Chinese Mainland

Yes.

In the mainland of China, general ESG disclosure requirements are primarily aimed at listed companies:

a. Self-regulatory Guidelines of the Shenzhen Stock Exchange for Listed Companies No. 1 - Standardized Operation of Main Board-Listed Companies: (i) require listed companies included in the Shenzhen Stock Exchange 100 Index to disclose their Social Responsibility (SR) reports separately in accordance with the relevant provisions of the Guidelines for Standardized Operation of Listed Companies of the Exchange; and (ii) encourage other companies listed on the Shenzhen Stock Exchange to disclose their SR reports.

b. Self-regulatory Guidelines of the Shanghai Stock Exchange for Listed Companies No. 1 - Standardized Operation require (i) companies listed on the Shanghai Stock Exchange Corporate Governance Sector, (ii) companies simultaneously listed on both the Shanghai Stock Exchange and in jurisdictions outside the mainland of China, and (iii) financial companies to disclose their SR reports at the same time as their annual reports. Other companies listed on the Shanghai Stock Exchange are encouraged to disclose their SR reports at the same time as their annual reports.

c. Notice on Conducting Disclosure of 2021 Annual Reports of Listed Companies on the Shanghai Stock Exchange's Sci-Tech Innovation Board (SSE STAR Market) requires SSE STAR Market-listed companies to disclose ESG-related information in their annual reports, and to separately prepare and disclose ESG reports, SR reports, sustainable development reports, environmental responsibility reports, and other documents as appropriate. The companies included in the SSE STAR Market 50 Index should disclose their SR report at the same time as their annual reports; however, those which have already disclosed ESG reports are exempted from separate disclosure of SR reports. Other companies listed on the SSE STAR Market are encouraged to disclose ESG reports or SR reports at the same time as their annual reports. When preparing their ESG reports or SR reports, companies should, as a key focus, disclose actions taken to support the “carbon peak and carbon neutrality” goals and to promote sustainable development.

d. Self-regulatory Guidelines of the Shenzhen Stock Exchange for Listed Companies No. 17 - Sustainable Development Report (Trial) require listed companies included in the Shenzhen Stock Exchange 100 Index, Growth Enterprise Index, and enterprises simultaneously listed on the exchanges in China and abroad to disclose sustainability reports that cover typical and more innovative ESG topics.

e. Self-regulatory Guidelines of the Shanghai Stock Exchange for Listed Companies No. 14 - Sustainable Development Report (Trial) require listed companies included in the Shanghai Stock Exchange 180 Index, STAR 50 Index, and enterprises simultaneously listed on the exchanges in China and abroad to disclose sustainability reports that cover typical and more innovative ESG topics.

f. Self-regulatory Guidelines of the Beijing Stock Exchange for Listed Companies No. 11 - Sustainable Development Report (Trial) stipulate similar rules as those in sections A.2(d) and (e) above for Beijing Stock Exchange-listed companies, but they are proposed to be non-mandatory at this stage.

The guidelines mentioned in sections A.2(d) and (e) above are termed the “Sustainable Development Report Guidelines” in this chapter.

g. Measures for Administration of Law-based Disclosure of Environmental Information by Enterprises (the MEE Measures) issued by the Ministry of Ecology and Environment (MEE) stipulate that certain enterprises are subject to mandatory environmental disclosure requirements. These include:

(i) key pollutant-discharging entities;

(ii) enterprises subject to compulsory cleaner production audit;

(iii) listed companies and their subsidiaries at all levels (to the extent consolidated) that are subject to the provisions of Article 8(1) of the MEE Measures (e.g. companies that have breached environmental laws);

(iv) enterprises issuing enterprise bonds and corporate bonds, and non-financial enterprises issuing debt financing instruments that are subject to the provisions of Article 8 of the MEE Measures; and

(v) other enterprises that shall disclose environmental information as prescribed by laws and regulations.

