China Sustainability Disclosure Standards (CSDS) -- Basic Standard

The Basic Standard of the China Sustainability Disclosure Standards (CSDS) is the top-tier standard of a unified national sustainability disclosure framework, formally issued on December 16, 2024 by the Ministry of Finance and eight other authorities. While drawing reference from the International Sustainability Standards Board's (ISSB) IFRS Sustainability Disclosure Standards, it is built as an independent disclosure framework tailored to China's policy and market environment. The CSDS framework has a three-tier structure -- "Basic Standard," "Specific Standards," and "Application Guidance" -- with the Basic Standard setting out the top-level principles common to specific standards (such as the forthcoming climate-related disclosure standard) and application guidance yet to be developed. Scope and implementation requirements await further rules; at present, voluntary application by companies is possible. The aims are to build a unified national sustainability disclosure system, provide investors with comparable and reliable information, improve the transparency of China's capital markets, and establish a China-specific system while ensuring alignment with international standards. Currently at the voluntary-application stage, mandatory application is expected to be phased in over time -- prioritizing listed companies, large state-owned enterprises, and financial institutions -- as scope and implementation requirements are clarified. Rather than prescribing individual disclosure items, the Basic Standard sets out principles common to the disclosure system as a whole: governance, strategy, risk management, metrics and targets, materiality, information reliability, and ongoing comparability.