China’s major stock markets, including the Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange (SZSE), and Beijing Stock Exchange (BSE), have introduced fresh sustainability reporting guidelines for listed companies.
The move is set to necessitate hundreds of larger cap and dual-listed issuers to initiate mandatory disclosure on a wide spectrum of Environmental, Social, and Governance (ESG) topics by 2026, according to ESG Today.
The publication of these guidelines aligns China with other global markets in the adoption of new sustainability reporting standards.
This move echoes the European Union’s recently introduced Corporate Sustainable Reporting Directive (CSRD), the forthcoming climate disclosure regulations by the U.S. Securities and Exchange Commission (SEC), and similar initiatives in Australia, Brazil, Singapore, and the UK.
Outlined by the Chinese exchanges, reporting obligations will cover four “core content” areas, encompassing governance, strategy, impact, risk and opportunity management, along with indicators and goals.
This approach reflects a “double materiality” perspective towards sustainability reporting, emphasising the dual aspects of reporting on both the risks and impact of sustainability issues on enterprises, as well as their impacts on the environment and society.
The core content topics outlined in the guidelines aim to provide investors and stakeholders with comprehensive insights into listed companies’ efforts towards sustainable development.
Moreover, the guidelines specify reporting requirements across various environmental, social, and governance categories, such as climate change, ecosystem and biodiversity protection, circular economy, energy use, supply chain security, rural revitalisation, anti-corruption, and anti-bribery, among others.
Notably, the rules encompass reporting on Scope 3 value chain greenhouse gas emissions, a point of contention for the SEC as it finalises its climate rule.
The mandatory reporting requirements will be applicable to larger companies, including those listed on flagship indices like the Shenzhen 100, SSE 180, and Shanghai Science and Technology Innovation 50, as well as dual-listed entities with securities on both domestic and foreign markets.
This coverage extends to over 450 companies, representing approximately half of the listed market value. Conversely, the Beijing exchange, primarily hosting small and medium enterprises, will adopt the guidelines on a voluntary basis.
For companies subject to mandatory requirements, reporting is scheduled to commence in 2026, covering the 2025 reporting period.
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