Evaluation of China’s ESG Policy Texts Based on the “Instrument-Theme-Subject” Framework

Abstract

This study develops a three-dimensional evaluation framework integrating policy instruments, policy themes, and policy subjects to analyze China’s ESG (Environmental, Social, and Governance) policies. Based on 82 central government policy documents issued between 2007 and 2024, it employs content analysis, Latent Dirichlet Allocation (LDA) topic modeling, and social network analysis. The findings reveal a structural imbalance in policy instruments, with overreliance on environmental instruments and insufficient application of supply side and demand side mechanisms. Four major policy themes are identified: environmental governance, corporate responsibility and disclosure, technological innovation, and financial development. These themes show evolving priorities aligned with national strategies. Social network analysis shows weak coordination among stakeholders, with only a few central agencies driving most policies. This research contributes a systematic and quantitative approach to ESG policy evaluation, offering insights into structural shortcomings and governance fragmentation. It provides actionable recommendations for optimizing instrument use, enhancing thematic design, and improving multi-agency collaboration in ESG policymaking. This study contributes to the achievement of the United Nations Sustainable Development Goals (SDGs), particularly SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action), by evaluating China’s ESG policies and proposing a more balanced and pragmatic policy framework.

1. Introduction

In recent years, the Sustainable Development Goals (SDGs) have become a key agenda in global governance. The United Nations adopted the 2030 Agenda for Sustainable Development in 2015, outlining 17 SDGs and 169 specific targets covering core areas such as poverty eradication, climate change, economic growth, sustainable cities, and governance, resulting in a multidimensional and systematic framework for global development. As global demands to address environmental and social concerns grow, integrating ESG principles into economic growth strategies has emerged as a critical avenue to attaining the SDGs [1,2,3,4]. Existing research indicates that government policies play a crucial role in guiding businesses to fulfill their ESG responsibilities and encouraging sustainable transformation [5,6,7].

Against this backdrop, the concept of pragmatic sustainability has gained increasing scholarly and policy attention. This concept emphasizes that, under conditions of institutional complexity and resource constraints, policy practices should focus on operability, adaptability, and coordination to progressively achieve multiple environmental, social, and economic goals [8,9]. This concept offers a new value orientation for the design and evaluation of ESG policies, emphasizing the importance of stability, cooperation, and sustainability in execution, as well as foresight and idealism in theme selection [10,11,12]. Recent research further demonstrates that achieving sustainability transitions requires integrated approaches, alignment mechanisms, and adaptive capacities that break policy silos and enhance coordination across governance levels [4,11]. Based on this, this paper, guided by the SDGs framework and the concept of pragmatic sustainability, explores how to assess and evaluate ESG policies scientifically and systematically.

Currently, how to properly evaluate the effectiveness of ESG policies is a major concern for scholars and policymakers. At the level of policy instruments, existing studies have explored how governments guide enterprises to adjust behaviors and improve transparency and compliance through regulatory directives, information disclosure requirements, fiscal incentives, tax incentives, application demonstration, and green finance standards [13,14,15,16,17,18]. Regarding policy content, scholars analyzed key areas covered by ESG governance, such as climate change, energy transition, rights, anti-corruption regulations, and corporate governance structure reforms, revealing coordination mechanisms between different policy themes [19,20,21]. At the level of policy impact evaluation, Finger and Rosenboim established a conceptual model to assess the additional economic value of ESG policy implementation for financial institution stakeholders [22]. Zhang et al.’s empirical study based on the DID model found that the Chinese government’s ESG policies significantly improved the quality and quantity of green patent innovation by enterprises [23]. In addition, cross-departmental coordination among entities is considered to be conducive to enhancing policy stability and long-term effectiveness, which is especially crucial under a pluralistic governance structure [24].

The classification of policy instruments adopted in this study builds upon Rothwell and Zegveld’s seminal typology, which distinguishes between supply side demand side, and environmental instruments [25]. Furthermore, this study is grounded in broader theoretical debates on policy design, policy mixes, instrument choice. Policy design theory emphasizes the deliberate selection and configuration of policy tools to achieve intended goals within specific governance contexts [26]. The policy mix literature further argues that policy effectiveness depends not only on the performance of individual instruments but also on their complementarity and coherence within a broader portfolio [27]. Instrument choice is shaped by political priorities, administrative capacity, and institutional traditions, which in the Chinese context often favor regulatory approaches. Therefore, an ideal ESG policy should have essential components such as a diversified range of instruments, alignment with themes and market demand, and cross-departmental collaboration mechanisms.

Although previous research has laid a solid foundation for ESG policy analysis, there are still some shortcomings: First, most studies on policy impact evaluation focus on the impact of policies on outcome variables such as corporate performance, capital market reactions, or environmental indicators, with little systematic exploration of intrinsic characteristics such as policy tool combinations and thematic structures. While this outcome-oriented research technique reveals the effects of policies on implementation, it frequently overlooks policy design details and quality evaluation. Second, policy research methods are relatively limited, focusing mostly on case studies or qualitative content analysis, with no comprehensive quantitative study of policy documents.

