China’s Ministry of Finance, together with several other ministries, regulators and the central bank, has unveiled a new national climate reporting standard for corporate sustainability disclosure. The “Corporate Sustainable Disclosure Standard No. 1 – Climate (Trial)” is aligned with the International Financial Reporting Standards (IFRS) Foundation’s climate reporting framework, and is intended to strengthen climate-related risk, opportunity and impact reporting across Chinese companies.

Positioned initially as a voluntary trial standard, the Ministry of Finance said the framework will gradually expand in scope and ultimately evolve into mandatory climate disclosure requirements covering a broader set of corporations. The standard is a core part of China’s strategy to address climate change, support green and low-carbon economic transformation, and reduce greenwashing by standardizing climate information reporting.

The new standard is structured to closely follow the main pillars of the International Sustainability Standards Board’s IFRS S2 climate disclosure rules — including governance, strategy, risk and opportunity management, and metrics and targets — with China-specific adaptations. One notable addition is a requirement for companies to report on the climate impact of business activities, including value-chain impacts and foreseeable effects on climate change.

To ensure practical implementation across sectors, the Chinese authorities are developing industry-specific application guidance for sectors such as power, steel, coal, petroleum, fertilizer, aluminium, hydrogen, cement and automobiles. The rollout will prioritize key areas and extend from large listed companies to non-listed firms and SMEs, transitioning from voluntary to mandatory disclosures and from qualitative to quantitative requirements over time.

The launch of this climate standard signals China’s commitment to align domestic corporate sustainability reporting with global norms while tailoring requirements to local conditions, reinforcing its broader sustainable development and “dual carbon” targets at the corporate level.