h. Basic Standard for Enterprise Sustainability Disclosure (Trial) (the Basic Standard) issued by the Ministry of Finance sets out general requirements for the disclosure of corporate sustainability information. The Basic Standard was issued in 2024 and is currently voluntary. It stipulates that it will apply to listed companies, other enterprises as required by regulations (which have not yet been issued) and entities that choose to disclose sustainability information voluntarily. The Basic Standard lays the foundation for a national unified sustainability disclosure system which is intended to apply in phases, from listed companies to non-listed companies, and from large enterprises to SMEs.

i. Application Guidance to the Basic Standard for Enterprise Sustainability Disclosure (Trial) (the Application Guidance) issued by the Ministry of Finance in September 2025 provides practical guidance on the application of the Basic Standard, including guidance relating to value chains, connectivity of sustainability information, materiality assessment and sustainability-related financial information. The Application Guidance is currently voluntary and is intended to facilitate implementation of the national sustainability disclosure framework.

j. Corporate Sustainability Disclosure Standard No. 1 – Climate (Trial) (the Climate Standard) issued by the Ministry of Finance in December 2025 sets out specific disclosure requirements for climate-related information. It is broadly aligned with IFRS S2 and forms part of China's national sustainability disclosure framework. Like the Basic Standard, the Climate Standard is currently voluntary.

The disclosure requirements of the Shenzhen Stock Exchange and Shanghai Stock Exchange discussed in sections A.2(a), (b) and (c) are mandatory for (i) listed companies included in the Shenzhen Stock Exchange 100 Index, (ii) representative companies listed on the Shanghai Stock Exchange Corporate Governance Sector, (iii) Shanghai Stock Exchange-listed financial companies, (iv) companies listed on both the Shanghai Stock Exchange and other jurisdictions outside the mainland of China, and (v) SSE STAR Market-listed companies. They are otherwise voluntary for other listed companies on the Shenzhen Stock Exchange or Shanghai Stock Exchange.

The disclosure requirements under the Sustainable Development Report Guidelines of the Shenzhen Stock Exchange and Shanghai Stock Exchange (as discussed in sections A.2(d) and (e) above) are mandatory for (i) listed companies included in the Shenzhen Stock Exchange 100 Index, (ii) companies included in the Growth Enterprise Index, (iii) listed companies included in the Shanghai Stock Exchange 180 Index, (iv) companies included in the STAR 50 Index, and (v) companies listed on the Shenzhen Stock Exchange or Shanghai Stock Exchange and other jurisdictions outside the mainland of China. 

The Sustainable Development Report Guidelines stipulate similar rules for companies listed on the Beijing Stock Exchange, but they are proposed to be non-mandatory. There is no indication of when they may become mandatory.

The requirements under the MEE Measures on environmental disclosure are mandatory for certain enterprises as discussed in section A.2 above.

The Basic Standard, Application Guidance and the Climate Standard are currently implemented by enterprises on a voluntary basis and are anticipated to gradually shift from voluntary to mandatory disclosure. The timing for mandatory application has not yet been specified.

Based on the requirements of the Shenzhen Stock Exchange and Shanghai Stock Exchange as discussed in sections A.2(a) to (c) above, various ESG aspects are covered. Specifically for companies listed on the SSE STAR Market, the key focus is on their actions to support the “carbon peak and carbon neutrality” goals and promote sustainable development.

For companies subject to the Sustainable Development Report Guidelines of the Shenzhen Stock Exchange and Shanghai Stock Exchange, various typical and more innovative ESG aspects are covered. The environmental aspect mainly includes climate change (including GHG emissions), pollution, biodiversity and ecosystem, resource use, and circular economy. The social aspect mainly includes rural revitalization and social contribution, innovation and scientific ethics, supply chain and customers, and workers’ rights. The governance aspect mainly includes corporate sustainable development management systems, anti-bribery and anti-unfair competition. In addition, in January 2026, the Shanghai, Shenzhen and Beijing Stock Exchanges issued Application Guidelines on Sustainability Report Preparation, including guidance on pollutant emissions, energy use and water use, to facilitate implementation of the Sustainable Development Report Guidelines.

