On 6 November 2024, three major stock exchanges in China, the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE) and the Beijing Stock Exchange (BSE), opened a two-week public consultation on the “Handbook for Self-Regulatory Supervision on Listed Companies – Compilation of Sustainable Development Reports” (Handbook),which provides an in-depth and detailed guide for practitioners from listed companies. Meanwhile, the SSE also formulated its “Three-Year Action Plan on Improving ESG Information Disclosure Quality of Listed Companies on the SSE (2024-2026)”.
On 17 December 2024, China’s Ministry of Finance (MoF), together with eight other government authorities, such as the People’s Bank of China (PBoC), the Ministry of Ecology and Environment (MEE), the National Financial Regulatory Administration (NFRA), jointly released the “Corporate Sustainability Disclosure Standards (CSDS) – Basic Standards (Trial)”, marking a significant step towards establishing a nationwide and ISSB-aligned disclosure framework for Chinese companies by 2030. The CSDS – Basic Standards (Trial) consists of six chapters and 31 articles, outlining general provisions, disclosure objectives and principles, information quality requirements, disclosure elements, as well as supplementary requirements and provisions.
This represents a significant milestone, demonstrating China’s ambitions at the national level for aligning with global standards, promoting transparency and accountability in corporate ESG practices.
Background
Since April 2024, China has rolled out a series of significant measures on sustainability information disclosure.
On 12 April 2024, the above-mentioned three exchanges individually issued “Guidelines on Self-Regulation of Listed Companies – Sustainability Report (Trial)” under the guidance of China Securities Regulatory Commission (CSRC) based on a prior public consultation from February 2024. According to this policy, certain companies are required to publish their 2025 sustainability reports before 30 April 2026. This includes companies in the SSE 180 Index, the SSE Science and Technology Innovation Board 50 Index (STAR 50), the SZSE 100 Index, the tech-focused ChiNext Index as well as companies listed on both domestic and overseas markets. The policy represented a substantial shift in the regulatory landscape for corporate sustainability in China.
One month later, on 27 May 2024, the MoF released the draft guideline “Corporate Sustainability Disclosure Standards (CSDS) – Basic Standards and Explanation of the Drafting” to set a unified and standardised general requirement for corporate sustainability information disclosure.

Double materiality and the four-pillar approach
All the above frameworks recently introduced in China have adopted the four-pillar approach commonly used by most major global frameworks or standards, including 1) governance, 2) strategy, 3) impacts, risks and opportunities management, and 4) metrics and targets. They all use a double materiality lens. Entities are required to identify whether each topic is expected to have a major impact on its business model, operations, development strategy, financial position, operating results, cash flows, financing methods and costs over the short, medium and long term (financial materiality); and whether an entity’s performance in that topical area has a material impact on the economy, society and environment (impact materiality).
Alignment with international standards
The Guidelines, together with the Handbook, are largely aligned with international standards, i.e., the EU’s Corporate Sustainability Reporting Directive (CSRD), as well as the ISSB’s International Financial Reporting Standards (IFRS) S1 – General Requirements for Disclosure of Sustainability-related Financial Information and S2 – Climate-related Disclosures. The alignment helps to reduce the preparation cost of sustainability-related disclosures for companies that are subject to various disclosure regimes.
Though the CSDS – Basic Standards (Trial) drew on the core positioning and advantages of the ISSB Standards, its core contents at the current stage are aligned to those of ISSB’s IFRS S1 only. The climate disclosure standards and guiding documents are set for publication by 2027, with alignment efforts to ISSB’s IFRS S2 expected beforehand. This alignment is crucial as it might open doors for Chinese companies to attract international investments, enhancing their competitiveness on the global market.
From Guidelines to Handbook
The Guidelines emphasise the importance of addressing environmental and climate concerns, fulfilling social responsibilities, and improving corporate governance. They cover a total of 21 ESG topics, divided into environmental (8), social (9) and governance (4) issues.
While the Guidelines create the framework, the Handbook provides a “toolbox” for listed companies to improve governance structures and procedures for sustainable development, identify material issues, and analyse sustainability-related risks and opportunities. The Handbook refines the relevant disclosure requirements of the Guidelines into disclosure points, and specific applicable explanations are provided to facilitate the compilation of sustainability reports. It is expected that sector-specific or topical documents will be designed to gradually enrich this toolbox.
CSDS – A nationwide corporate sustainability disclosure system
The CSDS – Basic Standards (Trial) consist of the basic standard, thematic standards and application guidance. Alongside a standard on climate-related disclosures, a number of thematic standards span environment, social and governance topics. A set of future handbooks will offer interpretation and guidance on application and industry-specific perspectives with additional supporting documents issued as needed. This detailed guidance helps companies meet compliance requirements while equipping investors with insights to assess sustainability risks and opportunities effectively.
Key milestones will be the adoption of climate-related disclosure standards by 2027, and an entire suite of CSDS disclosure standards with guiding documents by 2030. This timeline reflects China’s urgent need to address climate risks, particularly as the nation strives for the “dual carbon” goals.
The adoption of CSDS will follow a phased approach rather than a “one-size-fits-all” model. Implementation will start with listed companies before extending to non-listed ones, large corporations before small and medium-sized enterprises, qualitative before quantitative disclosures, and from voluntary adoption to mandatory requirements. This gradual rollout aims to allow businesses adapt and ensures a smooth transition towards comprehensive ESG reporting. During the interim period, while the full suite of CSDS and implementation requirements are being developed, companies can adopt CSDS on a voluntarily basis.
Looking ahead, China’s work on ESG disclosure could inspire other emerging markets to follow suit by establishing stringent and internationally aligned standards, contributing to a more transparent and sustainable global economy.
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