ESG in China — First Corporate Sustainability Disclosure Standards on Climate Released
On 19 December 2025, the PRC Ministry of Finance and 8 other authorities jointly issued the long-awaited Corporate Sustainability Disclosure Standards No. 1 – Climate (Trial) (“Climate Standards”). The Climate Standards are the first specific standards after the release of the Sustainability Disclosure Standards for Enterprises Basic Standards (Trial) (“Basic Standards”) on 20 November 2024 and the Application Guidelines for Sustainability Disclosure Standards for Enterprises — Basic Standards (Trial) (“Application Guidelines”) on 3 September 2025. For our previous newsletter on the Basic Standards, please see ESG in China — A Step-by-step Approach in Establishing Unified ESG Disclosure Standards.
Same as the Basic Standards and Application Guidelines, the Climate Standards are currently not (yet) binding, and enterprises may follow and implement them on a voluntary basis. However, this may change in the (near) future, when their scope and requirements for implementation are formally stipulated by the PRC lawmaker. According to the PRC government’s roadmap, these disclosure standards will be implemented in phases rather than all at once. Initially, the scope is expected to prioritize listed and large-scale enterprises, focusing primarily on qualitative disclosures. Subsequently, the scope will expand to include non-listed enterprises and small and medium enterprises, while transitioning towards more rigorous quantitative requirements. China had planned to have the Basic Standards, Application Guidelines and Climate Standards in place by 2027 (following the release of the Climate Standards, this target has now been achieved ahead of schedule). By 2030, a unified national sustainability disclosure standard system is expected to be substantially in place. Therefore, enterprises should closely monitor the evolving implementation scope and timelines.
Overall, the Climate Standards adopt the principles, structure and terminologies as established by the Basic Standards. In addition, they are also aligned with the IFRS S2 Climate-related Disclosures.
In the General Provisions chapter, the Climate Standards clarify the objective of climate-related disclosures and the proportionality approach. I.e., the Climate Standards aim to standardize the disclosure of information by enterprises regarding climate-related risks, opportunities, and impacts (“Climate-related Information”) and ensure the quality of such information. The objective of corporate Climate-related Information disclosure is to provide investors, creditors, the government and its relevant departments, and other stakeholders with important Climate-related Information to enable them to make economic decisions, resource allocations, or other decisions. As to the proportionality approach, climate-related disclosures should not require excessive costs or efforts, and the methods for assessing financial impact and scenario analysis should be proportionate to the enterprise’s skills, capabilities, and resources.
The other chapters of the Climate Standards focus on 4 key pillars as already introduced in the Basic Standards, i.e. governance, strategy, risk and opportunity management as well as metrics and targets.
Please see below a brief introduction to these 4 pillars:
1. Governance
Regarding governance, the objective of an enterprise's disclosure of Climate-related Information is to enable primary users of sustainability information to understand the governance structure, control measures and procedures adopted by an enterprise to monitor and manage climate-related risks and opportunities.
To achieve this objective, enterprises need to disclose information on: (i) the governance body (including a board, committee or equivalent body) or individual(s) responsible for overseeing climate-related risks and opportunities, (ii) the management role(s) and supervision of them, and (iii) controls and procedures to support the overseeing of climate-related risks and opportunities.
The Climate Standards also encourage enterprises to use internal audits, legal departments or other departments with supervisory functions to monitor climate-related risks and opportunities, and to engage independent third parties to verify climate-related information.
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