For companies subject to the MEE Measures, the key environmental disclosure aspects include:

1. basic information of the enterprise (production and environmental protection information);
2. information on the environmental management of the enterprise;
3. information on the generation, control and discharge of pollutants;
4. carbon emission information;
5. ecological and environmental emergency response information;
6. information on violation of ecological and environmental laws;
7. law-based annual disclosure of temporary environmental information; and
8. other environmental information as prescribed by laws and regulations.

The Basic Standard, which is based on IFRS S1, sets out general requirements for the disclosure of corporate sustainability information and does not cover specific ESG topics. The Climate Standard is based on IFRS S2’s four-pillar disclosure framework and sets out detailed requirements for climate-related disclosures. Further specific standards are expected to be issued to provide detailed disclosure requirements for other ESG topics.

The Basic Standard is highly consistent with IFRS S1 in terms of disclosure structure (i.e., the four pillars of governance, strategy, risk and opportunity management, and metrics and targets), as well as information quality requirements, including reliability, relevance, comparability, verifiability, understandability, and timeliness. At the same time, it incorporates localised adjustments to reflect China’s national context, including modifications in disclosure objectives and topics, and certain expressions.

China has also released its Climate Standard, which is highly consistent with IFRS S2. It also adopts the four-pillar disclosure framework of IFRS S2 and sets similar requirements for the disclosure of GHG emissions, covering Scope 1, Scope 2, and Scope 3 GHG emissions. It also requires enterprises to conduct climate scenario analysis, disclose climate-related targets, and disclose their progress towards achieving those targets. However, China has not directly adopted IFRS S2. Accordingly, the reliefs introduced by the IFRS S2 December 2025 Amendments do not automatically apply in China and have not been incorporated into the current PRC sustainability disclosure framework.

The other regulatory disclosure requirements do not make any specific reference to international standards. However, based on a recent analysis by the China Association for Public Companies, they share some commonalities with IFRS S1 and IFRS S2 in terms of framework structure, basic concepts, disclosure principles, disclosure framework, and disclosure of climate change issues. This is particularly the case for the Sustainable Development Report Guidelines.

In practice, many companies listed on the Shanghai Stock Exchange or Shenzhen Stock Exchange prepare their ESG/SR reports with reference to international standards/frameworks, such as the GRI standards, ISO 26000 and TCFD Recommendations.

The disclosure requirements of the Shenzhen Stock Exchange and Shanghai Stock Exchange adopt double materiality.

The Basic Standard and Climate Standard also adopt double materiality.

Based on the Sustainable Development Report Guidelines of the Shanghai Stock Exchange and Shenzhen Stock Exchange:

1. The disclosing entity should account for and disclose the total GHG emissions during the reporting period and convert the emissions of different GHGs into metric tonnes of CO₂ equivalent (tCO₂e). The entity should disclose the emissions categorised into Scope 1 and Scope 2 emissions, and it is encouraged to disclose Scope 3 emissions if it has the conditions to do so.
2. The disclosing entity should disclose the standards, methods, assumptions, or calculation tools used to account for GHG emissions, and explain the consolidation methods of the emissions (such as equity proportion, financial control, operational control, etc.). If there are changes in the accounting standards, methods and assumptions etc. during the reporting period, the reasons should be explained and the specific impacts should be disclosed.

On 18 October 2023, the MEE issued the Notice on the Reporting and Verification of Greenhouse Gas Emissions of Enterprises in Certain Key Industries in 2023-2025, which stipulates that key emission enterprises, including those with annual carbon emissions of 26,000 tCO₂ or above in key industries, such as petrochemicals, chemicals, building materials, steel, non-ferrous metals, paper, and civil aviation, are required to report their GHG emissions onto the National Carbon Market Information Network. This notice focuses on designated emission factors relating to manufacturing and operation, encompassing only Scope 1 and Scope 2 emissions. The notice outlines the reporting and verification methods prescribed by the MEE in the Guidance for Verification of Enterprise Greenhouse Gas Emissions Reporting (Trial).