To fill these research gaps, this paper constructs an analytical framework from three dimensions: policy instruments, policy themes, and policy subjects. Compared with traditional single-dimensional policy evaluation methods, this framework can present the overall structure of the policy system from multiple perspectives, avoiding one-sided analysis. It also supports dynamic evolution studies of policy themes and tool combinations, thereby offering actionable suggestions for policy optimization. This paper uses content analysis, LDA topic modeling, and social network analysis to systematically evaluate policy instrument usage features, theme evolution trends, and subject collaboration networks in 82 ESG policy documents issued by the Chinese central government between 2007 and 2024. The aim is to identify structural deficiencies in China’s ESG policies and, based on this, propose optimization paths to provide empirical support and theoretical references for achieving the SDGs and promoting pragmatic sustainability.

The primary contributions of this work are expressed in the following three aspects: (1) Theoretical contribution: A three-dimensional analytical framework called ‘policy tools-policy themes-policy actors’ was developed by merging policy tool theory, theme evolution analysis, and subject collaboration networks. This broadened the previous research viewpoint on ESG policy evaluation and integrated it into the larger context of the SDGs and practical sustainability ideas for systematic analysis. (2) Methodological innovation: This study organically combined content analysis, LDA topic, and social network analysis to achieve a multidimensional, quantitative, and dynamic assessment of policy texts, overcoming the limitations of traditional single-dimensional, qualitative-based analysis methods in policy research. (3) Practical Value: Based on a rigorous quantitative examination of China’s central-level ESG policies from 2007 to 2024, this report identifies important challenges such as structural imbalances in policy tools, a restricted theme focus, and insufficient stakeholder collaboration. It also makes specific recommendations to tool combinations, improve theme adaptability, and boost interdepartmental collaboration, as well as giving empirical backing and concrete policy references for accomplishing SDGs.

2. Methodology

2.1. Construction of a Three-Dimensional Analytical Framework

Most scholars examine policy texts from two perspectives: internal semantics and external structure. The external structure concentrates on policy actors, while internal semantics mainly emphasize policy instruments [28,29,30,31]. ESG policies encompass various sectors, including industry, finance, and environmental management, resulting in increasingly complex and diverse policy content. Therefore, this paper proposes a three-dimensional analytical framework consisting of instruments, themes, and subjects, as shown in Figure 1.

2.1.1. X Dimension: Policy Instrument Dimension

In ESG policy frameworks, various foundational policy instruments serve distinct functions. Based on these functional differences and integrating Rothwell and Zegveld’s theoretical insights, the core policy instruments within the ESG policy system can be categorized into environmental, and demand-side types [32], as detailed in

Table 1. Types of policy instruments.

Instrument Type	Instrument Name	The Significance of Instrument
Supply Side	Technical Support	Provide technical support for ESG development by supporting R&D, encouraging technological innovation, and establishing laboratories
	Project Financing	Provide financial support for ESG advancement through special fund allocation, research grants, and subsidy programs
	Information Services	Encourage industries to provide information services, such as building information platforms
	Talent Cultivation	Strengthen education systems and training programs at all levels to cultivate talent for improved ESG accountability
Environmental	Regulatory Framework	Formulates and implement regulations (e.g., ESG rating management) to create a robust social environment for ESG development
	Tax Incentives	Provides tax reductions or exemptions for ESG-related sectors, organizations, and individuals
	Strategic Planning	Develop master plans for ESG development, such as establishing green finance systems
Demand-Side	Awareness Campaigns	Conduct ESG education programs for enterprises and organizations to enhance public understanding of ESG principles
	International Cooperation	Promote participation in international ESG cooperation frameworks, exchange best practices, and align domestic standards with global norms
	Government Subsidies	Provide targeted financial subsidies to encourage enterprises to adopt ESG practices, such as green procurement, sustainable supply chains, and low-carbon technologies
	Application Demonstration	Formulate ESG demonstration policies (e.g., pilot projects, model initiatives) for broader adoption

.

(1)

Supply side policy instrument

Supply side policy instruments primarily manifest as policy-driven initiatives, focusing on providing relevant resources, mechanisms, and incentives. The government provides a fundamental guarantee for the development of ESG concepts through policy instruments such as technical support, project financing, information services and talent cultivation [33].

(2)

Environmental policy instrument

Environmental policy tools aim to support ESG by implementing regulations, offering tax incentives, and strategic planning to facilitate ESG efforts.

(3)

Demand side policy instrument

Demand side policy tools are the main internal driving force for promoting ESG concepts. They use means such as awareness campaigns, international cooperation, government subsidies and application demonstration to encourage market participants, investors, consumers, and enterprises to prioritize sustainable practices and information disclosure.

2.1.2. Y Dimension: Policy Theme Dimension

Policy themes represent the fundamental elements of policy formulation and implementation, indicating the orientation and objectives of the policy [34]. China’s ESG policies span various sectors, including technology, finance, and industry, illustrating the country’s extensive implementation of ESG development. The existing policy framework demonstrates shortcomings in thematic coordination and precision, as it lacks comprehensive implementation guidelines and standardized evaluation criteria. Furthermore, there is a misalignment between policy development, market demands, and technological advancements, which undermines policy effectiveness and execution efficiency. This paper analyzes the characteristics, intensity, and evolutionary processes of policy themes, offering new perspectives for the formulation and continuous refinement of ESG policies.

