Application of ISSB standards in China
IFRS releases a report on the application of ISSB standards in China, aiming to summarize the development of China’s sustainable disclosure regulatory policies and standards.
IFRS analyzes the application of ISSB standards in 33 jurisdictions worldwide and categorizes these jurisdictions into two types based on the application stage (developed sustainable disclosure methods and developing disclosure methods).
Related Post: Application of ISSB Standards in Global Jurisdictions in 2024
Supervision of ISSB Standards in China
The Ministry of Finance of China, along with nine other departments, has established an interdepartmental working group aimed at developing China’s sustainable development information disclosure standard system based on IFRS S1 and IFRS S2. The system is divided into three parts, namely Basic Standard, Specific Standard, and Application Guidance. In November 2024, China released basic standards to provide overall requirements for sustainable information disclosure of enterprises. In April 2025, China released the first draft of the Corporate Sustainability Information Disclosure Guidelines for Climate Change, planning to collect feedback from stakeholders and determine climate related information disclosure standards.
China plans to release basic standards, climate related information disclosure standards, and application guidelines before 2027, and establish a sustainable development information disclosure standard system by 2030. At present, both the Shanghai Stock Exchange and the Shenzhen Stock Exchange have issued sustainable disclosure guidelines, requiring listed companies to disclose substantive sustainable information such as climate information.
Development of ISSB Standards in China
China has issued the Basic Guidelines for Enterprise Sustainable Development Disclosure (Trial) and the No.1 Climate (Trial, Exposure Draft) for Enterprise Sustainable Development Information Disclosure. These two guidelines are currently voluntarily applied by enterprises and will be prioritized for listed companies and large enterprises in the future, gradually expanding to non-listed companies and small and medium-sized enterprises. The guidelines consider that users of sustainable development information include investors, lenders, governments, and other stakeholders, and information disclosure needs to meet the needs of users.
In terms of materiality requirements, the basic principles are consistent with the material requirements of IFRS S1, focusing on information that is useful for decision-making by existing and potential information users. Enterprises need to disclose sustainability related risks, opportunities, and impacts at the same time as the release of financial statements. The basic guidelines do not provide exemption clauses for specific enterprises, nor do they require enterprises to seek third-party verification for their sustainable disclosure. However, the basic principles allow some departments to develop sustainable disclosure guidelines for specific industries, and to specify in detail the format or standards for information disclosure in the application guidelines.
Reference:
IFRS Foundation Publishes Jurisdictional Profiles of ISSB Standards
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