The Climate Standard, which currently applies on a voluntary basis, requires enterprises to disclose GHG emissions, including Scope 1, Scope 2, and Scope 3 emissions. It will apply to enterprises as prescribed by law (the scope of which has yet to be confirmed) and enterprises that voluntarily choose to disclose sustainability information. Enterprises must calculate their emissions in accordance with the mainland’s national carbon accounting standards, categorise and disclose their absolute GHG emissions during the reporting period, and convert different types of GHG emissions into tCO₂e. In general (with limited exception for Scope 3 emissions), enterprises must disclose the methodologies, activity data, emission factors, input values, and assumptions used in their calculation, as well as explain any changes and their impacts if such elements are revised.

There are currently no mandatory requirements to obtain independent assurance of any ESG disclosures. However, China has established a voluntary sustainability assurance framework. In particular, the Sustainability Information Assurance Standard No. 6101 – Basic Standard (Trial) sets out the general principles and requirements for assurance engagements over sustainability information. The standard is currently implemented on a voluntary basis.

In addition, the Sustainable Development Report Guidelines and the Basic Standard encourage disclosing entities to engage third-party institutions to provide assurance or audit for their GHG emissions and other disclosed data.

The Sustainable Development Report Guidelines stipulate that disclosed information should include the independence of the third-party institution, its relationship with the disclosing entity, its experience and qualifications, and the assurance or audit report. The content of the report should include, but is not limited to, the scope of assurance or audit, the standards used, main procedures, methods and limitations, opinions or conclusions, etc.

Many listed companies make reference to international standards (such as the GRI standards and ISO 26000) and/or local standards (such as the Guidelines on Sustainability Reporting for Chinese Enterprises (CASS-ESG 6.0), Guidance for Enterprise ESG Disclosure (T/CERDS 2-2022), and Reference ESG Indicator Framework for Listed Companies Controlled by Central State-owned Enterprises) in their ESG reports, even though they are not mandatory.

The International Platform on Sustainable Finance, which was jointly launched by economies including China and the EU, released the Common Ground Taxonomy (CGT). The CGT has been adopted by some financial institutions in China and the EU as a reference for determining whether projects satisfy the purpose of sustainable finance when issuing financial products, but it is not mandatory.

On 14 November 2024, China, the EU, and Singapore jointly released the Multi-jurisdiction Common Ground Taxonomy. Building on the original CGT, this new taxonomy aims to enhance the interoperability and alignment of sustainable finance standards across these jurisdictions.

The guidance on “green investment” and the Green Finance Endorsed Projects Catalogue mentioned in section C.2 below apply in the sustainable finance context.

Currently, China has incorporated IFRS S1 and IFRS S2 into its domestic disclosure framework through the Basic Standard and the Climate Standard, but has not yet adopted the TNFD framework.

As mentioned above, the national unified sustainability disclosure standards system will consist of the basic standards, specific standards, and application guidelines, and will be implemented in stages. They will initially apply to listed companies, with a gradual extension to non-listed companies and small and medium-sized enterprises.

The Basic Standard, the Climate Standard, and the Application Guidance have now been issued, and the authorities are expected to continue developing topic-specific standards and related implementation guidelines as part of the national sustainability disclosure framework. A nationally unified sustainability disclosure standards system is expected to be in place by 2030. A precise timeline for mandatory application has not yet been specified.

Given the long development cycle of the standards system, relevant authorities may, based on practical needs, initially formulate disclosure guidelines and regulatory rules for specific industries or sectors, to be gradually refined and improved in the future.

China has set clear decarbonisation targets and strategies. The white paper “China's Policies and Actions on Climate Change” published by the Chinese government details China's national strategies and actions in response to climate change. China committed to achieving carbon peak by 2030 and carbon neutrality by 2060, and has included the reduction of carbon emission intensity as a binding indicator in the national economic and social development plan. In its “15th Five-Year Plan,” it has set a target of reducing carbon dioxide emissions per unit of GDP by 17% during the 15th Five-Year Plan period.