2.1.3. Dimension Z: Policy Subject Dimension

The policy subject refers to the various entities involved in policy formulation, promotion, and implementation, including government functional departments, enterprises, and individuals. The practical realization of policies relies on the quality of policy development and execution, which depends on the level of coordination among policy subjects [35,36]. The concept of ESG encompasses environmental, social, and governance factors, covering a broad range of fields such as environmental protection, technological innovation, and market regulation. Consequently, entities like the National Development and Reform Commission, the Ministry of Ecology and Environment, and the Ministry of Industry and Information Technology form a complex social network that collaborates to strengthen ESG governance and promote sustainable economic and social development.

2.2. Research Method

2.2.1. Content Analysis Method

The Grounded Theory Research approach uses inductive logic to systematically gather and analyze data on specific phenomena, resulting in theories built through continuous inductive processes [37]. This research employs grounded theory and utilizes NVivo 14 to code ESG policy texts, categorizing each analytical unit into relevant policy instrument types. The study analyzes the frequency, distribution patterns, and characteristics of various policy tools based on the statistical results.

2.2.2. LDA Method

Latent Dirichlet Allocation (LDA) is a three-layer Bayesian generative probabilistic model designed to extract and analyze thematic content within textual data. This model effectively uncovers latent topics embedded in large-scale datasets without considering the sequential order of documents and words, thereby providing robust support for the semantic analysis of texts [38]. The ESG policy corpus comprises 82 central government policy documents spanning 2007–2024, containing diverse topics and a high degree of semantic variability. LDA can effectively capture latent thematic structures without the need for predefined categories, thus avoiding potential researcher bias inherent in manual coding. Model produces interpretable probability distributions over both words and topics, which facilitates the dynamic analysis of topic evolution over time and supports cross-dimensional integration with policy instrument and policy actor networks.

Perplexity is a crucial metric for evaluating a model’s predictive accuracy and generalization ability. A lower value indicates a stronger generalization ability of the model [39]. The calculation formula is as shown in Equation (1). Based on the identification of themes in each period, this study calculates the semantic similarity of keywords every two years. Based on the similarity matrix of research themes in each stage, the pyecharts library is used to draw a Sankey diagram of theme evolution, and the patterns and directions of theme changes are analyzed in depth.

$$\mathrm{Perplexity}\left(\mathrm{D}\right)=\exp \left\{{\displaystyle \frac{{\displaystyle {\sum }_{d=1}^D{\log }_{2}p(w_d)}}{{\displaystyle {\sum }_{d=1}^D{N}_d}}}\right\}$$

(1)

In this formula, $D$ represents the total number of documents in the corpus, $d$ represents the $d$ th document, $N_d$ represents the total number of words in document $d$, and $w$ represents the document.

2.2.3. Social Network Analysis

Social network analysis is an applied sociological research methodology that quantitatively examines various characteristics of social networks [40]. Network relationships among ESG policy subjects exist, characterized by policy entities as nodes and collaborative communications as links. This network seeks to enable the collaborative development and execution of policies, establishing a network for ESG subject collaboration. This study employs social network analysis methods to elucidate the current development status and structural characteristics of the network. The analysis of ESG policy subjects is conducted using UCINET 6, focusing on both macro-network and individual node perspectives.

3. Results

3.1. Acquisition of Policy Documents

Firstly, this study focuses on the core keywords ‘Environment’ (E), ‘Society’ (S), ‘Corporate Governance’ (G), and ‘Green.’ An in-depth search was conducted on the Peking University Law Database platform to gather four categories of key policy documents: local regulations, local government rules, local normative documents, and local work documents. Key information was also collected, including the policy release date, the issuing province, and the issuing authority. The policy collection period extends through September 2024.

In order to ensure focus and accuracy in subsequent analysis, the study then manually screened the retrieved results, following these guidelines: (1) making sure that the policy content closely reflects the evolution of ESG concepts across different stages and is closely aligned with ESG themes; (2) eliminating duplicate policies and policies involving non-governmental entities like corporations and financial institutions; and (3) extracting pertinent content related to government data governance from selected policies, such as key excerpts from top-level planning documents like the “Notice on Deepening Climate-Resilient Urban Construction Pilot Projects” and the “Code of Corporate Governance.” In the end, 82 policy documents that were extremely relevant to the research topic were chosen.

3.2. Analysis of Policy Instruments Dimension

The 82 policy documents were imported into NVivo 12 qualitative analysis software, and each document was coded based on established principles. The process resulted in the identification of 1043 policy analysis units, subsequently categorized within the relevant policy instrument framework. The final classification of these policy instruments is presented in

Table 2. Distribution of Policy Instrument Types.

Instrument Type	Instrument Name	Reference Point	Sub-Item Proportion (%)	Proportion (%)
Supply Side	Technical Support	43	23.76	17.35
	Capital Investment	38	20.99
	Information Services	74	40.88
	Talent Development	26	14.36
Environmental	Regulatory Framework	265	43.44	58.49
	Tax Incentives	318	52.13
	Strategic Planning	27	4.44
Demand-Side	Awareness Campaigns	127	50.40	24.16
	Market Incentives	81	32.14
	Application Demonstration	44	17.46
Total	-	1043	-	-

.

