China - CSRC & MEE (China Securities Regulatory Commission & Ministry of Ecology and Environment)
- Countries: China
- Function: Mandatory environmental disclosure for listed companies and polluting industries; alignment with global standards growing
China’s approach to sustainability disclosure is undergoing rapid evolution, driven by regulatory mandates, strategic economic goals, and growing pressure to align with international sustainability frameworks. While historically fragmented and primarily voluntary, China’s environmental disclosure system is now transitioning toward mandatory, standardized requirements coordinated between the China Securities Regulatory Commission (CSRC) and the Ministry of Ecology and Environment (MEE).
The CSRC oversees corporate disclosure requirements for publicly listed companies, integrating environmental risk disclosure into the broader regulatory framework governing securities markets. In 2021, the CSRC revised its Guidelines for Investor Relations Management and Corporate Governance Guidelines, recommending that companies disclose ESG information where relevant to investor decision-making. Recent developments have pushed these recommendations into increasingly mandatory expectations.
In 2022, the CSRC launched a new ESG disclosure pilot program across select exchanges, including the Shanghai and Shenzhen stock exchanges, requiring companies in sectors such as energy, manufacturing, mining, and real estate to disclose standardized ESG information. This pilot laid the groundwork for broader adoption, with draft national ESG disclosure guidelines published for public consultation in 2023. Finalization and phased rollout are anticipated between 2025 and 2026, moving ESG disclosure for listed companies toward full normalization.
The MEE focuses on environmental disclosures at the operational level, particularly targeting high-polluting and high-emission industries.
Under the Measures for the Administration of Legal Disclosure of Enterprise Environmental Information (effective 2022), firms identified as key pollution-discharging entities must disclose detailed environmental information, including:
- Pollution discharge quantities
- Compliance with environmental regulations
- Environmental penalties and corrective actions
- Resource utilization efficiency and carbon emissions data
Disclosure through the MEE’s national environmental information platform is mandatory for thousands of firms across industrial sectors, and non-compliance is subject to administrative penalties.
Key characteristics of China’s emerging sustainability disclosure system include:
- Sectoral prioritization: Early disclosure mandates focus on heavy industry, energy, and resource-intensive sectors where environmental risk exposure is highest.
- Alignment with international standards: Although China’s system historically diverged from global ESG frameworks, the CSRC has signaled a commitment to aligning disclosure practices with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and the International Sustainability Standards Board (ISSB) standards. Draft guidelines increasingly reference climate risk governance, Scope 1 and Scope 2 emissions, and transition plan disclosures.
- Integration with national policy goals: Sustainability disclosure supports strategic priorities outlined in China’s 14th Five-Year Plan, its 2060 carbon neutrality target, and the Green Finance Strategy, embedding environmental accountability within broader economic and industrial transformation agendas.
China’s approach differs from Western models in several respects. Disclosure is closely tied to state-led industrial policy, with sustainability reporting serving both regulatory and national development functions. Furthermore, the emphasis on environmental disclosure, particularly pollution and resource use, reflects China’s immediate environmental governance challenges rather than the broader social impact frameworks emphasized in European ESG models.
Despite rapid progress, challenges remain. ESG data quality and assurance processes are still under development, and disclosure practices vary significantly across sectors and company sizes. However, momentum is accelerating, particularly among large state-owned enterprises (SOEs) and companies seeking dual listings in Hong Kong, where ESG disclosure standards are already higher.
As of 2025, China’s sustainability disclosure system is moving steadily toward broader mandatory ESG reporting, with growing interoperability with international frameworks. This shift reflects not only global market integration goals but also internal recognition that transparent environmental risk management is critical for long-term financial system stability and national ecological security.