CHINA Trends and Developments Contributed by: Rongliang Wu, Mei Wan, Qirong Huang and Xueqi Huang, Jin Mao Law Firm
Parallel to this, a three-tier standard architecture – comprising “carbon accounting guidelines”, “product carbon footprint”, “emissions monitoring and meas- urement” – is taking shape. New guidelines for GHG accounting and reporting have been rolled out for iron and steel, cement and primary aluminium, refining the emission-factor approach and piloting automatic- monitoring-based accounting. A MEE-led guideline for drafting product-carbon-footprint standards pro- poses 300 new standards, while the State Adminis- tration for Market Regulation is establishing national carbon-metrology centres and issuing metrological technical rules to underpin data quality. Development of national carbon emission rights trading market The national emissions trading system (ETS) was enlarged in March. Iron and steel, cement and prima- ry aluminium were officially added, bringing in 1,500 additional covered entities and pushing the share of national CO₂ emissions under the scheme above 60%. Regulated gases now include CO₂, CF₄ and C₂F₆. The system retains an intensity-based, no-absolute- cap design that continues to distribute allowances free of charge, while tightening mitigation incentives through annual allocation and compliance cycles and allowing up to 5% of obligations to be met with China Certified Emission Reduction (CCER) offsets, thereby creating a clear demand channel for voluntary-reduc- tion projects. Formation of the legislative framework for sustainable development information disclosure In 2025, China’s legislative framework for sustainable development information disclosure was formally established, marking the implementation of the tran- sition of ESG information disclosure from “voluntary” to “mandatory”. Top-level design for sustainable information disclosure finalised In November 2024, the Ministry of Finance and eight other central government ministries jointly issued the Corporate Sustainable Disclosure Standards – Basic Standards (Trial Implementation). This established a four-element disclosure framework – comprising “governance”, “strategy”, “risk” and “indicators” –
and clarified core principles such as value chain con- sideration and information correlation. In September 2025, the Ministry of Finance – together with multiple departments – simultaneously released the Application Guidelines for the Corporate Sustain- able Disclosure Standards – Basic Standards (Trial Implementation). This guideline refined key concepts, including: • the proportionality principle for determining the scope of the value chain; • requirements for the integrated disclosure of sus- tainable information and financial statements; and • the process for materiality assessment. Currently, it is in the stage of voluntary implementation by enterprises. Regulatory rules for sustainable information disclosure entered into force On 1 July 2025, the Measures for the Administration of Information Disclosure by Listed Companies issued by the China Securities Regulatory Commission (CSRC) was formally implemented. For the first time at the departmental regulation level, listed companies are required to mandatorily disclose ESG topics in their annual reports, and third-party assurance is encour- aged to enhance credibility. To support the implementation of the previously released Guidelines for the Preparation of Sustain- able Development Reports by Listed Companies, in September 2025, the Shanghai, Shenzhen and Beijing stock exchanges revised and issued the draft for com- ments on the Guidelines for the Preparation of Sus- tainable Development Reports by Listed Companies. This draft transforms the four-element framework of the Corporate Sustainable Disclosure Standards into a practical tool featuring “disclosure key points and examples”. It does not add new mandatory require- ments but enhances operability. Release of national standards for green finance and completion of standard unification In 2025, China took a milestone step in the con- struction of its green finance legal system. The State Administration for Market Regulation, the People’s
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