China - Stock Exchange ESG Reporting Guidelines for Listed Companies (Trial)
Date of Adoption: 1 May 2024
In April 2024, three China stock exchanges - the Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange (SZSE) and Beijing Stock Exchange (BSE) - introduced their first guidelines on corporate sustainability reporting (Trial), effective from 1 May, 2024. The guidelines are generally aligned in their requirements, covering a broad range of sustainability topics and considering both matters that are financially material to the company, and the material impacts of the company.
Date of Enforcement: 30 Apr 2026
Companies included in the SSE 180 Index, STAR 50 Index, the Shenzhen 100 Index and ChiNext Index, as well as dual-listed companies are required to prepare and publicly disclose their sustainability reports covering the calendar year 2025 by 30 April 2026.
Objective:
The guidelines aim to standardize the sustainability reports already published by many listed companies in China and to assist them in establishing comprehensive governance mechanisms and higher-quality disclosures.
Double Materiality Assessment:
The guidelines set out 21 topics against which companies are required to benchmark their own business operations. Specifically, companies should carry out a double materiality assessment to determine which topics they must report about, i.e., whether and how the relevant sustainability risks and opportunities, represented by each covered topic, will significantly impact its financial performance ('Financial Materiality'); and whether and how the actions of the company in relation to a topic will have an impact on people, supply chain and the society ('Impact Materiality').
If a company determines that any covered topic does not have Financial Materiality or Impact Materiality in light of its own business operation, the company may make appropriate adjustments to the disclosure content and provide reasons in the report.
A company can also make additional disclosure if it determines that out-of-scope topics would be more relevant when assessing Financial Materiality and Impact Materiality.
This new EU legislation replaces the EU’s Non-Financial Reporting Directive (NFRD). It requires companies to report through the European Sustainability Reporting Standards (ESRS) annually, with electronically readable and searchable reports.
The Directive will apply (timeline amended by EU Omnibus in Feb 2026):
- 1 January 2027: to EU entities within Companies in Scope
- 1 January 2028: to non-EU entities within Companies in Scope
The PSCI is not a certification or compliance body but it offers tools to members that can used as part of your company’s due diligence processes.
Please note that this summary was drafted by the PSCI Secretariat. PSCI members and suppliers are advised to read the legislation in its entirety.
- Shanghai Stock Exchange (SSE) announcement (Chinese)
- Beijing Stock Exchange (BSE) announcement (Chinese)
- Shenzhen Stock Exchange (SZSE) announcement (Chinese)
- China’s stock exchanges release for public consultation mandatory sustainability reporting requirements for listed companies (linklaters.com)
- China's stock exchanges release guidelines on corporate sustainability disclosure (news.cn)
- Focus on the Sustainability Reporting Guidelines for Listed Companies in China (Deloitte China)
- China Stock Exchanges Issue ESG Reporting Guidelines for Listed Companies (china-briefing.com)
- Guidelines on Self-Regulation of Listed Companies – Sustainability Report (Trial) of the People's Republic of China (pwc.com)
Legislative Provisions
The following legislative provisions are included:
Chapter 5: Governance Information Disclosure Related to Sustainable Development
Section 2: Business Behaviours
Article 55: Anti-bribery & corruption
- Disclosing entities should provide details of its anti-commercial bribery and anti-corruption efforts during the reporting period, including but not limited to the following:
- The establishment and operation of an anti-commercial bribery and anti-corruption risk management system, including whether a whistleblower protection policy has been established.
- The assessment of risks related to commercial bribery and corruption.
- The total number and percentage of directors, management personnel, and employees who received anti-commercial bribery and anti-corruption training.
- Details of commercial bribery and corruption incidents that occurred during the reporting period, including cases where directors, management personnel, or employees were dismissed or disciplined due to commercial bribery or corruption, were investigated by authorities, had contracts with business partners terminated or not renewed, and the specifics of any lawsuits related to commercial bribery or corruption involving the company or its directors, management personnel, or employees (if any).
