China Sustainability Reporting: Requirements 2026 Explained

Scope 3 emissions are optional under the rules that roughly 450 Chinese listed companies had to follow for their first mandatory reports, filed by 30 April 2026. The national climate standard issued on 19 December 2025 addresses them, but no one is yet required to apply it.

The most demanding instrument in China's regime is voluntary. The binding one asks for less.

That inversion explains most of the confusion in coverage of this topic, including commentary describing China's rules as going beyond global standards on the strength of provisions that are not in force. What follows separates the two layers, because a supplier or an investor needs to know which document a given requirement sits in.

The Two Layers Of China's Regime

The first layer is exchange listing rules. Shanghai, Shenzhen and Beijing issued sustainability reporting guidelines in February 2024, effective 1 May 2024. On the Shanghai exchange, the instrument is Guidelines No. 14, Sustainability Report (Trial). These are mandatory for a defined set of index constituents and carry a filing deadline.

The second layer is national accounting standards from the Ministry of Finance, issued with other ministries. These are broader in ambition, aligned with the International Sustainability Standards Board on a convergence approach, and voluntary. The IFRS Foundation's own jurisdictional snapshot puts it plainly: until the implementation scope and requirements are specified, entities may apply the standards voluntarily, and whether reporting is required, and by whom, is to be determined.

Keep them apart. A requirement in the national standards tells you where China is heading. A requirement in the exchange rules tells you what a listed counterparty had to publish this year.

What The Exchange Rules Actually Require

Mandatory application covers constituents of the SSE 180 and STAR 50 indices that were included continuously during the designated reporting term, constituents of the Shenzhen 100 and ChiNext indices, and companies dual-listed domestically and overseas. The Beijing exchange guideline is voluntary, and other listed companies are encouraged, not required, to follow the rules.

That totals over 450 companies, roughly half the market by value. The first reports cover calendar year 2025 and were due by 30 April 2026.

The content covers 21 topics: eight environmental, nine social, and four on sustainability governance. All covered topics are to be presented in the report, subject to the materiality adjustment below.

Double materiality operates as two tests. Financial materiality asks whether and how sustainability risks and opportunities for a topic will significantly affect financial performance. Impact materiality asks whether and how the company's actions on a topic affect environmental, social and governance matters more broadly, including people, supply chain and society. Where a topic lacks either kind of materiality, a company may adjust its disclosure but has to explain why in the report. Companies may also add topics outside the list.

On emissions, the distinction that matters. Scope 1 and Scope 2 are required under the climate change topic, with calculation-basis details, and no materiality trigger is attached to them. Upstream and downstream emissions (Scope 3) are optional.

So a Chinese index constituent's FY2025 report should contain Scope 1 and 2 figures. If it contains Scope 3, that was a choice.

The Exchange Application Guidance

In January 2025, the Shanghai Exchange released compilation guidance to help companies apply Guidelines No. 14 (Guide No. 4 for main board companies) and Guide No. 13 for the STAR Market.

Two attachments were launched with it. No. 1 covers general requirements and the disclosure framework, helping companies build governance frameworks and management procedures. No. 2 covers response to climate change, setting out carbon emission calculation methods and scenario analysis procedures and summarising 22 climate-related disclosure focuses.

The guidance offers sample texts, working methods and disclosure focuses, and explains technical matters including physical and transition risks, climate-related financial impacts, transition plans and the scope of greenhouse gas emissions.

It is voluntary and adds no new mandatory disclosure requirements. Companies may follow it as they see fit. For anyone reading a FY2025 report and wondering why two companies in the same sector look so different, this is a large part of the answer: the method guidance was optional, and the sample texts were available to use or ignored.

The National Standards And The 2030 Roadmap

Three instruments, all current. The Ministry

The Ministry of Finance, along with eight other ministries,  issued the Basic Standard (Trial) on 20 November 2024, providing overarching requirements. Application Guidance followed on 3 September 2025, in two categories covering industry-specific guidance and guidance on applying the standards. Climate Standard No. 1 (Trial) was issued jointly on 19 December 2025, setting requirements for disclosing climate-related risks, opportunities and impacts.

The roadmap is explicit. The Basic Standard, the climate standard and application guidance are to be issued successively by 2027, with a unified national system basically established by 2030. The direction of travel runs from listed to non-listed companies, from large to smaller ones, from qualitative to quantitative requirements, and from voluntary to mandatory.

Several differences from ISSB standards are worth noting for anyone mapping disclosures across jurisdictions. Neither standard requires considering or referring to SASB standards. The climate standard does not require the industry-based guidance referenced in IFRS S2, and industry guidance for it is still under development. The Basic Standard provides no extensions of transition reliefs, does not specify where disclosures must be located, and encourages assurance without requiring it.

Reporting timing aligns with financial statement publication unless a regulator specifies otherwise.

Where The Two Layers Disagree On Materiality

This is the subtlest gap and the one most likely to trip up a comparison exercise.

