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Polluted Beijing is an apt place to consider how international asset managers can incorporate concerns about the environment into their investment choices.

But China’s domestic share owners simply expect returns. Meanwhile, reliable information on environmental, social and governance, or E.S.G., factors is scarce, investors and companies talk past each other and there are plenty of other issues to worry about.

There’s hope, nonetheless, according to panelists at the Asian Corporate Governance Association’s E.S.G.-focused annual conference in Beijing this week: Some local companies and investment firms see the point. Still, the A.C.G.A. observes that the number of Chinese companies reporting on corporate social responsibility, or C.S.R., which rose rapidly to around 1,600 in 2014, has subsequently plateaued.

E.S.G., which is a more mature, mainstream version of C.S.R., is relatively new. Getting all the right data is a challenge worldwide. Companies may view reporting as a compliance exercise rather than a meaningful part of their strategic and risk-management thinking. They may focus only on good news. Or they may simply misunderstand what information investors want, a point underscored in several presentations in the Chinese capital.

Using the data is tricky, too. By way of illustration, E.S.G. scores from MSCI and FTSE for the same global companies show little in the way of correlation when plotted against each other, Charles Yonts of the investment group CLSA noted at the A.C.G.A. event. Investors have to figure out if such ratings are useful.

They also have to grapple with potentially bigger issues. For overseas-listed Chinese companies, there are basic uncertainties surrounding the legality of the so-called variable interest entities that give shareholders their indirect ownership. In many corporations, wherever listed and whether government or privately controlled, it’s hard to know who makes decisions when dominant shareholders, management boards, supervisory boards and Communist Party officials are all involved.

Beijing’s moves toward more shareholder-friendly state-owned enterprises has helped make them preferred investments over private-sector firms for international investors by a three-to-one margin, according to an A.C.G.A. survey. This surprising state of affairs probably says more about the weakness of governance at typical private companies than its strength at state-owned enterprises.

That’s because corporate governance remains a work in progress in China. E.S.G. may well take hold eventually, just as stock markets, Starbucks and smog have done. But it will take time — and for now, it’s mainly a project for foreign investors.

Richard Beales is deputy editor of Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com

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