In addition, China announced new NDCs, stipulating its 2035 NDC targets, under which China will, by 2035, reduce economy-wide net greenhouse gas emissions by 7% to 10% from peak levels, striving to do better. At the same time, China will further increase the share of non-fossil fuels in total energy consumption to over 30% and expand the installed capacity of wind and solar power to over six times the 2020 level, striving to bring the total to 3.6 billion kilowatts.

China is also accelerating the construction of its “1+N” policy system for carbon peak and carbon neutrality, formulating top-level design documents and implementation plans for various fields and industries, clarifying the timetable, roadmap and construction drawings, and comprehensively promoting work in each aspect of carbon peak and carbon neutrality.

Yes, there is a mandatory ETS, which mainly targets high-emission industries and enterprises. The Chinese government has launched a mandatory carbon emissions trading market (CET) and has established a corresponding regulatory framework. On 25 January 2024, the State Council of China promulgated the “Interim Regulations on the Administration of Carbon Emission Trading”, which is the first specialised regulation in China for combatting climate change and clarifying the market trading system for carbon emission rights. Currently, China's carbon emissions are mainly concentrated in eight key industries: power generation, steel, building materials, non-ferrous metals, petrochemicals, chemicals, papermaking, and aviation, which account for about 75% of the country’s total carbon dioxide emissions. In 2025, the national CET included 3,378 key emitting companies in the power, steel, cement and aluminium smelting sectors, accounting for around 60% of the total national carbon dioxide emissions.

China's CET is primarily based on free allocation by the MEE. The MEE utilises an industry-based benchmarking method, which is determined by the actual output of enterprises, to carry out the free allocation. The MEE outlines its benchmarking method in policy documents concerning the total volume and distribution of allowances. For instance, the free allocation for the power generation sector for 2023 and 2024 is determined in accordance with the National Carbon Emission Allowance Total and Allocation Plan for the Power Generation Industry in 2023 and 2024, while pre-allocation of 2025 allowances will take place by 30 June 2026. If the actual emissions of an enterprise are less than its allocated allowances, it can sell its surplus allowances on the CET. Conversely, if the actual emissions exceed the allocation, the enterprise needs to purchase allowances on the CET.

Pursuant to the Opinions on Promoting Green and Low-Carbon Transition and Strengthening the Development of the National Carbon Market, issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council in August 2025, it is anticipated that the national CET will further expand its coverage to include more industries as follows:

1. by 2027, the national carbon emissions trading market is expected to substantially cover the major emitting industries in the industrial sector. The market is also expected to be progressively extended to sectors such as chemicals, petrochemicals, civil aviation and papermaking; and
2. by 2030, China aims to essentially establish a national carbon emissions trading market based on total allowance control and a combination of free and paid allocation.

China has not yet introduced carbon taxes or mapped out legislative plans relating to carbon taxes (although there are certain types of taxes which are related to carbon reduction to some extent).

There are no mandatory requirements for companies to have transition plans, but certain disclosure requirements on transition planning apply to certain listed companies.

Shanghai- and Shenzhen-listed companies subject to the Sustainable Development Report Guidelines discussed in sections A.2(d) and (e) above should disclose their transition plans, measures, and progress in response to climate-related risks and opportunities, including, but not limited to, the following content:

1. the company's adjustments to current and future strategies, business models, and resource allocation in response to climate-related risks and opportunities;
2. the measures that the company has taken or plans to take to improve production processes and update equipment to directly or indirectly address climate-related risks and opportunities;
3. the transition plan formulated by the company to cope with climate-related risks and opportunities, and the basic assumptions relied upon in formulating such a plan;
4. the resources provided by the company for the implementation of the transition plan; and
5. the progress of the company in implementing the transition plan.

There are plans to require reporting entities, subject to the unified sustainability disclosure system, to disclose the targets they have set or which are mandated by national laws, regulations, or strategic plans, such as GHG emission objectives.