The exchange rules apply the two-test double materiality structure described above. The national Basic Standard takes a different route. Its materiality definition aligns with IFRS S1 and focuses on information useful to existing and potential investors and lenders. Impact information is assessed by scale, scope, and likelihood, and companies must not obscure material risk and opportunity information with non-material information or with impact information, which must remain distinguishable.

Those are not the same instruction. One treats impact as a parallel test that can pull a topic into the report. The other treats impact as information that must remain separate from the investor-focused core so it does not crowd it out.

If you are reconciling a Chinese disclosure against ESRS or against IFRS S1, establish first which layer the company reported under. A FY2025 mandatory report answers to the exchange test.

The Gaps

Start with an honest limitation. Systematic quality statistics for the FY2025 reporting round, such as how many of the covered companies disclosed Scope 3 or obtained assurance, were not available from a credible source at the time of writing. Treat any single percentage you see quoted for that round as unverified until you can trace it.

Identifiable structural gaps, and several come from named experts rather than inference.

Greenpeace East Asia's Bao Qiong has pointed out that the rules will have limited immediate effect on overseas emissions, because many entities funding overseas projects, including non-listed subsidiaries and special purpose vehicles, are not the standards' main targets. Minority stakes and joint ventures that do not require full consolidation may fall below the materiality threshold and stay invisible in domestic climate reports unless deemed financially material.

Christoph Nedopil Wang of the Griffith Asia Institute expects little direct impact on high-emitting overseas activities in the short term, with stronger enforcement potentially pushing divestment from stranded assets over the medium to long term.

Add two more from the structure of the rules themselves. Assurance is encouraged and not required, so comparability of verification across reports is low. And one of the exchanges' disclosure categories, rural revitalization, has no counterpart in ESRS or IFRS S1, so a mapping exercise will find content with nowhere to go.

What It Means For Foreign Suppliers

The practical consequence arrives as a data request rather than a regulation.

A Chinese index constituent reporting on supply chain topics, and any that chose to report Scope 3, needs primary data from the companies selling into it. That request lands on a Chinese reporting calendar, often in Chinese, and ahead of a 30 April filing deadline rather than your own reporting cycle.

Three preparations are worth making. Know whether your Chinese customers are in the covered indices, because that determines whether they face a deadline or merely an aspiration. Check that figures your Chinese subsidiary reports locally reconcile with what the group reports elsewhere, since local and group boundaries frequently differ. And name an owner for the response on the Chinese side, which is the gap most often found when the request arrives.

Then watch the roadmap. Extension beyond large listed companies by 2030 means direct obligations may eventually follow for larger non-listed entities, including subsidiaries of foreign groups.

A second pressure is running the other way. Greenpeace East Asia's Bao Qiong has argued the Chinese rules directly mirror the EU's corporate sustainability reporting directive, which in her reading simplifies compliance with EU sustainability and supply chain due diligence requirements for companies operating across both. Meanwhile, the EU carbon border adjustment mechanism took effect in January 2026, creating its own incentive for Chinese exporters in covered sectors to produce verifiable emissions data.

For a supplier sitting between the two systems, the useful inference is that the emissions data requests are converging even where the reporting frameworks have not. Build the underlying activity dataset once, at product or site level, rather than assembling a separate answer for each customer's framework.

What It Means For Investors

Read FY2025 reports as a first cycle under trial rules with voluntary method guidance, not as a comparable dataset.

Three questions make the difference. Which index was the company in, and was it in continuously, since that determines whether the report was mandatory? Does the report contain Scope 3, and if so, on what boundary, given it was optional? And where a topic was dropped, what explanation was given, because the rules require that explanation and its quality is informative about the rest.

On assurance, check whether any was obtained at all before asking to what level. Neither layer requires it.

Position as of 6 November 2026. The exchange requirements are described from a law firm analysis of the February 2024 guidelines and from the Shanghai exchange's own announcement of its compilation guidance, and the national standards from the IFRS Foundation's jurisdictional snapshot for China; none of it is taken from the Chinese-language rule text, so confirm scope, topics and emissions requirements against the current guidelines and any amendments before relying on them. Dates for two national instruments differ between sources consulted: the Basic Standard is given here as 20 November 2024 and Climate Standard No. 1 as 19 December 2025, following the IFRS Foundation, while secondary commentary dates them to December 2024 and 25 December 2025.—the national standards are voluntary,s as the IFRS Foundation describes them, and their implementation scope is not specified. No systematic statistics on FY2025 report quality, Scope 3 uptake or assurance rates are given because none could be verified; the company count of over 450 and the share of market value are as reported by secondary sources. Expert criticisms are attributed to the individuals and organizations named and are their views, not findings. Nothing here is legal, accounting, assurance or investment advice, and in-scope determinations should be made with qualified advisers.

Sources

Shanghai Stock Exchange, Clifford Chance, IFRS Foundation, Ministry of Finance, Ministry of Finance, Green Central Banking, Greenpeace East Asia and Griffith Asia Institute

This article is intended for general professional information and does not constitute legal, financial, or investment advice.