The ESG Practices of Chinese State-owned Enterprises in Cambodia ; ISEAS Perspective ; Issue: 2021 No. 140
The state of Chinese companies' Environmental, Social, and Governance (ESG) reporting gained some momentum after China announced its ambition to achieve carbon neutrality by 2060. The key indicators of ESG include those concerning (1) The environment: Climate change, greenhouse gas emissions, waste and pollution, resource depletion, land use and biodiversity; (2) Social conditions: labour standards, diversity and inclusion, health and safety, data privacy, product safety and responsibility, learning and development, and; (3) Governance: Board diversity, bribery and corruption, executive compensation, shareholder rights and business ethics. The strategy suggested by Chinese corporations includes reviewing industry megatrends and peer performance, identifying opportunities created by the ESG movement, and embedding ESG into the company's vision and growth strategies. However, policy implementation remains an issue. Based on official policy, China's economy is transitioning from "brute-force economic expansion" to a growth model that focuses more on "inclusive and environmentally sustainable growth", in which ESG adoption by Chinese companies is instrumental. ESG can be another source of China's soft power projection as China's implementation of ESG presents "a serious shift towards meeting global standards and domestic-level sustainable development objectives". However, there are loopholes and gaps in implementing ESG standards, especially among Chinese investors overseas. This paper aims to shed light on the practices of Chinese state-owned enterprises regarding ESG application in Cambodia.