Shanghai- and Shenzhen-listed companies subject to the Sustainable Development Report Guidelines should disclose information relating to their GHG emission reduction practices, including participation in various emission reduction mechanisms, emission reduction targets, emission reduction measures (such as management measures, financial investments, technological developments etc.), and their effectiveness.

The disclosing entity should also disclose its registration and trading status within national voluntary GHG emission reduction projects and the China Certified Emission Reduction program (CCER), as well as its registration and trading of emission reductions (if any).

When the disclosing entity includes information in the sustainability report that requires estimations or predictions, such as financial impacts and GHG reduction targets, it should be based on reasonable assumptions and premises and provide adequate risk warnings for significant factors that may affect the accuracy of such estimations or predictions. If there are significant changes to the assumptions and premises upon which the estimations or predictions are based, they should be disclosed promptly.

The Climate Standard is currently voluntary with plans for mandatory application in the future. It requires a reporting entity to disclose the climate-related targets set out in its strategy for managing climate risks and opportunities or as mandated by national laws, regulations, or strategic plans, such as GHG emission objectives. For each target, the entity shall disclose its purpose, the methodology used, the scope of application, the time frame for achievement, the metric(s) used to measure progress, and the applicable reference or baseline. When setting and disclosing these targets, the reporting entity shall take due account of its industry type and prevailing industry practice, disclosing each target both qualitatively and quantitatively. Nevertheless, disclosure may be omitted if the information cannot reasonably be ascertained with the entity’s own resources or if it constitutes state secrets or commercially confidential information.

On 12 March 2026, the National People's Congress adopted the Ecological and Environmental Code of the PRC (the Ecological Environment Code), which took effect on 15 August 2026. The Ecological Environment Code formally establishes the EPR system and stipulates that the competent standardisation authority under the State Council, in conjunction with the relevant departments in charge of development and reform, ecology and environment, industry and information technology, and other relevant authorities, shall formulate circular economy standards covering green design, green manufacturing, comprehensive utilisation of industrial waste, and recycling of domestic waste. The specific standards have not yet been issued at this stage.

In terms of eco-design, the Ecological Environment Code encourages producers and operators to carry out green design and requires the design of products such as electrical and electronic products and motor vehicles to take into account their impact on human health and the ecological environment throughout their lifecycle. In addition, the Ministry of Industry and Information Technology has issued a guidance document, the Green Design Guide for Industrial Products (2026 Edition), which identifies 11 priority green design directions and provides practical implementation guidance closely tailored to 15 industries, including wind power equipment, photovoltaics, automobiles, construction machinery, and lithium batteries, with numerous illustrative examples of green design solutions, such as long-life design, energy-efficient design, and recyclability-enhancing design for wind power equipment.

China has also introduced a sector-specific EPR regime for new energy vehicle (NEV) power batteries, effective from 1 April 2026. Power battery manufacturers and NEV manufacturers are required to establish recycling networks, fulfil take-back obligations, implement battery traceability and information reporting, and ensure proper recycling through qualified recycling enterprises.

Currently, China has not enacted mandatory human rights and/or environmental due diligence laws for businesses in China. However, the National Public Service Platform for Standards Information has published the drafting plan for the Implementation Guide for Due Diligence in Green Supply Chain Management of Manufacturing Enterprises (20256042-T-469), which provides voluntary guidance for manufacturing enterprises to build, implement, maintain, and improve green supply chain management.

In June 2025, the People's Bank of China, together with the National Financial Regulatory Administration and the China Securities Regulatory Commission, issued the Green Finance Endorsed Project Catalogue (2025 Edition). In addition, the transition finance standards developed under the leadership of the People's Bank of China for four sectors – steel, coal‑fired power, building materials, and agriculture – have been piloted in more than 20 provinces and municipalities. Hebei Province has also formulated a dedicated transition catalogue focusing specifically on the steel industry.

