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Wind is bringing investors independent ESG ratings for Chinese listed companies


China-based financial information provider Wind is rapidly expanding its ESG ratings of Chinese stocks and recently picked up an award for its work from Euromoney Institutional Investor. The company is working with a number of financial institutions to provide what it calls “professional, independent and objective ESG ratings services.”

Shanghai-based Wind originally launched its ESG ratings for Chinese stocks in 2021, and based these off domestic and international ESG-related policies and standards. This includes unique data analysis capabilities within Wind itself that are tailored to the characteristics of Chinese companies.

Based on thorough research on international standards and guidelines including ISO 26000, SDGs, GRI Standards, SASB Standards, TCFD Recommendations and others, Wind combines the policies and status quo of ESG disclosures of Chinese companies and leverages its strong data collection, analysis and processing capabilities to build a unique ESG rating framework for companies in Greater China Region.

In addition, Wind ESG data and rating services are tailored to 68 industries based on Wind’s 25 years of in-depth understanding of the industries.

So what gets covered?

The Wind ESG Rating database covers more than 9,500 companies, including all China A-share and Hong Kong listed companies, key issuers of public offering debenture and Chinese ADRs, and over 8,000 mutual fund ESG ratings. The database also includes over 20,000 data sources, covering self-disclosure by listed companies, government and regulatory agencies, more than 8,000 media, and over 800 industry associations and NGOs, thus providing investors with the most comprehensive ESG data and solving the problems of low ESG information disclosure rates and scattered data sources.

To address the problem of unstandardised ESG data disclosure, Wind employs leading AI and big data technologies, as well as a rigorous data quality control process and standards to ensure the timeliness and accuracy of data processing, verifying the quality of data comprehensively before and afterwards, and providing investors with more accurate ESG data and daily data updates.

Why we like the look of these ratings

The database goes a step further than some other ESG databases I’ve worked with in the past. Wind identifies the subsidiaries of listed companies through equity penetration and builds a regional environmental risk assessment model based on regional environmental conditions to help investors understand the actual environmental risk exposure of companies’ operations, making underlying risks clear at a glance.

In addition, due to the lagging nature of ESG information disclosure, investors are often unable to receive timely ESG risk warnings. Grounded on a powerful risk control database, the Wind ESG Rating can quickly identify major controversial events derived from news, regulatory penalties, and the lawsuits of listed companies and affiliates, helping investors to be the first to learn about the company’s ESG risks. This can be incredibly insightful for foreign investors trying to navigate their ESG risks within Chinese markets.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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