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
All forms of corruption, including bribery, extortion and embezzlement, are prohibited. Suppliers shall not pay or accept bribes, or participate in other corrupt inducements in business or government relationships, or through the use of intermediaries to secure an unfair advantage. Suppliers shall ensure they have adequate systems in place to prevent corruption and comply with applicable laws.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Ethics Section
- Question 15: Does the facility or company have formal ethics policies, Codes of Conduct, tools or processes that govern company and employee business practices?
- Is anti-bribery and corruption included?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 3: Suppliers & Clients
Article 48: Data Security and Client Privacy
- Disclosing entities should provide information on data security and customer privacy protection during the reporting period, including but not limited to the following:
(1) The establishment and operation of the data security management system, specific measures implemented, and any certifications obtained (if applicable).
(2) Details of data security incidents that occurred during the reporting period, including the impact, the amounts involved, and any response measures taken along with their progress (if applicable).
(3) The establishment and operation of the customer privacy protection system.
(4) Details of any incidents involving the leakage of customer privacy during the reporting period, including the impact, the amounts involved, and any response measures taken along with their progress (if applicable).
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall safeguard and make only proper use of confidential information to ensure that company, worker, patient, subject and donor privacy rights are protected. Suppliers shall comply with applicable privacy and data protection laws and ensure the protection, security and lawful use of personal data.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Ethics Section
- Question 16: Does the facility or company ensure confidentiality and privacy of information concerning companies, individuals, workers, patient rights and intellectual property?
- Data Privacy?
- GDPR?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 5: Governance Information Disclosure Related to Sustainable Development
Section 2: Business Behaviours
Article 56: Fair Competition
- Disclosing entities should provide details of its efforts against unfair competition during the reporting period, including but not limited to the following:
- The establishment and operation of a management system to prevent unfair competition practices (such as false advertising, monopolistic behavior, infringement of trade secrets, etc.) and the specific measures implemented.
- If the company was involved in litigation or received significant administrative penalties due to unfair competition practices during the reporting period, it should disclose the details of the litigation, the amounts involved, the administrative penalties received, and the corrective actions taken.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall conduct their business consistent with fair and vigorous competition and in compliance with all applicable anti-trust laws. Suppliers shall employ fair business practices including accurate and truthful advertising.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Ethics Section
- Question 15: Does the facility or company have formal ethics policies or Codes of Conduct that govern company and employee business practices?
- Is fair competition included?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 3: Suppliers & Clients
Article 47: Product Safety and Quality Control
- Disclosing entities should provide basic information on the safety and quality management of products and services during the reporting period, including but not limited to the following:
- The establishment and implementation of product and service quality management systems and procedures, as well as specific measures taken.
- Certifications related to quality management obtained by the company, and certifications of the quality management systems for major products and services.
- Major safety and quality-related incidents involving products and services during the reporting period, including the nature of the incidents (such as administrative penalties), the impact and amount of damages involved, and the response measures taken and their progress (if any).
- The establishment and implementation of after-sales service and product recall systems, including the channels for handling customer complaints, the processing procedures, and the outcomes.
The exchange encourages disclosing entities in industries such as finance, healthcare, power, telecommunications, and public utilities to disclose information related to the availability of products and services during the reporting period (e.g., inclusive finance, inclusive healthcare, etc.).
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall ensure that management and security systems protect products, components and ingredients from the risks of adulteration, falsification, or theft for the purpose of illegal resale.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems Section
- Question 2: Does the company have the required legal licences/permits for its operations, such as a valid business licence?
- Provide details of licence/permit number(s), expiry date(s) and validity.
- Question 8: Does the supplier have Business Continuity Management program in place to minimize the impact of potential business disruptions?
- Are notification procedures/processes in place to inform key stakeholders when a crisis event occurs and a business continuity plan activated?
