China’s Ministry of Finance, in coordination with the central bank and key regulators, has officially released the Corporate Sustainable Disclosure Standard No. 1 – Climate (Trial).
The framework is designed to help companies identify and report climate-related risks and opportunities. By standardizing environmental data, the initiative aims to steer capital toward low-carbon projects and support China’s ambitious dual carbon goals of peaking emissions by 2030 and reaching carbon neutrality by 2060.
Double materiality:
The new standard structurally converges with the International Sustainability Standards Board (ISSB) IFRS S2 framework. It adopts the globally recognized four-pillar structure: governance, strategy, risk management, and metrics and targets.
However, China has introduced specific adaptations, most notably a double materiality approach. This requires companies to report not only how climate change affects their finances but also the impact of their own business activities and value chains on the environment.
A phased path to mandatory disclosure:
Currently, the standard is being implemented as a trial document with voluntary participation. However, the Ministry of Finance has outlined a clear roadmap for expansion. The rollout will progress from listed companies to non-listed entities and from large corporations to small and medium-sized enterprises (SMEs).
Over time, qualitative requirements will transition into quantitative metrics, eventually moving from a voluntary basis to a mandatory national disclosure regime.
Industry guidance:
To ensure practical application, the government has already begun developing specific guidelines for high-impact sectors. These include power, steel, coal, petroleum, and automobiles. The full-chain system—comprising basic, specific, and industry-level guidelines—is intended to provide a robust institutional infrastructure. By providing comparable and reliable data, the system allows investors to scientifically assess corporate progress in China’s green economic transformation.
As per the ministry, “The guidelines will establish a transparent, comparable, and reliable climate information disclosure system; strengthen the supply of standards to support green and low-carbon development; help guide market expectations; regulate corporate behavior; scientifically assess the progress of transformation; and provide key policy tools and institutional infrastructure for transforming the dual carbon target from a national macro strategy to corporate micro actions.”
