The first research of its kind, "Sustainable Investment in China 2009", has been released by Business for Social Responsibility (BSR), according the World Bank Group's International Finance Corporation, which commissioned the report. The report surveys the sustainable investment (SI) landscape in China, identifies its challenges and makes recommendations for speeding up its growth.

According to the report, strong interest in SI in China is supported by recent developments. The increase in strategic management of ESG by Chinese companies suggests fertile ground for continued SI growth in China. Some Chinese companies have joined the first tier of global companies in corporate social responsibility (CSR) leadership, such as China Mobile, which was included in the 2008 and 2009 Dow Jones Sustainability Index.

Moreover, a growing number of Chinese companies are improving their extra-financial information disclosures. Due in part to guidelines established by the Shanghai and Shenzhen stock exchanges, more than 500 Chinese companies, including many listed on those exchanges, now release ESG reports annually-a significant increase in the past two years.

Taking advantage of these improvements, China's first mutual fund, the AEGON-Industrial Fund Management Co. Ltd, was launched in May 2008 and outperformed the market benchmark by 47 percent through June 2009.

Other evidence of increased SI activity in China includes the Shanghai Stock Exchange's release of a Social Responsibility Index in August 2009, and the Ministry of Environmental Protection's rejection of 20 companies' IPO applications in 2008 due to their environmental performance.

The growing interest in SI was also evident at BSR's recent Beijing event featuring the report. That roundtable, jointly organized with the United Nations-backed Principles for Responsible Investment, was well attended by local and international investors, research organizations, and civil society groups.