China’s ESG regulatory framework has evolved significantly over the past two decades. In 2020, China announced its goal to achieve peak carbon by 2030 and carbon neutrality by 2060.
Since then, China has subsequently released a plethora of policies and voluntary guidelines to facilitate green transition. While ESG disclosures remain largely voluntary, last year saw a shift towards more structured and mandatory reporting.
Key ESG regulations in China currently include:
- Stock Exchange ESG Guidelines (2024) –
- Applies to SSE 180, STAR 50, SZSE 100, ChiNext Index, and dual-listed firms.
- Mandatory ESG disclosures by 2026.
- Listed companies are required to identify whether each topic in the guidelines has a significant impact (financial significance) on their business model, business operations, development strategy, financial status, operating results, profits, financial methods, and costs in the short, medium, and long term. Companies must also identify whether their performance under each topic has a significant impact on the economy, society, and the environment itself (impact significance).
- Ministry of Finance’s Sustainability Disclosure Guidelines (2024) –
- Aligns with IFRS S1 and S2 (governance, risk, targets).
- Double materiality approach (impact on both financials & ESG outcomes).
- Climate disclosure standards expected by 2027.
These mark the first stage in China’s plan to issue both general standards for corporate sustainability disclosures and climate related disclosure standards by 2027, as well as constituting an important step in the development of a disclosure culture in China.
What this means for in-house counsel
Prepare for mandatory disclosures
Early compliance planning is key for businesses operating in China.
Understand double materiality
ESG reporting must address both financial and environmental/social impacts.
Monitor upcoming climate regulations
China’s 2027 climate disclosure standards could reshape compliance obligations.
