Reviewing Corporate ESG Disclosure Guidelines

By Li Yipu and Yue Yi, Han Kun Law Offices

ESG is the mainstream international corporate evaluation system, standard and framework in the areas of environmental, social and governance (ESG) performances. Over the years, it has become intrinsic to companies’ pursuit of sustainable development. While the ESG ecosystem is composed of multiple layers of ESG-related disclosure, evaluation, regulation and investment decision-making, the disclosure standards are at its very foundation.

Li Yipu, Han Kun Law Offices
Li Yipu
Han Kun Law Offices
Tel: +86 10 8516 4128

Since the late 20th century, many international organisations have released their ESG disclosure standards, which have been adopted by companies at an increasing rate. With China’s aim to better integrate into the global economy, participate in the formulation of international governance rules, and strengthen its discourse on the global stage, there is an urgent need to develop a set of corporate ESG disclosure standards that incorporate Chinese characteristics and international paradigms.

In this context, on 16 April 2022, the China Enterprise Reform and Development Society (CERDS) issued the Corporate ESG Disclosure Guidelines, the first of its kind in China. The guidelines, effective from 1 June 2022, were based on relevant laws and regulations while taking into account national and business realities. They set out ESG disclosure standards for companies of various types, sizes and industries, and serve as an important reference for companies required to make ESG disclosures.


The main text section of the guidelines is largely dedicated to the disclosure principle, the disclosure indicator system, disclosure requirements and their application, liability and oversight.

The disclosure principle requires corporate ESG disclosure to be substantial, truthful, accurate, complete and consistent, so that stakeholders can make value judgements and decisions accordingly. The disclosure requirements and their application, liability and oversight mostly cover principles pursuant to which companies make periodic disclosures in the form of ESG reports. They should be liable for the truthfulness, accuracy and completeness of such ESG reports, as well as accept third-party scrutiny of the reports.

Yue Yi, Han Kun Law Offices
Yue Yi
Han Kun Law Offices
Tel: +86 10 8516 4185

The disclosure indicator system, as the core of the guidelines, divides the indicators into four levels: three at level one; 10 at level two; 35 at level three; and 118 at level four. In particular: level 1 indicators include the three major areas of environmental, social and governance; level 2 and level 3 indicators are based on ESG-related theories, laws, regulations and standards; and level 4 indicators concern the actual measurements and assessment methods compatible with
level 3 indicators.

In its appendix, the guidelines elaborated on the four levels of indicators, including their nature (qualitative and/or quantitative) and descriptions, in table form, which further improves the operability of the guidelines. The disclosure indicator system, as set out by the guidelines, boasts a comprehensive framework that integrates various ESG information disclosure requirements in China and reflects the key concerns of leading international ESG rating agencies, covering essentially all substantive topics in the corporate ESG field.


The guidelines, being association standards, are not legally binding. However, considering that the CERDS is an association directly supervised by the State-owned Assets Supervision and Administration Commission of the State Council, with member corporations covering a wide range of industries and regions, the significance of the guidelines should therefore not be underestimated.

Being the first set of comprehensive voluntary disclosure standards in China, the guidelines bridge a gap in the area of full-calibre ESG disclosure, and serve as a common basis of reference for both self and third-party evaluation. Since the guidelines, the CERDS has followed up with the Corporate ESG Evaluation System and the Guidelines on the Preparation of Corporate ESG Reports. These documents respectively address the issues of content of disclosure, quality of disclosure, and standardised presentation of disclosure, together forming the fundamental ESG association standards. Many listed companies, such as GAD Environmental and Huagong Tech, have prepared and issued annual social responsibility reports or ESG reports by referring to the guidelines. It is noteworthy that although the guidelines were formulated based on relevant laws, regulations and standards, companies should nevertheless closely monitor the development of relevant requirements when preparing an ESG report, as new applicable rules and standards continue to be introduced.

For example, local financial regulators in Shenzhen and central regulators based in the area have jointly issued guidelines, on 26 September 2022, which specifically cover the environmental information disclosure of financial institutions in Shenzhen. And the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 3 Disclosure of Industry Information (revised 2023), issued on 10 February 2023 with immediate effect, provides that listed companies in certain industries should timely disclose any major environmental pollution incidents and make continual disclosures on follow-up treatment, a topic not covered by the guidelines.

The guidelines reflect and push the policy directions and trends of corporate strategic transformation towards green and low-carbon operations, and quality-oriented development. As legal documents, self-regulatory rules and standards on ESG disclosure continue to emerge and be updated in different regulatory areas and industries, companies should keep refining their ESG development in a manner consistent with their own position and needs, as well as with the latest ESG disclosure standards.

Li Yipu is a partner at Han Kun Law Offices. She can be contacted by phone at +86 10 8516 4128 or by e-mail at
Yue Yi is an associate at Han Kun Law Offices. She can be contacted by phone at +86 10 8516 4185 or by e-mail at