According to the data, the use of ESG policy instruments in China is unevenly distributed: environmental policy instruments account for 58.49% of the total, demand-side instruments account for 24.16%, and supply side policy instruments account for just 17.35%. This pattern exemplifies a prevalent issue in China’s ESG policy framework, which prioritizes environmental requirements over supply and demand processes. While regulatory frameworks and strategic planning can help to set necessary compliance baselines, relying too heavily on environmental instruments risks producing a top-down, compliance-driven policy environment with no market dynamism or innovation incentives.

According to policy mix theory, optimal policy performance is determined by the complementarities of coercive, incentive-based, and enabling tools [27]. An overemphasis on regulatory requirements, without accompanying supply side measures such as technical capacity building and talent development, may limit firms’ ability to fulfill greater environmental standards. Similarly, insufficient demand-side incentives, such as pilot demonstrations and awareness campaigns, might diminish enterprises’ motivation to incorporate ESG concepts that go beyond compliance. Moreover, in the Chinese context, the path dependence of administrative governance tends to favor command-and-control instruments [41]. This technique may result in quick short-term improvements in environmental compliance, but it can also lead to implementation issue if enterprises face ongoing compliance expenses without enough technological or market support.

Political, administrative, and institutional issues all contribute to this imbalance. Politically, central authorities frequently prefer policy measures that produce visible, short-term compliance results, which are consistent with top-down governance accountability frameworks. Administratively, long-standing regulatory routines cause institutional inertia, making it easier to use known coercive methods than to coordinate sophisticated cross-sectoral incentive programs. Institutional capacity restrictions, such as restricted inter-agency coordination procedures, budgetary pressures, and insufficient market infrastructure, make it difficult to adopt more sophisticated supply and demandside policies. These aspects create a trade-off: regulatory dominance secures baseline compliance but may limit innovation and voluntary ESG adoption, whereas a balanced approach could better connect enforcement with capabilities development for long-term transformation. A more balanced policy tool portfolio, which includes environmental regulations as well as strong supply and demandside instruments, would be more consistent with pragmatic sustainability principles, ensuring that regulatory requirements are matched with the resources, capabilities, and incentives required for effective and long-term ESG transformation.

Furthermore, the use of individual sub-instruments varies dramatically between ESG policy instrument categories.

Among supply side policy instruments, the utilization of technical support, capital investment, and information service policies is relatively concentrated, accounting for 23.76%, 20.99%, and 40.88%, respectively, reflecting the Chinese government’s emphasis on green technological innovation. The “Guiding Opinions on Further Enhancing Financial Support for the Green, Low-Carbon, and High-Quality Development of the Yangtze River Economic Belt” explicitly advocate for the establishment of a comprehensive green financial information data sharing mechanism, as well as the active exploration of advanced technologies such as big data, cloud computing, and edge computing to achieve precise carbon data collection, effective integration, and thorough analysis. In contrast, the application frequency of talent development policy tools is comparatively lower at 14.36%. Future ESG policy planning should prioritize the use of such instruments to achieve long-term economic and social growth.

Based on the frequency of utilization of environmental policy instruments, regulatory framework (43.44%) and strategic planning (52.13%) are the primary components, reflecting the Chinese government’s strong focus on refining legal frameworks, strategic planning, and market order regulation. These actions together create a favorable external environment for the development of ESG principles. In contrast, fiscal incentives such as tax incentives (4.44%) are less commonly used but are crucial in promoting resource recycling and advancing low-carbon industries. It is important to note that, due to the absence of explicit disclosure policies, companies often overstate their ESG investments in practice, leading to significant “greenwashing” phenomena that undermine the credibility of information disclosure and hinder the healthy development of ESG concepts. As a result, policymakers must carefully weigh the benefits and drawbacks of various policy tools and optimize their structural deployment to ensure balanced and effective governance.

Market incentives are the most commonly used demand-side policy instruments, accounting for 50.40% of all measures. This is followed by awareness campaigns, which constitute 32.14%. However, the application of demonstration-based demand-side instruments in the ESG sector remains critically insufficient, accounting for only 17.46%. Future policy formation should include a broader range of demand-side instruments to increase intrinsic incentive for ESG growth, such as the establishment of demonstration parks and strengthened international cooperation, thereby refining the ESG framework.

3.3. Analysis of Policy Theme Dimensions

3.3.1. Analysis of Thematic Characteristics

This paper provides a theme analysis of ESG policies, using Latent Dirichlet Allocation (LDA) to build topic models. The optimal number of topics is determined using perplexity curves and the elbow approach. TTo improve the accuracy of the ideal topic count, the top 150 words from each subject are collected into text segments and vectorized with the Doc2Vec algorithm. The data is then reduced to two dimensions using Principal Component Analysis (PCA). Clustering analyses of both the topic words and the text segments (see Figure 2 and Figure 3) reveal minimal overlap at four topics, indicating that a four-topic model is most appropriate.

According to the thematic analysis of the above diagram, China’s ESG policies can be classified into four separate categories. The key terms and thematic descriptions for each category are summarized in

Table 3. Keywords and thematic description.

