【ESG News】Global Trends Biweekly Newsletter Issue 34 (2025.5.19-2025.6.1)

Hong Kong China ESG trends

Deputy Secretary for Commerce and Economic Development Attends Opening Ceremony of Asia-Pacific SME ESG Forum and Delivers Speech

In his speech at the opening ceremony of the Asia-Pacific SME ESG Forum, Dr. Chan Pak-li emphasized the importance of ESG (Environmental, Social, and Governance) to the sustainable development of Hong Kong. He mentioned that sustainable development is a global trend, and investors and professionals in Hong Kong value a safe and stable environment, harmonious society, and good corporate governance. For large enterprises or listed companies, ESG has been integrated into their governance structures and business decision-making processes. However, SMEs may face difficulties in implementing ESG, such as increased compliance costs and a lack of professional knowledge. Dr. Chan highlighted the significance of SMEs to Hong Kong's economy and expressed his expectation to work closely with the industry to promote the development of ESG among SMEs in Hong Kong.

Source: https://sc.isd.gov.hk/TuniS//www.info.gov.hk/gia/general/202505/30/P2025053000330.htm?fontSize=1 

Lianhe Green Insights

The hosting of this Asia-Pacific SME ESG Forum highlights Hong Kong's commitment to sustainable development. In his speech, Deputy Secretary for Commerce and Economic Development, Chan Pak-li, emphasized the pivotal role of ESG in Hong Kong's economy and proposed concrete support measures. These initiatives will not only help enhance the international competitiveness of businesses but also pave the way for Hong Kong to achieve its carbon neutrality goals.

International ESG trends

Parliament supports proposals to simplify EU carbon leakage instrument

On May 22^nd, the European Parliament approved the proposal from the European Commission, which is part of the "Omnibus I" simplification package presented on February 26, 2025. Members of the European Parliament passed only technical amendments aimed at clarification and supported setting a minimum mass threshold of 50 tons. This will exempt the vast majority (90%) of importers, mainly small and medium-sized enterprises and individuals, who import only small quantities of CBAM goods from this restriction. The environmental objectives of the CBAM can still be achieved, as 99% of total CO2 emissions from imports of iron, steel, aluminum, cement, and fertilizers will still be governed by the rules.

For the imports covered, these changes also simplify the authorization process for declarants (parties wishing to import goods subject to the CBAM), the calculation of emissions, and the management of CBAM financial liability, while strengthening anti-abuse provisions.

Source: Parliament supports proposals to simplify EU carbon leakage instrument | News | European Parliament

Lianhe Green Insights

The simplified CBAM threshold sends a clear message: the EU values the effective implementation of the mechanism over increasing administrative burdens. While this adjustment eases compliance pressure on small-scale exporters in the short term, as with other carbon and ESG-related policies, it also reinforces an expectation that as the mechanism matures, all exporters—regardless of size—may eventually face the same carbon accountability requirements.

Mainland China ESG trends

Li Qiang Chairs State Council Executive Meeting, Approves Manufacturing Green and Low-Carbon Development Action Plan (2025-2027)

The meeting pointed out that promoting the green and low-carbon development of the manufacturing industry is the trend of the times. It is necessary to accelerate the innovation of green technology and the promotion and application of advanced green technologies, and to strengthen the green foundation of the new type of industrialization. The deep green transformation of traditional industries should be advanced, actively applying advanced equipment and processes in conjunction with the implementation of policies such as large-scale equipment updates, and accelerating the green transformation and upgrading of key industries. The green development of emerging industries should be guided from a high starting point, increasing the promotion of clean energy and green products, and improving the level of resource recycling. It is important to strengthen the research on common technologies, improve standards in key areas, optimize relevant policies, and improve the green manufacturing and service system to better support and assist enterprises in transforming and upgrading.

Source: https://www.mee.gov.cn/ywdt/szyw/202505/t20250523_1120009.shtml 

Lianhe Green Insights

The meeting clarified tasks in various aspects and made comprehensive arrangements for the green and low-carbon development of the manufacturing industry, demonstrating China's determination in industrial transformation during the new era. Green technology innovation is the core driving force, and increased investment should be made to break through key bottlenecks, allowing the full release of technological dividends. The green transformation of traditional industries requires dual drivers of policy and market to stimulate the internal momentum of enterprises.