- Question 9: Does the facility have security systems for controlling physical access to the facilities and are products sufficiently protected against unauthorised access?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 50: Overall situation of employees
- Disclosing entities shall disclose the overall situation of employees during the reporting period, including but not limited to the following aspects: [...] Policies and implementation status related to employee hiring and treatment, [...] the compliance, fairness, and transparency of recruitment and hiring procedures.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall provide a work environment free of harassment, harsh and inhumane treatment, including any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion or verbal abuse of workers and no threat of any such treatment.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights section:
-
Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Non-harassment)
-
Question 23: How does the facility or company ensure that there is no harassment [...] based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is a corresponding policy in place?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 50: Overall situation of employees
- Disclosing entities shall disclose the overall situation of employees during the reporting period, including but not limited to the following aspects: [...] labor disputes within the company [...]
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Open communication and direct engagement with workers (i.e. social dialogue) to resolve workplace and compensation issues are encouraged. Suppliers shall respect the rights of workers, as set forth in local laws, to associate freely, join or not join labor unions, seek representation and join workers’ councils, as well as to bargain collectively. Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining. Workers shall be able to communicate openly with management regarding working conditions without fear of retaliation.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section:
-
Question 31: What are the mechanisms in place to allow employees and management to collectively express concerns and issues?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 50: Overall situation of employees
- Disclosing entities shall disclose the overall situation of employees during the reporting period, including but not limited to the following aspects: [...] Policies and implementation status related to employee hiring and treatment, [...] the composition of on-duty employees by gender, age, etc. at the end of the period, [...] protection of the rights and interests of flexible employees, and the compliance, fairness, and transparency of recruitment and hiring procedures.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall strive for equality, providing a work environment free from discrimination for reasons such as race, color, age, pregnancy, gender, sexual orientation, ethnicity, disability, religion, political affiliation, union membership or marital status.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section:
-
Question 17: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? (including for Non-discrimination)
-
Question 25: How does the facility or company ensure that there is no harassment and discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is the corresponding policy in place?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 49: Employee Rights
- Disclosing entities must lawfully protect the legitimate rights and interests of employees, [...] promptly pay employee wages, contribute to their social security, [...].
Article 50: Overall situation of employees
- Disclosing entities shall disclose the overall situation of employees during the reporting period, including but not limited to the following aspects: [...] Policies and implementation status related to employee hiring and treatment, [...] the payment of employee wages and social security contributions, [...].
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall pay workers according to applicable wage laws and agreed employment contracts, including minimum wages, overtime hours and mandated benefits. Suppliers shall communicate with the worker the basis on which they are being compensated in a timely manner. Overtime work shall be voluntary, as well as consistent with applicable national and international standards. Suppliers are expected to communicate with the worker whether overtime is required and the wages to be paid for such overtime.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems Section
- Question 10: Does the facility or company maintain documentation for the following: [...]
- Injury and Illness Logs and relevant incident investigations
- Worker Benefits and Pay Information
Human Rights Section
- Question 18: Does the facility or company have a policy(ies) (or statement of commitment) regarding human rights and labor practices? If so, please indicate which of the listed topics are covered: [...]
- Wages, benefits, and working hours
- Question 30: Are workers paid in a timely manner in line with local law and regulations?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 50: Overall situation of employees
- Disclosure entities shall disclose the overall situation of employees during the reporting period, including but not limited to the following aspects:
(2) Occupational health and safety, including but not limited to the identification and assessment of occupational safety risks and sources, the establishment and implementation of the occupational health and safety management system, the acquisition of relevant certifications, related training, the amount invested in work injury insurance and safety production liability insurance, and the coverage rate of these insurances, as well as details of any safety incidents that occurred during the reporting period (if any).
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall protect workers from over exposure to chemical, biological, physical hazards. Appropriate equipment, facilities and services shall be provided to support worker safety, health, and wellbeing.
Adequate risk assessments and emergency plans shall be in place to ensure the safety of the work environment. Safety information relating to hazardous materials – including pharmaceutical compounds and pharmaceutical intermediate materials – shall be available and used to educate, train, and protect workers from hazards. Suppliers shall demonstrate good housekeeping practice and a culture of safety.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Health and Safety Section
- Question 55: Does the site consult and involve employees on Safety & Health issues through Unions, Worker Committees or any other worker voice mechanisms?
