China Releases Corporate Climate Reporting Standard

From ESG Foundations to Climate Focus: How China Got Here

China’s sustainability reporting journey has accelerated quickly.

In late 2024, the Ministry of Finance introduced baseline sustainability disclosure rules for listed companies. These laid the groundwork for consistent ESG reporting across China’s capital markets.

By mid-2025, draft climate standards aligned with IFRS Foundation sustainability guidance were released for consultation. At the same time, major stock exchanges began phasing in climate disclosures for large listed firms.

Alongside this, China expanded its national Emissions Trading System beyond power generation into sectors like steel, cement, and aluminium. Reporting quality and emissions data suddenly mattered far more.

What’s New in the China Corporate Climate Reporting Standard

The trial standard, finalised in December 2025, is closely aligned with ISSB IFRS S2, but with China-specific depth.

It requires companies to disclose:

• Climate governance and oversight

• Climate-related risks and opportunities

• Strategy and transition planning

• Metrics and targets, including emissions across value chains

Crucially, it adopts double materiality. Companies must report not only how climate change affects them financially, but also how their activities impact the climate.

Sector-specific guidance is already being developed for high-emitting industries, signalling tighter, more quantitative requirements ahead.

Future Outlook for Climate Disclosure in China

Although voluntary today, most analysts expect a phased move to mandatory reporting.

Over the next one to five years, disclosure is likely to expand to:

• Smaller listed firms

• Large private companies

• Non-financial and supply-chain emissions data

This aligns with China’s “dual carbon” goals and will likely be reinforced through the upcoming 15th Five-Year Plan. By 2030, China is expected to have a fully embedded national climate disclosure framework.

Why the China Corporate Climate Reporting Standard Matters

If you source from China, this matters now.

Chinese suppliers will increasingly be required to provide investor-grade climate data. That data will feed directly into UK requirements such as Streamlined Energy & Carbon Reporting, CSRD, and future CBAM-related disclosures.

Risks for UK businesses include:

• Gaps in Scope 3 emissions data

• Delays or disruption from non-compliant suppliers

• Increased cost volatility from carbon pricing

Opportunities include:

• More reliable, standardised supplier data

• Stronger low-carbon sourcing strategies

• Competitive advantage through transparent supply chains

Professional services, manufacturing, retail, and construction are likely to feel this first.

What UK Businesses Can Do Now

You don’t need to wait for mandatory enforcement to act.

Practical steps include:

• Mapping China-based suppliers against climate data readiness

• Engaging suppliers early on IFRS-aligned reporting expectations

• Building verification and audit processes into procurement

• Exploring low-carbon partnerships in steel, cement, and automotive supply chains

This is about resilience as much as compliance.

Turning Disclosure into Advantage

China’s corporate climate reporting standard signals a global shift towards comparable, credible climate data. For UK businesses, it’s a prompt to strengthen supply chains, not retreat from them.

Those who engage early will be better placed to manage risk, meet reporting obligations, and build future-proof, low-carbon value chains.

If you want to understand what this means for your suppliers or reporting strategy, now is the time to start the conversation.