The People's Bank of China has successively introduced monetary policy instruments to support the development of green finance, including green loans and green bonds in the People's Bank of China's eligible collateral pool and launching the Carbon Emission Reduction Facility (CERF). The CERF is a key structural monetary policy instrument used by the People's Bank of China to guide financial institutions towards carbon-reduction projects. In January 2026, the People's Bank of China further expanded the support scope of the CERF to include projects with direct carbon emission reduction effects, such as energy-saving retrofitting, green upgrading, and the transition to green and low-carbon energy, thereby guiding banks to support the comprehensive green transition. According to the China Monetary Policy Report (Q1 2026) published by the People's Bank of China, by the end of the first quarter of 2026, the outstanding balance of green loans reached RMB 48.1 trillion, representing a year-on-year increase of 17.6%.

Furthermore, several regions have rolled out fiscal incentives for green and transition finance.  Shanghai, for example, intends to offer subsidies for costs associated with green lending, green bonds, and green leasing.

Blended (public-private) finance in China is still at an early stage, but the Shandong Green Development Fund provides a useful example. The Fund is a blended-finance initiative supported by multilateral and development finance institutions and local governments, with the objective of supporting climate change mitigation and adaptation projects within Shandong Province, including renewable energy, energy efficiency improvement, ecological restoration, and green and low-carbon infrastructure development. The Shandong Fund has set initial project targets included reducing emissions by 2.5 million tCO₂e annually by 2027 and improving climate resilience for at least 2 million people.

The government is introducing policies to encourage and guide enterprises in low-carbon transition, including carbon reduction target responsibility systems and low-carbon city construction plans, etc.

The Ecological Environment Code, which took effect on 15 August 2026, established a unified legal framework governing climate, biodiversity and resource use. It consolidates and updates various existing environmental laws and regulations into a unified legal framework, as well as establishes a standalone section on green and low-carbon development. This section primarily sets out the direction for future regulations covering the three major areas of (a) circular economy development, (b) energy conservation and green and low-carbon transition and (c) climate change response. Certain special laws (e.g. the Forestry Law) remain in effect.

The government continues to develop and introduce regulations on carbon emissions, including developing carbon trading markets. The national ETS has expanded from the power sector to the steel, cement and aluminium smelting sectors, and is expected to continue expanding to other major emitting industries. China is also continuing to improve the voluntary emission reduction trading market. Positive progress has been made - the MEE has officially released two batches of CCER project methodologies and is promoting a carbon emission verification and reporting system. Further detailed disclosure requirements on carbon emissions and relevant transition planning might be considered in the future.

The government is also advancing green supply chain management and biodiversity finance. On 31 October 2025, the National Public Service Platform for Standards Information published the drafting plan for the Implementation Guide for Due Diligence in Green Supply Chain Management of Manufacturing Enterprises (20256042-T-469), with a view to further promoting green supply chain management. In addition, the People's Bank of China has launched the Biodiversity Finance Catalogue (Trial) in 2025 to improve financing mechanisms for biodiversity conservation and sustainable use and direct more financial resources to these areas.

Sustainability-related statements, marketing claims and disclosures shall be based on facts without misleading statements. There have been no significant examples of proceedings or regulatory actions, but some enterprises were held to have misused “green” information in their advertisements or assisted others in providing false green information, which were considered violations of relevant laws and regulations.

For example, we have observed some cases in which the authenticity and accuracy of some environment-related corporate statements and claims during marketing and sales activities have raised concerns or have been questioned by local regulatory authorities across China. For example, some imported products with inappropriate carbon neutrality labels or statements have been required by the market supervision administration of local governments to be removed from shelves due to violation of relevant provisions of the Advertising Law of the PRC.

In 2024, the Supreme People's Court of China held that an environmental inspection company, as a legal entity possessing valid environmental inspection and testing qualifications, deliberately issued a significant number of false monitoring reports. The company condoned fraudulent practices within its departments, including non-compliance with sampling standards, fabrication of data and records, and explicitly instructed or tacitly consented to the issuance of false monitoring reports. These actions constituted the offence of providing false certification documents under criminal law. Six senior management personnel and directly responsible individuals from the company were sentenced to fixed-term imprisonment, ranging from nine months to one year and two months. Furthermore, they were prohibited from engaging in environmental monitoring and related professions for three years following the completion of their sentences.

