China Stock Exchanges announce mandatory sustainability reporting requirements for companies
China's three major stock markets, the Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange (SZSE), and Beijing Stock Exchange (BSE), have announced the introduction of new sustainability reporting guidelines for listed companies. This move includes a mandate for hundreds of larger cap and dual-listed issuers to commence mandatory disclosure on a wide array of Environmental, Social, and Governance (ESG) topics beginning in 2026.
The unveiling of these guidelines places China alongside other leading markets globally in the adoption of enhanced sustainability reporting standards. Notable initiatives include the European Union's recently launched Corporate Sustainable Reporting Directive (CSRD), forthcoming climate disclosure rules from the U.S. Securities and Exchange Commission (SEC), and similar efforts in jurisdictions such as Australia, Brazil, Singapore, and the UK.
Outlined within the newly released guidelines are reporting requirements that span four core content areas: governance, strategy, impact, risk and opportunity management, and indicators and goals. Significantly, these topics reflect a "double materiality" approach, emphasizing the importance of reporting on both the risks and impacts of sustainability issues on enterprises, as well as their influence on the environment and society.
The exchanges assert that the inclusion of these core content topics is aimed at providing investors and stakeholders with comprehensive insights into listed companies' endeavors to address and manage sustainable development challenges.