Number	Keywords	Topic Description
1	Green, enterprise, energy, construction, energy conservation, low carbon, environment	environmental governance
2	Company, disclosure, environment, information, responsibility, report, evaluation, listing	corporate responsibility and information disclosure
3	Technology, equipment, production, development, instrumentation, systems, processes, materials	technological innovation and industrial upgrading
4	Green, development, finance, investment, projects, enterprises, mechanisms	financial sector and development

.

Topic 1 focuses on environmental governance, including fundamental ideas like green and low-carbon development. Its policy content is primarily focused on environmental protection and green, low-carbon economic transformation, which exemplify the concepts of sustainable development. Topic 2 focuses on corporate responsibility and information disclosure, including regulations governing corporate accountability and transparency standards. These demonstrate China’s continued attempts to improve corporate information openness and allow for prompt adjustments to management practices in response to the developing ESG situation. Topic 3 revolves around technological innovation and industrial upgrading, highlighting technological advancements and innovative business models to promote ESG initiatives and optimize industrial structures. To support coordinated digital and green transformation, policies have been implemented to guide regional and sectoral efforts to deepen dual transformation projects. Topic 4 focuses on the financial sector and development policies, primarily addressing issues within China’s financial industry, strengthening financial institutions’ responsibility for sustainable development, and promoting the integration and widespread application of ESG principles in financial activities.

3.3.2. Analysis of Thematic Intensity

Theme intensity primarily shows the importance of a topic within a given time frame. Within the same time frame, a higher theme intensity value signifies greater popularity and attention towards the topic [42]. The calculation formula for theme intensity is as follows:

$$T{I}_t^k={\displaystyle \frac{{\displaystyle \sum _{d=1}^M{P}_d^k}}{M}}$$

(2)

In the formula, $T{I}_t^k$ (Topic Intensity) represents the strength of topic k at time t, M is the total number of documents, and $P_d^k$ (Probability) indicates the likelihood of topic k within document d.

The intensities of the four ESG themes were calculated using the topic intensity formula. The analysis was carried out from both macroeconomic and microeconomic perspectives: at the macro level, Figure 4 depicts the overall strength of each ESG theme from 2007 to the present; at the micro level, temporal indicators are integrated to show the changing trends in theme strength over time, providing a more detailed reflection of the ESG domain’s development trajectory and future directions, as shown in Figure 5.

The thematic evolution analysis reveals significant shifts in the intensity of ESG-related themes over time, which reflect changing policy pZriorities, external pressures, and administrative reforms. For instance, in the early years (2006–2010), there was a heavy emphasis on corporate social responsibility (CSR) and environmental disclosure. These themes align with the release of documents such as the “Guidelines for Corporate Social Responsibility Reporting” (2008), where the focus was on enhancing corporate responsibility reporting mechanisms in response to domestic and international pressures for greater corporate transparency and environmental accountability. These early regulatory moves set the stage for future developments in ESG governance in China.

Starting in 2015, however, the green finance and financial sector development themes gained prominence, coinciding with the Chinese government’s 13th Five-Year Plan and the rising importance of green and sustainable finance as a response to the increasing need for environmental protection and sustainable development. The 2015 issuance of documents such as the “Guidelines on the Role of the Financial Sector in Green Development” marked a critical shift in policy priorities toward fostering green investments and addressing environmental challenges through financial tools.

The increased focus on corporate governance and ESG integration into financial market regulations from 2017 onwards reflects both external pressures from international organizations and the implementation of administrative reforms. These reforms, driven by the need to enhance China’s financial market stability and transparency, are evident in the revisions to investment guidelines and ESG governance frameworks in 2020 and 2022. Documents like the “Guidelines on Corporate Governance and ESG Reporting” in 2020 emphasize improving governance practices to align with global ESG standards, responding to pressures for higher levels of corporate transparency and accountability in international markets.

Thus, the changing intensity of ESG themes reflects not only domestic policy shifts but also China’s broader developmental and environmental strategies. Over time, China’s ESG policies have adapted to external challenges such as international environmental commitments, the Belt and Road Initiative, and the growing importance of global ESG norms. This thematic evolution demonstrates China’s effort to balance rapid economic growth with sustainable development, as it navigates both domestic governance reforms and the increasing influence of international environmental standards.

3.3.3. Analysis of Thematic Evolution

To investigate the complex process of the overall thematic evolution of ESG policies over the temporal dimension, this study calculates the perplexity of topics at each stage of ESG policy development to determine the optimal number of topics per phase. To maintain high quality and stability in policy subjects, topics with little relation to ESG policies are removed, further refining the number of themes. This process results in the final thematic distribution, as shown in

Table 4. Distribution of thematic topics across different stages.

Period	Optimal Number of Topics	Theme Labels
2007–2012	4	Environmental Information Disclosure, Green Economy, Disclosure Regulations, Green Transformation
2013–2017	5	Green Development, Pollutant Control, Corporate Responsibility, Green Financial System, Tax Incentives
2018–2021	7	Green Investment, Corporate Environmental Information Disclosure, Green Products, Innovation Pilot Programs, Green and Low-Carbon Development, Information Platform Construction, Green Technology Innovation System
2022–2024	6	Digitalization and Greenization, Green Technology, Comprehensive Demonstration Zones, Green Bonds, Green Low-Carbon Transition, Disclosure Regulations

.