The State Administration for Market Regulation and Standardization Administration of the People's Republic of China issued the national standard Terminology for Green Finance (GB/T 45490-2025) on 28 March 2025, which includes a definition of greenwashing: “Economic entities engaging in misleading practices or disseminating false information, thereby exaggerating or making unfounded claims regarding the environmental friendliness of their products, services, policies, and objectives.” There are also some regulations which could be regarded as relating to risk management of greenwashing.

Some relevant guidance on “green investment” exists in the finance industry. For example:

1. the Green Investment Guidelines (For Trial Implementation) issued by the Asset Management Association of China. The guidelines deal with how to make green investments and define the scope of green investments, which should include, but is not limited to, the enhancement of energy efficiency, emission reduction, clean and renewable energies, environmental protection and restoration, and recycle economy, with a focus on environmental protection, low-carbon development and recycling, etc.; and
2. the Green Finance Endorsed Project Catalogue (2025 Edition) jointly issued by the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission (CSRC), which came into effect on 1 October 2025, and sets out projects that can be funded by green financial products.

In addition, the Interim Regulations on the Administration of Carbon Emission Trading (effective from 1 May 2024), which regulate carbon emissions trading in the PRC, specify that key GHG emitting entities shall be responsible for the authenticity of their emission data and bear liability arising from their non-compliance.

Likely grounds include:

1. criminal liabilities arising from the issuance of fraudulent certification documents (constituting criminal offences), including the generation of misleading environmental monitoring reports through the fabrication of inaccurate or deceptive data;
2. disclosure liabilities under securities laws and regulations, e.g. providing materially false or misleading information in listing documents or other corporate disclosure documents, such as ESG reports or SR reports;
3. claims in tort/contract for misrepresentation; and
4. violation of the Advertising Law, the Anti-Unfair Competition Law and/or the Law on the Protection of Consumer Rights and Interests, e.g. deceiving consumers that the products are carbon neutral through misleading commercial advertisements.

Although there have been no major greenwashing claims in the mainland of China to date, the risks of greenwashing liabilities are expected to increase as sustainability reporting requirements become more robust and the sense of urgency on sustainability continues to grow.

In particular, the Administrative Measures for Information Disclosure of Listed Companies were  revised in 2025, mandating certain companies listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange to disclose annual sustainability reports from 2026, in accordance with the standards of the Self-regulatory Guidelines of the Shenzhen Stock Exchange for Listed Companies No. 17 - Sustainable Development Report (Trial) and the Self-regulatory Guidelines of the Shanghai Stock Exchange for Listed Companies No. 14 - Sustainable Development Report (Trial) (as outlined in sections A.2(d) and (e) above). The CSRC will carry out substantive reviews of sustainability reports to ensure that the information contained therein is accurate, complete, reliable, presented in a concise and clear manner, and comprehensible to stakeholders. Additionally, the reports must be free from false information, misleading statements, or material omissions. If the information disclosed in the reports includes false records, misleading statements, or material omissions, then the listed company, its responsible officers and other directly liable individuals, as well as its controlling shareholders and ultimate controllers, may all be subject to substantial fines of up to RMB10 million.

It is worth closely observing how the CSRC will practically implement the review of sustainability reports issued by listed companies in the future.

The Supreme People's Court's Opinions on Providing Judicial Services for Actively and Steadily Promoting Carbon Neutrality stresses that the courts shall address cases involving disputes over the reporting of GHG emissions in accordance with the law. Where key GHG emitting entities refuse to fulfil their GHG emissions reporting obligations, fabricate, conceal, or omit GHG emission data, the courts shall support administrative authorities in imposing administrative penalties in accordance with the law. If technical service agencies and key GHG emitting entities maliciously collude to fabricate, conceal, or omit GHG emission data, causing damage to others, victims may claim compensation for infringement damages. It may also constitute a criminal offence in accordance with the Interpretation by the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Environmental Pollution and the Criminal Law of the PRC.