Ministry of Commerce Issues Plan for Deepening Reform and Innovation in National Economic and Technological Development Zones to Lead High-Quality Development with High-Level Opening Up

It is reported that the Ministry of Commerce recently issued the “Plan for Deepening Reform and Innovation in National Economic and Technological Development Zones to Lead High-Quality Development with High-Level Opening Up” (hereinafter referred to as the "Work Plan"), which clearly proposes to support green and low-carbon development. It encourages national-level economic and technological development zones (ETDZs) to implement market-based transactions for distributed power generation and actively participate in green certificate and green electricity trading to enhance the consumption level of green electricity. The plan supports the improvement of corporate carbon emission accounting and product carbon footprint management systems, and explores promoting the use of green certificates by companies in carbon emission accounting and carbon footprint management. It encourages pilot projects for joint innovation in pollution reduction and carbon emission reduction in national ETDZs, and the creation of pilot parks for carbon peak achievement. The plan encourages national ETDZs to enrich the supply of green financial services, vigorously develop green, low-carbon, and circular industries, and actively establish green industrial parks and demonstration zones for ecological civilization construction (eco-industrial parks). It promotes the legal advancement of environmental impact assessments for the planning of national ETDZs and supports qualified national ETDZs in carrying out pilot reforms for in-depth environmental impact assessments.

Source: https://wzs.mofcom.gov.cn/zcfb/art/2025/art_da2131cdc5fd4cc9987e697c6be9f40f.html 

Lianhe Green Insights

The Ministry of Commerce’s initiatives to promote the green transformation of economic development zones drive with a dual mechanism of market-based trading and innovation in carbon accounting, integrating green certificates into the carbon management system to form a closed loop. This demonstrates a strategic upgrade of China’s industrial parks from passive emission reduction to actively building a low-carbon value chain.

National Plan for the Construction of Climate Change Response Standard System Issued

The Ministry of Ecology and Environment and 14 other departments have jointly issued the "National Plan for the Construction of Climate Change Response Standard System". This plan closely follows the goals and tasks of building a beautiful China and addressing climate change. It focuses on the basic capacity support and the needs for mitigation and adaptation to climate change, aiming to establish a national standard system for climate change response that is in line with the country's conditions and essentially complete. The plan has clarified the objectives for the construction of the national climate change response standard system.

The "Construction Plan" sets up a framework for the construction of the climate change response standard system from three aspects: basic capacity, climate change mitigation, and climate change adaptation. It further divides into 15 secondary standards and 45 tertiary standards, detailing the positioning and role of each secondary subsystem, as well as the key tasks for standard formulation and revision.

The basic capacity support standard system mainly includes four types of standards: basic general standards, greenhouse gas accounting standards, greenhouse gas verification standards, and greenhouse gas monitoring standards.

The climate change mitigation standard system includes six types of standards: climate change mitigation action standards, market mechanism management specifications, greenhouse gas emission standards, technical specifications for the coordinated management of greenhouse gases and pollutants, climate change mitigation evaluation standards, and climate change mitigation technology management specifications.

The climate change adaptation standard system includes five types of standards: climate change observation and projection standards, climate change impact and risk assessment standards, climate change adaptation action standards, climate change adaptation technology standards, and climate change adaptation action effectiveness evaluation standards.

Source: https://www.mee.gov.cn/xxgk2018/xxgk/xxgk03/202505/t20250530_1120372.html 

Lianhe Green Insights

The “Construction Plan” systematically fills the gaps in China’s climate change response standard system, establishing a complete framework covering three core areas: basic accounting, mitigation actions, and adaptation strategies. By finely dividing into 15 secondary and 45 tertiary standards and clarifying key tasks, it provides clear and actionable guidance for climate actions to governments at all levels and businesses, which will greatly enhance the standardization and effectiveness of national climate governance.