China’s Major Exchanges Set New Sustainability Reporting Standards
In a landmark move, the Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange (SZSE), and Beijing Stock Exchange (BSE) have unveiled comprehensive sustainability reporting guidelines for listed companies. Effective from 2026, hundreds of larger cap and dual-listed firms will be required to disclose essential Environmental, Social, and Governance (ESG) insights.
China now aligns with global peers in advancing sustainability reporting standards, joining initiatives such as the EU’s Corporate Sustainable Reporting Directive (CSRD), the U.S. SEC’s forthcoming climate disclosure regulations, and similar efforts in Australia, Brazil, Singapore, and the UK.
The new guidelines prioritize four core content areas: governance, strategy, impact, and risk/opportunity management, emphasizing a “double materiality” approach. This entails reporting on both the risks and impacts of sustainability issues on businesses and their broader environmental and societal effects.
Covering a wide spectrum of ESG topics, including climate action, biodiversity preservation, circular economy practices, and supply chain integrity, the guidelines underscore China’s commitment to sustainable development. Notably, they mandate reporting on Scope 3 value chain greenhouse gas emissions, addressing concerns raised by companies and regulators alike.
These regulations apply to over 450 companies, including those on premier indices like the Shenzhen 100 and SSE 180, as well as dual-listed entities. This encompasses approximately half of the total market value. While mandatory for larger players, the guidelines are introduced voluntarily on the Beijing exchange, known for its SME focus.
Reporting under these guidelines will commence in 2026 for the 2025 reporting period, marking a significant step towards enhanced transparency and accountability in China’s financial markets. Stay tuned for more updates on this pivotal development!
Source: ESGtoday.com