Sustainability Leadership Briefs

For most businesses in China, including foreign firms, directly addressing the United Nations Sustainable Development Goals (SDGs) is unchartered territory. Many companies are still in the early stages of their sustainability journey in China, and existing programs often lack strategic intent or deep commitment. We see a tremendous opportunity for foreign firms to exploit areas of Chinese policy and SDG alignment to raise the impact and relevance of their sustainability programs in China.

China’s new Environmental Protection Tax Law (EPT Law) came into effect on January 1. It replaces the old Pollutant Discharge Fees System. Taxation could increase, as more headroom for localities allows to set higher tax rates. Some leveling of the playing field is possible, as non-compliance and tax evasion are addressed. Supply chain costs may be impacted.

Last winter’s air pollution control plan in the larger Beijing area was unprecedented both in scale and intensity. The action plan was part of a much broader, central government-led effort to tackle China’s pervasive air pollution problem and significantly ramp up environmental protection efforts in general. It is highly unlikely at this point that the government will backtrack on this issue, given the long-term economic and political ramifications of doing so.

The China Overseas NGO Management Law went into effect January 1, 2017. The law requires that foreign NGOs coordinate their efforts with the Ministry of Public Security (MPS) and provides the framework within which they can continue their activities in the country through two ways: opening a representative office in China or applying for a temporary activity license.