Its Impact on China-Sustainable Finance and Sustainable Corporate Governance
The concept of environmental,social and governance(ESG)embodies the value of sustain-able development that takes into account economic,environmental,social and governance ef-ficiency,which has gradually gained international recognition since it was first proposed by the United Nations Global Compact in 2004.The EU has adopted the most stringent approach to regulating ESG and formed a regulatory path divided into two directions.Under the frame-work of sustainable finance strategy,the EU's approach aims to build a sustainable financial value chain and to facilitate the flow of ESG data through mandatory information disclosure.In comparison,the EU's approach under the sustainable corporate governance strategy focu-ses on the so-called"chain of activities",the statutory scope of which is more flexible than the terms of value chain or supply chain.This approach not only expands the scope of manda-tory information disclosure,but requires the companies to exercise ESG due diligence along the"chain of activities",and clarifies corporate liability for damages by its links with the core provisions of international human rights and environmental protection treaties.Taking the EU's ESG regulatory approach as a reference can help China build an ESG regulatory system which both meets international standards and embodies Chinese characteristics.
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