China’s Ministry of Finance Publishes Climate Related Disclosure Standard for Corporate Sustainability Reporting

On December 19, 2025, nine central government bodies—including the Ministry of Finance and the Ministry of Ecology and Environment—jointly issued the Corporate Sustainability Disclosure Standard No. 1 – Climate (Trial).

The standard is based on the ISSB’s IFRS S2 Climate‑related Disclosures, and while it adopts the same core framework—governance, strategy, risk and opportunity management, and metrics and targets—the specific disclosure requirements have been adjusted to reflect China’s national conditions.

The standard explicitly states that, until the implementation scope and requirements are clearly defined, companies may adopt the standard on a voluntary basis. Over time, China is expected to expand the scope of application from listed companies to non‑listed companies, from large enterprises to SMEs, and from voluntary to mandatory disclosure.

Key Contents

The standard sets requirements in four areas: governance, strategy, risk and opportunity management, and metrics and targets.

• Part I: Governance
  This section specifies disclosure objectives and requirements for climate‑related governance, including:
  • Governing bodies or individuals responsible
  • Management information
  • Integrated disclosure of governance information
  • Disclosure requirements for third‑party assurance
• Part II: Strategy
  This section defines disclosure objectives for climate‑related strategy and requires companies to disclose:
  • Information on climate‑related risks and opportunities
  • How such factors affect corporate strategy and decision‑making
  • Current and expected financial impacts
  • Climate resilience assessments
• Part III: Risk and Opportunity Management
  This section defines disclosure objectives for managing climate‑related risks and opportunities, including:
  • How companies identify, assess, and manage climate‑related risks and opportunities
  • The degree to which these processes are integrated into overall risk management
  • Related disclosure requirements
• Part IV: Metrics and Targets
  This section specifies:
  • General industry metrics
  • Industry‑specific metrics
  • Climate‑related targets
  • Methods for calculating greenhouse gas emissions

Differences from IFRS S2

Although the Chinese standard aligns closely with IFRS S2 in terms of the core framework, several key differences exist.

• Additional Disclosure Requirement: Impact on Climate
  While IFRS S2 focuses on the impact of climate‑related risks on a company’s financial position, the Chinese standard also requires disclosure of how a company’s activities impact the climate.
• Adjustments to Disclosure Content

• • GHG calculation methodologies:
    IFRS S2 recommends using the GHG Protocol, whereas the Chinese standard emphasizes following calculation standards and guidelines issued or approved by Chinese authorities.
  • Carbon allowance transactions:
    The Chinese standard adds disclosure requirements for settlement and trading of carbon emission allowances.

• Treatment of Scope 3 Emissions
  IFRS S2 provides a first‑year exemption for Scope 3 disclosure.
  The Chinese standard does not include such an exemption. However, if a company is unable to calculate Scope 3 emissions despite making reasonable efforts, it may instead disclose its greenhouse gas management approach.

Future Implementation Plans

At a press conference, a representative of the Accounting Department of the Ministry of Finance explained the future implementation plan:

Currently, the climate disclosure standard is positioned as a trial document, and companies may adopt it voluntarily until the implementation scope and requirements are finalized.

Going forward, the government plans to:

• Implement the standard on a pilot basis
• Gradually expand the scope from listed to non‑listed companies, from large enterprises to SMEs, from qualitative to quantitative requirements, and from voluntary to mandatory disclosure

The original text of the Corporate Sustainability Disclosure Standard No. 1 – Climate (Trial) (Simplified Chinese) is available at:
https://kjs.mof.gov.cn/zhengcefabu/202512/t20251225_3980202.htm