This study calculate the similarity between topics across adjacent periods. This study proposes that when the average thematic similarity between consecutive periods surpasses a certain level, there is a correlation between the themes, allowing for the filtering of relevant results. The evolution of topics is visualized using a Sankey diagram generated with the pyecharts library, as illustrated in Figure 6.

Figure 5 shows a clear evolutionary trajectory for China’s ESG policy issues. For example, between 2013 and 2017, the “Green Financial System” became a prominent topic. The “Green Economy” topic from 2007 to 2012 bifurcated into several subthemes during 2013–2017, including “Tax Incentives,” “Green Development,” and “Green Financial System.” From 2018 to 2021, themes such as “Corporate Environmental Information Disclosure,” “Green Technological Innovation System,” and “Information Platform Construction” fused to become the overall topic of “Green Digitalization and Collaborative Development” between 2022 and 2024. Furthermore, the “Green Innovation Technology System” topic from 2016 to 2020 is divided into a subtheme of “Green Technologies,” but its evolutionary advancement is limited, suggesting a risk of future obsolescence. Nonetheless, green technological innovation constitutes a vital driver of low-carbon development, facilitating the green transformation of economic and social systems. Therefore, future policy formulation should place greater emphasis on the topic of “Green Technological Innovation.”

From the perspective of thematic evolution and objectives, ESG policy themes primarily focus on areas such as “corporate environmental information disclosure,” “green, low-carbon, high-quality development,” “comprehensive green transformation,” and “digitalization and green synergy development.” These embody the principles of innovation-driven growth, digital transformation, and sustainable development, with the goal of establishing an innovative platform for ESG concepts and promoting their deep integration into finance, information communication, and other industries. The “Guidelines for the Implementation of Digital-Green Synergy Transformation” explicitly state that future efforts will leverage digital technologies like the Internet, big data, and cloud computing to empower green transformation, fostering comprehensive digital-green integration and innovation. This aligns with China’s evolving ESG policy themes. Consequently, future ESG policies should continue to emphasize developments in digitalization and connectivity to build a more intelligent and efficient ecosystem, allowing for the inventive progression of ESG principles as well as the economy’s and society’s sustainable development.

3.4. Analysis of Policy Subject Dimension

A network matrix derived from 82 ESG policy documents was visualized using UCINET software, as shown in Figure 7. In the ESG policy stakeholder collaboration network, each issuing department is represented as a node, with lines connecting departments that jointly issue policies. The visualization highlights that some nodes, such as the Ministry of Finance and the Securities Trading Department, lack connections. Additionally, there are notable differences in the number of links among nodes; central nodes like the Ministry of Industry and Information Technology and the National Development and Reform Commission have significantly more connections than peripheral nodes. These features suggest that the ESG policy stakeholder collaboration network demonstrates systemic cohesion and individual prominence, which will be further discussed below.

3.4.1. Holistic Analysis

This study uses the “Whole-network” function of UCINET software to assess the overall indicators of the ESG policy subject collaboration network, and the results are shown in

Table 5. Composite indicator value.

Indicator	Indicator Value	Indicator	Indicator Value
Size	20	Connectedness	0.879
Relation	145	Road	1.286
Density	0.342	Efficiency	0.495

. The findings indicate that the network size is 20, reflecting the participation of 20 functional departments within the ESG policy subject collaborative framework.

The ESG policy subject collaboration network comprises 20 relations between nodes, with a potential maximum of 380 connections between these 20 nodes. As a result, the total density of the ESG policy subject collaboration network is calculated using the ratio of these two values, which is 0.342. This indicates that 34.2% of the potential connection pathways between entities are active, while 67.6% remain unestablished. The collaboration network has a network efficiency of 0.495, with roughly 51% of the links indicating redundancy. This suggests that when half of the connections in the ESG policy subject collaborative network are replaced with alternative links, the network remains stable, even after the removal of the original connections, thus enhancing the robustness of the collaborative structure.

Based on network connectivity analysis, the ESG policy subject collaboration network has a network connectedness of 0.879, indicating that most departments within the collaborative network can build direct or indirect links via intermediary departments. The average shortest path length (Road) is 1.286, suggesting that any two departments can be connected through fewer than two intermediary departments. These metrics demonstrate that the ESG policy subject collaborative network exhibits relatively high connectivity.

Overall, the network has good overall connectivity and a high potential for inter-departmental collaboration; however, the actual level of collaboration is low because many departments have yet to establish direct links.

3.4.2. Individual Analysis

Based on the “Centrality” function of UCINET software, this study measures the individual-level indicators of the ESG policy stakeholder collaboration network, with the results presented in

Table 6. Individuality indicator value.

