China Introduces National Climate Disclosure for Companies

China has released its first national corporate climate disclosure framework, a move set to reshape how companies operating in or linked to the Chinese market report climate-related information. The “Corporate Sustainable Disclosure Standard No. 1 – Climate (Trial)” was launched by China’s Ministry of Finance, together with other ministries, the central bank, and financial regulators. The standard aligns with the International Financial Reporting Standards (IFRS) framework and is designed to help companies disclose climate-related risks, opportunities, and impacts, supporting China’s broader green development and “dual carbon” objectives.

Structurally, the new standard closely follows the IFRS Foundation’s International Sustainability Standards Board (ISSB) climate standard, IFRS S2. It is organized around four pillars: governance, strategy, risk and opportunity management, and metrics and targets. This structure reflects China’s intention to maintain strong alignment with international sustainability reporting while incorporating domestic policy priorities.

One key difference from IFRS S2 is the explicit requirement for climate impact disclosures. Companies must report not only how climate change may affect their financial performance, but also how their operations and value chains impact the climate. This approach reflects the principle of double materiality, which considers both financial risks to the company and the environmental effects of its activities.

The standard also mandates structured reporting of greenhouse gas inventories, including Scope 1 and Scope 2 emissions, and eventually Scope 3 emissions. Companies are expected to disclose climate scenario analyses, transition plans, and emissions reduction targets, aligning corporate reporting with China’s goals of peaking carbon dioxide emissions before 2030 and achieving carbon neutrality by 2060.

While the initial release sets general disclosure requirements across industries, Chinese authorities are developing sector-specific guidance. The Ministry of Finance noted that high-impact sectors — including power generation, steel, coal, petroleum, fertilizer, aluminum, hydrogen, cement, and automobiles — will receive tailored application guidelines over time. The system combines basic guidelines, specific requirements, and industry-level rules.

Initially voluntary, the Ministry of Finance plans to gradually expand the standard toward mandatory climate disclosures. The framework will progressively cover a wider range of companies, extending from listed to non-listed firms, from large enterprises to small and medium-sized businesses, and from qualitative reporting to more quantitative requirements.

According to officials, the trial standard is central to China’s strategy to address climate change and accelerate green economic and social transformation. It is intended to guide capital toward low-carbon projects, reduce greenwashing through standardized disclosures, and provide tools to assess progress toward national climate objectives at the corporate level. The guidelines aim to “establish a transparent, comparable, and reliable climate information disclosure system,” while promoting green and low-carbon development, guiding market expectations, regulating corporate behavior, and translating China’s national climate strategy into measurable corporate action.

China’s new standard follows a year after Mexico’s Ministry of Finance and Public Credit made it mandatory for public-interest companies — including brokerage firms, their reporting entities, and banks — to prepare and disclose sustainability reports aligned with ISSB standards, including IFRS S1 and IFRS S2. The Mexican standard came into force in January 2025, with reports due in 2026.

Impact for Mexican Companies

For Mexican firms with operations in China or strong China’s new standard follows a year after Mexico’s Ministry of Finance and Public Credit made it mandatory for public-interest companies — including brokerage firms, their reporting entities, and banks — to prepare and disclose sustainability reports aligned with ISSB standards, including IFRS S1 and IFRS S2. The Mexican standard came into force in January 2025, with reports due in 2026.

Companies potentially affected include Nemak, Grupo Bimbo, Vitro and CEMEX. Nemak operates manufacturing plants in China serving global automotive clients, a sector prioritized for industry-specific guidance. Grupo Bimbo maintains production and commercial operations in China, requiring detailed emissions measurement and climate risk reporting across its supply chain. Vitro has industrial operations and partnerships linked to the automotive and packaging sectors, while CEMEX faces exposure through clients, suppliers, and financing connected to China.

For these companies, compliance will require not only adapting sustainability reports but also strengthening internal climate governance, emissions tracking, and data collection across suppliers and partners. Analysts note that China’s framework could challenge the dominance of the “Anglo-Saxon” sustainability reporting model represented by ISSB standards and may encourage other jurisdictions to incorporate double materiality into their disclosure requirements.