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21 October 2021
Environmental issues/earth protection, general pollution and air pollution cited as major concerns
Among major global markets, Chinese consumers’ purchasing decisions the most influenced by ESG factors
Technology and banking & finance sectors voted most responsible on ESG issues
An inaugural 10-country global research study by SEC Newgate has found that three in four China citizens are strongly interested in environmental, social and governance (ESG) issues, with more than half expressing most concern with environmental issues and pollution. Reflecting this high level of interest, more than seven in ten (72%) participants stated that their perceptions of ESG affect their purchasing decisions; among major global markets, Chinese consumers are the most likely to boycott companies if they do not approve of their ESG practices.
The SEC Newgate ESG Monitor surveyed more than 10,000 people in Europe, the Americas and Asia-Pacific to gauge the public’s awareness and perceptions of ESG issues. A total of 1,045 people in China were polled.
Commenting, James Hill, Managing Partner, SEC Newgate Greater China said: “The findings of the SEC Newgate ESG Monitor demonstrate that Chinese people care deeply about ESG, in particular the environment, and are prepared to hold companies accountable for their failings. Based on insights from the survey, our advice to companies operating in China is to report in a transparent manner, prioritise responsible waste management, and use natural resources sustainably, as these factors are seen as most critical to Chinese people in driving positive perceptions and ESG ratings.”
“Interest in ESG issues is significantly higher in China than the global average, as is familiarity with the term ‘ESG’. This translates into a strong willingness to take action among Chinese consumers on the basis of perceived performance on ESG issues, either by rewarding a company or brand with the purchase of its goods and services or conversely by boycotting it online or offline,” Sue Vercoe, Managing Director, SEC Newgate Research, said. “For industries such as hospitality & gaming, cosmetics & personal care, and automotive, which are seen to be performing poorly from an ESG perspective, it is imperative to act now to rebuild consumer trust and protect their long-term futures,” she continued.
China deeply interested in ESG; environment tops the agenda
Nearly three in four survey participants from China (74%) said they are strongly interested in the ESG behaviour of government and companies. When asked about the one ESG issue they feel is most important, more than half (56%) mentioned the environment, which was in line with the global result of 52%.
Among environment-related themes, environmental issues and earth protection was most commonly mentioned (20%), followed by pollution (general 16% and air 13%) and waste management (8%). Participants in China are less interested in climate change, with only 4% of participants listing it as the most important issue versus 24% globally.
China corporates rated the highest for ESG performance; transparent reporting seen as a key driver of ESG ratings
When it came to rating ESG performance, Chinese companies scored 7.1 out of 10 in the average ratings, significantly higher than the global result of 5.7. Technology and banking & finance ranked first and second, garnering 7.9 and 7.5 out of 10, respectively. The hospitality and gaming, mining & resources, and the chemical industries received the lowest ratings at 6.7, 6.5 and 6.4 out of 10, respectively.
Modelling reveals that the specific factors that drive the overall ESG ratings of Chinese companies are “reporting in a transparent manner”, “responsible waste management practices” and “responsible and sustainable use of natural resources.”
Consumer activism in China outpaces other major global markets’
72% of Chinese participants affirmed that their perception of ESG affects their purchasing decisions, significantly ahead of the global figure of 51%.
Furthermore, Chinese consumers are most likely to take action on ESG issues compared to their counterparts in other major global economies. When asked what actions they had taken in the past two years, 60% (global: 45%) said they avoided using products or services of a company based on its ESG practices, and 54% (global: 36%) said they stopped following a company on social media after they behaved in a way they did not like or disagreed with. Nearly half (48%) said they discussed a company’s behaviour online or on social media, and 44% said they warned others against using a company because of their behaviour.
Similarly, Chinese people’s willingness to pay higher prices for products and services based on ESG performance is significantly higher compared with that of other markets covered in the survey. Three out of five participants said they would be willing to pay a lot more for food (China: 58% versus global: 31%) and technology (China: 58% versus global: 27%), and half (China: 50% versus global: 26%) were prepared to pay more for pharmaceuticals.
For more information on the global findings, please visit our dedicated website www.secnewgateesgmonitor.com/.
Download the SEC Newgate ESG Monitor 2021 China Report here: