China Climate-Related Disclosure Standard

Overview

China's Climate-Related Disclosure Standard (formally, "Enterprise Sustainability Disclosure Standard No. 1 -- Climate (Trial)") is Specific Standard No. 1 under the CSDS Basic Standard framework, being developed jointly by the Ministry of Finance and the Ministry of Ecology and Environment. A public consultation draft was published on April 30, 2025, making it the most advanced of the specific standards within the CSDS framework. The standard aims to require companies to disclose, in a unified manner, the impact of climate change on their business and finances, and their responses to climate-related risks and opportunities. Its design draws on the ISSB's IFRS S2 Climate-related Disclosures while being adapted to China's policy environment and industrial structure. It aims to improve the transparency of climate-related information, provide investors with comparable information, promote corporate management that accounts for climate risk, strengthen the credibility of China's capital markets, and ensure alignment with international disclosure standards (the ISSB). It is also positioned as the disclosure foundation supporting China's dual-carbon goals (peaking carbon emissions by 2030 and carbon neutrality by 2060). Phased implementation is planned, with listed companies, large state-owned enterprises, financial institutions, and industries with high climate risk expected to be prioritized. The standard is structured around four pillars aligned with IFRS S2: governance (board and management oversight of climate change); strategy (the impact of climate change on corporate strategy and finances); risk management (methods for identifying, assessing, and managing climate-related risks and opportunities); and metrics and targets (greenhouse gas emissions, decarbonization targets, and progress-tracking metrics).

Enforcement Timeline

- Confirmation of the formal issuance status of the Climate-Related Disclosure Standard (verification against primary sources for the formal issuance date).

- Formal incorporation into the CSDS framework.

- Phased application to listed companies.

- Expansion to thematic disclosure standards (water, biodiversity, etc.).

- Ongoing alignment with the ISSB.

Business Impact

Companies will need to build management systems for Scope 1, 2, and 3 emissions, conduct climate risk assessments, strengthen coordination between finance and sustainability departments, upgrade governance structures, and manage alignment with overseas regimes (ISSB, EU, SEC, etc.). For companies with international investors, addressing both domestic Chinese requirements and international disclosure regimes simultaneously will be important. The standard is expected to operate in coordination with the CSDS Basic Standard, the Stock Exchange ESG Disclosure Rules, and the corporate environmental information disclosure regime. Data such as greenhouse gas emissions will need to be aligned with the China ETS and carbon emissions reporting systems handled under the carbon and energy management domain.