Department	Degree Centrality	Closeness Centrality	Betweenness Centrality	Department	Degree Centrality	Closeness Centrality	Betweenness Centrality
National Development and Reform Commission	27	63	9.193	Ministry of Commerce	14	76	0.733
The Ministry of Industry and Information Technology	26	64	7.876	Ministry of Housing and Urban-Rural Development	14	74	0
State Administration for Market Regulation	26	64	7.876	State Council	13	77	0.543
China Securities Regulatory Commission	26	64	8.599	China Banking and Insurance Regulatory Commission	12	76	0.143
People’s Bank of China	25	65	5.093	Hong Kong Exchanges and Clearing Limited	2	114	0
Ministry of Finance	24	66	3.967	National Standardization Administration of China	2	114	0
Ministry of Ecology and Environment	24	66	5.590	Ministry of Ecology and Environment	2	114	0
National Energy Administration	16	72	0.286	Shanghai Stock Exchange	2	114	0
State-owned Assets Supervision and Administration Commission	16	72	1.4333	Shenzhen Stock Exchange	2	114	0
China Banking and Insurance Regulatory Commission	15	73	0.667	Asset Management Association of China	2	114	0

.

Degree Centrality primarily measures the number of directly connected nodes to a given node. As shown in Table 6, the top six departments in degree centrality are the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Market Supervision Administration, the China Securities Regulatory Commission, the People’s Bank of China, and the Ministry of Finance. These departments have a minimum degree centrality of 24, indicating that each has collaborated on joint publications with at least 24 other departments, thus occupying a central position within the collaborative network. Conversely, the departments with the lowest degree centrality are the statistical and trading agencies, each establishing direct links with only two other departments, reflecting their peripheral status within the network.

Closeness centrality measures how easily and quickly a node can reach all other nodes in the network, with higher values indicating shorter average path lengths. In the ESG policy cooperation network, certain nodes with relatively low degree centrality maintain moderate closeness centrality because they are linked to highly central intermediates, allowing them to reach the majority of subjects in a few steps.

Betweenness centrality primarily measures a node’s control within a collaborative network, indicating whether other nodes must pass through it to establish connections. As shown in Table 6, the average betweenness centrality is 2.59, with key departments including the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Market Supervision Administration, the China Securities Regulatory Commission, the People’s Bank of China, and the Ministry of Finance. These departments account for 61.38% of the total betweenness centrality, highlighting their significant intermediary role in information transmission, strong control capacity, and positive influence on collaboration among other network entities.

Overall, the ESG policy stakeholder collaboration network exhibits a distinct core-periphery structure, with the National Development and Reform Commission, the Ministry of Industry and Information Technology, and other departments demonstrating a high degree of centrality and betweenness centrality.

4. Conclusions and Policy Recommendations

4.1. Conclusions

4.1.1. The Dimension of Policy Instruments

Environmental policy instruments constitute the most significant proportion, followed by demand-side measures, with supply side tools being the least prevalent, reflecting a policy emphasis on environmental protection over supply and demand dynamics. The internal sub-tool structure is similarly imbalanced: within supply side policies, technical support, capital investment, and information services dominate, while talent development policies are comparatively weak. Environmental policies primarily focus on the regulatory framework and Strategic Planning, with limited attention to tax incentives. Demand-side policies emphasize market incentives and public education, whereas application demonstrations remain insufficiently developed.

4.1.2. The Dimension of Policy Topic

China’s ESG policies showcase a diverse thematic structure, clearly divided into environmental governance, corporate responsibility and information disclosure, technological innovation and industrial upgrading, and the financial sector and development. These topics thoroughly cover critical areas such as environmental protection, corporate accountability, technological progress, and financial sustainability, highlighting the country’s strong dedication to sustainable development. Analyzing the thematic intensity of these topics over the past twenty years shows that corporate responsibility and information disclosure have been the most prominent, indicating significant advancements in regulation and ESG promotion. At the same time, the growing focus on technological innovation and industrial upgrading emphasizes the government’s commitment to technological reform as a driver of green growth. Overall, China’s ESG policy landscape reflects a well-organized and comprehensive developmental path within its thematic framework.

4.1.3. The Dimension of Policy Subject

The ESG policy subject collaboration network generally demonstrates good connectivity; however, the level of coordination remains moderate to low, suggesting a need for stronger interdepartmental links. The network exhibits a distinct core-periphery hierarchical structure, with agencies like the National Development and Reform Commission and the Ministry of Industry and Information Technology occupying central positions. These central agencies exhibit strong control capabilities and high centrality, playing a key role in facilitating collaboration among other entities. In contrast, some departments are situated at the periphery, lacking effective collaborative engagement with other stakeholders.

4.1.4. A Comprehensive Evaluation of China’s ESG Policies

After summarizing the existing ESG policy characteristics, a more comprehensive evaluation of these policies’ attributes is necessary to provide a deeper insight into their effectiveness and impact. The evaluation should go beyond merely categorizing policy instruments and delve into a more critical assessment of their attributes.

In terms of tool effectiveness, while environmental regulatory frameworks dominate the policy mix, their effectiveness in driving actual change varies. Regulatory tools, such as mandatory reporting and compliance requirements, have led to improvements in corporate transparency, yet their enforcement remains challenging due to gaps in regulatory capacity and institutional coordination. Supply Side tools, such as technical support and capital investment, are critical for fostering innovation, but their application has been limited due to budget constraints and administrative challenges. Demand-side measures, such as market incentives, are underutilized, despite their potential to drive consumer demand for green products and services.

In terms of implementation challenges, even though China has made significant strides in ESG policy development, implementation remains a key challenge. Inadequate data transparency, inconsistent enforcement across regions, and a lack of cross-departmental coordination hinder the effective execution of policies. A more comprehensive evaluation should identify these implementation gaps and propose solutions to improve regulatory compliance and administrative capacity.