- Question 56: Does the facility provide HSE training to employees (incl. full-time, temporary, intern/summer students or contractor/sub-contractors)?
- How does it identify the training needs related to HSE (please provide details of the training program)?
- Question 58: Does the site have a program for improving safe behaviors?
e.g. leadership and commitment training, open communication, feedback, Behavior Based Safety program. - Question 59: Are appropriate hygiene practices observed and does the facility ensure the provision of safe, potable drinking water and hygienic facilities to all employees?
- Question 61: Is living accommodation provided to employees or contractors (e.g. dormitories)?
- Are they safe and clean, and do they meet the relevant basic requirements?
- Who has responsibility for maintenance and general HSE?
- Is it ensured that housing for workers and families is not in the vicinity of production areas or with uncontrolled access to operational facility?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 3: Resource Utilisation and Circular Economy
Article 37: Disclosure of Circular Economy Information
- Disclosing entities shall disclose specific information regarding their circular economy practices during the reporting period, including but not limited to the following:
- Specific goals and plans for achieving a circular economy: This includes the company’s detailed objectives and strategies for implementing a circular economy.
- Specific measures implemented to achieve a circular economy during the reporting period: This includes but is not limited to resource conservation, improving resource utilization, using renewable resources, preventing and reducing waste generation, and recycling and reusing waste.
- Specific progress and achievements in achieving the circular economy goals during the reporting period: This includes, but is not limited to, the recycling and comprehensive utilization of waste (including the amount of waste recycled), the consumption of renewable resources, and the proportion of renewable resources consumed relative to the total consumption of corresponding resources.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall strive for circularity, designing out waste, taking measures to improve efficiency and reduce the consumption of resources, including water, favoring renewable and sustainable sources. They shall also take measures to reuse and recycle.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section
- Question 35: Does the facility have written environmental policy, procedures, and practices?
- Question 36: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets?
- Do you track and/or have a reduction program in place for energy consumption?
- Do you track and/or have a reduction program in place for water consumption?
- Do you track and/or have a reduction program in place for hazardous waste?
- Do you track and/or have a reduction program in place for non-hazardous waste?
- Does your company/facility publicly report data?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 1: Addressing Climate Change
Article 20: Green and Low-Carbon Development
- Disclosing entities shall actively promote green and low-carbon development through process improvement, equipment upgrades, energy optimization, and the development of green products and services.
Article 21: Climate Change Related Information Disclosure
- In addition to the climate change related governance, strategy, impact, risk, opportunity management, and indicators disclosed, disclosing entities shall disclose climate change related information as specified in this section.
Article 22: Climate Change Adaptation Assessment
- Disclosing entities shall assess the adaptability of their strategies and business models to climate change based on identified climate-related risks and opportunities, and disclose the following:
- Evaluation of climate change impacts on strategies and business models
- Significant uncertainties considered in the climate adaptation assessment
- Ability to adapt strategies and business models to climate change in the short, medium, and long term
Article 23: Transition Plans
- Disclosing entities shall disclose transition plans, measures, and progress in addressing climate-related risks and opportunities.
Article 24: Greenhouse Gas Emissions Disclosure
- Disclosing entities shall calculate and disclose total greenhouse gas emissions, including Scope 1, Scope 2, and encouraged to disclose Scope 3 emissions.
- Disclosing entities shall disclose the use of carbon credits and participation in carbon emissions trading.
Article 25: Greenhouse Gas Emissions Classification Disclosure
- Encourages disclosing entities to classify greenhouse gas emissions by business unit, country, or source type.
Article 26: Greenhouse Gas Emissions Calculation Methodology
- Disclosing entities shall disclose the standards, methods, assumptions, and calculation tools used to calculate greenhouse gas emissions, and explain the consolidation method for emissions.
