China Introduces National Climate Disclosure Standard as ESG Reporting Takes Shape

Key Takeaways

• New Climate Disclosure Framework: China has launched a national trial standard to improve consistency and credibility in corporate climate reporting.
• Global Alignment, Local Adaptation: The framework mirrors IFRS and ISSB climate pillars while adding China-specific impact reporting requirements.
• From Voluntary To Mandatory: Authorities plan to gradually expand the standard into mandatory, quantitative disclosures over time.
• Industry-Focused Rollout: Sector-specific guidance will target emissions-intensive industries first, before expanding economy-wide.

Deep Dive

China has taken another step toward formalizing how companies report on climate risk and impact, unveiling a new national standard designed to bring greater structure and consistency to corporate sustainability disclosures.

The framework, known as Corporate Sustainable Disclosure Standard No. 1 – Climate (Trial), was released by the Ministry of Finance of the People's Republic of China alongside several other ministries, financial regulators, and the country’s central bank. The aim is to strengthen how companies across the Chinese economy disclose climate-related risks, opportunities, and impacts, while gradually aligning domestic reporting with global sustainability norms.

A Voluntary Start With Mandatory Intentions

For now, the standard is positioned as a voluntary, trial framework. But Chinese authorities have been clear that this is not where the story ends. The Ministry of Finance has indicated that the scope of the framework will expand over time, eventually evolving into mandatory climate disclosure requirements for a much broader group of companies.

This phased approach reflects a familiar pattern in China’s regulatory playbook: start with guidance, build reporting capability, and then move toward enforceable obligations. Over time, disclosures are expected to shift from largely qualitative descriptions to more detailed and quantitative reporting.

Built On Global Pillars, Adapted For China

Structurally, the new standard closely follows the climate disclosure pillars developed by the International Sustainability Standards Board under IFRS S2. These include governance, strategy, risk and opportunity management, and metrics and targets, which are areas that have become the backbone of climate reporting globally.

At the same time, the framework introduces China-specific requirements. Notably, companies are expected to report on the climate impact of their business activities, including value-chain impacts and foreseeable effects on climate change itself. This moves the focus beyond exposure to climate risk and toward how corporate activity contributes to climate outcomes.

The alignment with the IFRS Foundation’s reporting architecture signals Beijing’s intention to ensure Chinese corporate disclosures remain legible to international investors, while still reflecting domestic policy priorities.

Sector Guidance Targets High-Impact Industries

To make the framework workable across a diverse economy, Chinese authorities are developing industry-specific guidance for sectors with significant climate footprints. Early focus areas include power generation, steel, coal, petroleum, fertilizer, aluminum, hydrogen, cement, and automobiles.

The rollout will prioritize large listed companies, before extending to non-listed firms and small and medium-sized enterprises. Regulators have indicated that requirements will deepen over time, as data quality improves and companies build internal climate reporting capabilities.

Beyond disclosure mechanics, the launch of the climate standard fits squarely within China’s broader economic and environmental strategy. Standardized climate reporting is intended to reduce greenwashing, support green and low-carbon transformation, and embed climate considerations more firmly into corporate decision-making.

In that sense, the framework is less about a single reporting rule and more about setting expectations. Climate transparency is being positioned as a core element of corporate governance, one that supports China’s long-term “dual carbon” objectives and signals that climate-related accountability is becoming a permanent feature of the corporate landscape.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.