Our latest Market Snapshot analyses emissions trends across the SSE 50 – China's largest companies by market capitalisation. The data captures both clear signals of decarbonisation and the complexity of transition in a rapidly growing, energy-hungry economy.

Key Findings:

• Scope 1&2 emissions levelled off in 2024 after a rise in 2023
• Top 5 emitters represent ~83% of index emissions (~15% of market cap)
• Index faces 83% potential carbon liability under IPCC Net Zero scenario by 2050

SSE 50 companies held operational emissions flat in 2024, marking a shift from the increases seen the previous year. While some, like China Mobile, made notable progress, cutting Scope 2 emissions by transitioning to cleaner energy, others moved in the opposite direction. Major emitters in the Energy and Industrial sectors, including Shaanxi Coal and China Petroleum & Chemical, significantly increased their emissions. The result is a mixed picture: early signs of decarbonisation from a few, set against the continued dominance of fossil-based activity across much of the index.

This dual-speed transition is emblematic of China’s broader policy landscape: rapid investment in renewable energy on one hand, and record coal production on the other. While the recent expansion of the national ETS to cover cement, steel, and aluminium is a positive step, its design limits short-term impact. For investors, this raises important questions about risk concentration, regulatory timing, and the balance between transition ambition and energy security.

Our analysis also examines how carbon liabilities are concentrated in a handful of names, and what that means under various climate scenarios. With ~83% of emissions coming from just five companies, transition risk is not evenly spread. This has real implications for investors navigating China’s evolving climate policy environment.