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MSCI ESG IVA Country Report: China

As China's economy continues to expand and its middle class grows the concept of sustainability and associated environmental, social and governance (ESG) factors are receiving greater attention from the general public and media. This has the potential to move markets as well as precipitate policy action – both systematic and sporadic – from the Central Government, which may see linkages between ESG factors and potential threats to social instability. Further, the recent 11th and 12th 'Five Year Plans' signaled a change in China’s development path towards a more sustainable growth model, with significant implications for companies’ operational and investment strategies. A number of new government policies will increase the sensitivity of company operations to ESG factors.