China releases first climate sustainability disclosure standard aligned with ISSB IFRS S2

China's Ministry of Finance, with eight other central ministries, released the first Chinese Sustainability Disclosure Standard on Climate (Trial) on December 25, 2025, adopting the ISSB four-pillar framework. The convergence with global standards reduces reporting burdens for multinationals and offers Indian regulators and BRSR-reporting companies a reference point for cross-border comparability.

China's Ministry of Finance, collaborating with eight other central ministries including the People's Bank of China, released the Chinese Sustainability Disclosure Standards No. 1 – Climate (Trial) on December 25, 2025. As the first thematic standard following the Basic Standards (Trial) issued one year prior, it adopts the four-pillar framework of governance, strategy, risk and opportunity management, and metrics and targets, ensuring comparability with the International Sustainability Standards Board's IFRS S2. It mandates greenhouse gas emissions disclosure across Scopes 1, 2, and 3.

Enterprises across China's manufacturing economy and dual-listed entities are affected, with the standard easing cross-border capital flows by aligning with global expectations. Financial institutions face specific requirements to report financed emissions and climate-risk exposure across asset classes, describing carbon-accounting methodologies and how they integrate climate considerations into investment and lending. High-impact sectors including steel, power, cement, and aluminium will receive industry-specific application guidelines currently in development, providing technical granularity for benchmarking and performance tracking across the industrial base.

Covered companies should use the initial voluntary period to assess internal data gaps and strengthen sustainability governance systems before the Ministry of Finance determines the final mandatory scope. Firms should leverage provisions for reasonably obtainable information to manage complex value-chain emissions without excessive cost. Affected entities should monitor the forthcoming sectoral guides and the broader goal of a unified national ESG reporting system by 2030, supporting China's dual carbon targets of peaking emissions by 2030 and neutrality by 2060.

Key figure — Release date: December 25, 2025 for the Climate (Trial) disclosure standard