Article 27: Greenhouse Gas Emission Reduction Practices
- Disclosing entities shall disclose information on greenhouse gas emission reduction practices, including emission reduction targets, measures, and achievements.
- Disclosing entities shall disclose greenhouse gas emissions reductions achieved through measures such as redesigning production processes, equipment upgrades, and fuel switching.
- Disclosing entities shall disclose participation in voluntary emission reduction programs and the China Certified Emission Reduction (CCER) scheme.
Article 28: Low-Carbon Technology and Product Development
- Disclosing entities shall disclose new technologies, products, and services that contribute to reducing carbon emissions and achieving carbon neutrality.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall monitor and reduce their GHG emissions and support their suppliers to do the same.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section
- Question 35: Does the facility have written environmental policy, procedures, and practices?
- Question 36: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets?
- Do you track and/or have a reduction program in place for greenhouse gas emissions?
- Does your company/facility publicly report data?
- Question 37: Do you have carbon reduction targets in place?
- Do you have carbon reduction targets in place for Scope 1 & 2 emissions?
- Do you have carbon reduction targets in place for Scope 3 emissions?
- Are your carbon reduction targets aligned with the Science Based Target initiative (SBTi) commitments?
- Are the carbon reduction targets in line with 1.5 degree trajectory to net zero by 2050 at the latest?
- Question 45: Please indicate which of the following types of air emissions are generated at the facility and describe the types of pollution control activities if used (such as Volatile organic chemicals, Corrosive vapors, Particulates or dusts, Ozone depleting substances, Combustion by-products, GHGs, Other Pollutants).
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 2: Pollution Prevention and Ecosystem Protection
Article 29: Ecological Protection
- Disclosing entities should integrate the support for building a Beautiful China and ecological environment protection into its development strategy and corporate governance process. Based on its specific production and operation characteristics, environmental management requirements, environmental impact, and the consistent demands of affected stakeholders, the entity should implement relevant environmental management systems and take effective measures to fulfill its ecological environment protection responsibilities, prevent environmental pollution, and protect biodiversity.
Article 32: Ecosystem and Biodiversity Conversation
- If a disclosing entity’s production and operation activities have a significant impact on ecosystems and biodiversity, it shall disclose the following information during the reporting period:
- The situation regarding the withdrawal of production and operation activities and facilities within ecological protection red lines.
- Measures taken and results achieved in the protection and restoration of production and operation sites, key terrestrial and marine ecological functional zones, ecological protection red lines, nature reserves, and other areas with important ecological functions or sensitive and fragile ecological environments.
- Measures taken and results achieved in the protection of wild animals and plants and the restoration of natural habitats.
- Measures taken and results achieved in the protection, sustainable use, access and benefit-sharing, monitoring, early warning, and risk management of biological genetic resources.
- Actions taken and results achieved to reduce the impact and dependence of product life cycles on ecosystems, biological species and their habitats, and biological genetic resources.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall understand their impacts on biodiversity, reducing and mitigating their footprint wherever possible.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section
- Question 49: Does the facility or immediate surroundings external to the site have any known soil, surface water or groundwater contamination?
- For historic or legacy environmental events (e.g. leaks, spillages), please describe briefly how this is managed (e.g., remediation and monitoring, among others).
- Does it impact surroundings of the site (e.g., neighboring facilities, companies), adjacent natural habitats?
- For recent environmental events (e.g. leaks, spillages), please describe briefly how this is managed.
- Does it impact surroundings of the site (e.g., neighboring facilities, companies), adjacent natural habitats?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 3: Resource Utilisation and Circular Economy
Article 34: Resource Utilisation & Recycling
- Disclosing entities shall efficiently utilize resources such as energy, water, and raw materials, strengthen conservation management throughout the resource usage process, and promote reduction, reuse, and recycling during production and distribution processes.