In conclusion, while China’s ESG policies have made significant progress, there is a need for a more balanced and coordinated policy tool portfolio to align with the ideal ESG policy attributes. This comprehensive evaluation should address not only the effectiveness of individual tools but also the challenges in their implementation and the potential for improvement through policy integration and international best practices.

4.2. Recommendations

4.2.1. Optimizing the Structure of Policy Instruments, Coordinating Supply and Demand Matching to Facilitate Transformation

The Ministry of Ecology and Environment’s “Reform Method for Environmental Information Disclosure System” stipulates that by 2025, a mandatory environmental disclosure regime should be fundamentally established, integrating compulsory environmental information requirements into the listing application procedures of publicly traded companies. To achieve this goal, the policy instrument framework must be optimized, supply side policies strengthened, and their use coordinated with demand-side policy instruments to increase supply capacity and market demand. In terms of supply side instruments, more emphasis should be placed on technical innovation, financial investment, and talent development in order to achieve a comprehensive green transformation of economic and social growth. Concurrently, efforts should be made to improve the ESG information disclosure content and indicator system, as well as to create an ESG digital service platform to aid in the integrated growth of green finance, technical finance, and digital finance. On the demand side, continued implementation of market incentives and public education initiatives is essential to encourage enterprises to publish sustainability and ESG reports. Furthermore, to establish exemplary cases for broader learning, it is crucial to strengthen ESG application demonstrations, focusing on creating model enterprises and industrial parks.

4.2.2. Emphasizing the Growth of Policy Issues, Dynamically Adapting Policy Content and Priorities

To ensure the foresight and effectiveness of ESG policies, it is critical to monitor changing trends in policy themes and rapidly alter policy content and priorities to match the rising demands and challenges of ESG development. In terms of policy content, it is essential to improve evaluation and supervision mechanisms to enable continuous tracking of policy implementation outcomes, promptly identify and address operational issues and obstacles, and ensure the achievement of policy objectives. Concurrently, constant improvements and optimizations should be made to policy instruments, stakeholders, and thematic focus areas to ensure effective coordination across time periods, thereby constructing a coherent and systematic pathway for policy evolution. Policy priorities should be closely aligned with national strategic directives and industrial development needs, with a focus on accelerating innovation in ESG digitalization, intelligence, networking, and sharing to foster the development of a uniquely Chinese ESG framework that is also compatible with international standards.

4.2.3. Enhancing the Collaborative Growth of Policy Subjects to Encourage Multi-Entity Cooperative Innovation

The formulation of ESG policies involves multiple subjects, sectors, and industries, necessitating enhanced top-level design and comprehensive planning to achieve policy synergy and coordinated effects. Specifically, the government should launch institutional and mechanical development measures to encourage topic engagement in ESG policies, as well as reinforce local legislative frameworks. Furthermore, the critical role of core departments in driving ESG policy coordination should be highlighted, as should the ability of peripheral agencies to promote broader engagement in ESG subject collaboration. Additionally, to establish an innovative ecosystem characterized by multi-subject cooperation, it is essential to delineate the functional roles of enterprises, research institutions, and universities, as well as to develop mechanisms for resource sharing and open collaboration, ensuring the seamless flow of innovation elements.

4.2.4. Strengthening International Cooperation and Incorporating Best Practices from Other Countries’ ESG Systems

To improve China’s ESG regulatory framework and consistency with global norms, it is critical to strengthen international cooperation and adopt best practices from other ESG regimes. The EU’s changing regulatory framework teaches numerous important lessons. For example, the EU Deforestation Regulation (EUDR) establishes stringent due diligence requirements to combat deforestation in global supply chains, serving as a paradigm for increasing traceability and transparency in raw material sourcing. Similarly, the EU Green Deal and sustainable finance initiatives, particularly the incorporation of green bonds, carbon pricing mechanisms, and the upcoming EU Battery Regulation with mandatory carbon footprint disclosures, can help China establish strong ESG disclosure and environmental accountability mechanisms. Japan’s corporate governance system, which requires board-level scrutiny of ESG issues, exemplifies how to institutionalize corporate responsibility and improve shareholder involvement. By incorporating these international best practices, China can create a more adaptable, comprehensive, and competitive ESG system that balances domestic priorities with global expectations, thereby advancing both national sustainable development goals and the SDGs.

In conclusion, this paper presents a thorough examination of China’s ESG policies across three dimensions—tools, topics, and subjects—providing significant insights for optimizing China’s ESG strategy and supporting sustainable development in the economic, social, and environmental dimensions. The findings emphasize the necessity of balancing policy tool combinations and encouraging stakeholder collaboration to promote a dynamic, sustainable ESG ecosystem in line with SDGs 12 (Responsible Consumption and Production) and 13 (Climate Action).

However, this study does have certain drawbacks. First, the research is mostly based on an analysis of 82 ESG policy texts, which may not fully capture the dynamic changes in China’s ESG governance as they occur in real time. Second, the study focuses on national policies rather than regional disparities or industry-specific obstacles, which may have an impact on policy implementation. Further research on these factors could improve the applicability and effectiveness of the offered policy proposals.