Article 35: Energy Utilisation
- Disclosing entities shall provide specific information regarding energy usage during the reporting period, including but not limited to the following:
- Basic information on energy usage, including but not limited to the total energy consumption (calculated in tons of standard coal) of direct and indirect energy (such as coal, electricity, gas, or oil), categorized by type, as well as the structure and total energy consumption intensity (e.g., per unit of production).
- Usage of clean energy, including but not limited to the types, total amount, and proportion of clean energy such as wind, solar, hydro, geothermal, biomass, ocean energy, and natural gas.
- Energy-saving goals and specific measures, including but not limited to the procurement of energy-saving production equipment, energy-efficient lighting, and temperature control systems, as well as measures like waste heat and pressure recovery, and energy cascading. Any specific difficulties encountered in energy usage (if applicable) should also be included.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall strive for circularity, designing out waste, taking measures to improve efficiency and reduce the consumption of resources, including water, favoring renewable and sustainable sources. They shall also take measures to reuse and recycle.
Suppliers shall monitor and reduce their GHG emissions and support their suppliers to do the same.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section
- Question 36: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets?
- Do you track and/or have a reduction program in place for energy consumption?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 2: Pollution Prevention and Ecosystem Protection
Article 33: Environmental Incidents & Compliance
- Disclosing entities shall disclose the following environmental information based on the actual situation during the reporting period:
- Overall situation of risk assessment for environmental incidents, management measures to prevent related risks, and emergency response plans for sudden environmental incidents.
- For major sudden environmental incidents during the reporting period, the date, location, and duration of the incident, the incident level, the handling methods and results, the impact on the company and the public, and the rectification measures.
- The situation of being subject to major administrative penalties or criminal liabilities by relevant ecological and environmental departments due to environmental incidents during the reporting period, including but not limited to violations, reasons for penalties, amounts of penalties, the impact on the disclosing entity's production and operation, and the company's rectification measures.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall comply with all applicable environmental regulations. All required environmental permits, licenses, information registrations and restrictions shall be obtained, and their operational and reporting requirements followed.
Suppliers shall maintain documentation necessary to demonstrate conformance with these Principles and compliance with applicable regulations.
Suppliers shall properly investigate incidents or concerns relating to these Principles, take necessary corrective actions, and provide remediation where required.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems Section
- Question 10: Does the facility or company maintain documentation for the following: Inspections by Regulatory Agencies, Environmental Incidents / Accidents.
- Question 14: Does the company have an incident management and reporting system established, covering for example certain types of incidents, reporting lines, consequences and corrective actions required? Does the site apply a systematic root cause investigation process to ensure that true causes are identified? Does the site have appropriate remediation plans in place and are they tracked to implementation and closure? Are corrective actions identified for the incident(s) and are they tracked to implementation and closure?
Environment Section
- Question 49: Does the facility or immediate surroundings external to the site have any known recent or historic report of soil, surface water or groundwater contamination?
- For historic or legacy environmental events (e.g. leaks, spillages), please describe briefly how this is managed (e.g., remediation and monitoring, among others). Does it impact surroundings of the site (e.g., neighboring facilities, companies), adjacent natural habitats?
- For recent environmental events (e.g. leaks, spillages), please describe briefly how this is managed. Does it impact surroundings of the site (e.g., neighboring facilities, companies), adjacent natural habitats?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 2: Pollution Prevention and Ecosystem Protection
Article 30: Pollutant Information
- If a disclosing entity or its major subsidiaries are included in the list of enterprises required to disclose environmental information by law, it shall disclose the following information:
- Pollution information: Including but not limited to the types, names, total emissions, approved total emissions, excess emissions, and environmental performance ratings (if any) of major pollutants, characteristic pollutants, and controlled substances as stipulated in international environmental conventions. Disclosing entities are encouraged to disclose specific information on pollutant emissions classified by business unit or facility, source type, and activity type.
- Pollution treatment technology and methods: The construction, operation, and results of pollution control facilities such as reduction in emission concentration / intensity or total emissions.
- Major pollutant emission reduction targets and specific measures taken to achieve these targets.
- The impact of pollutant emissions on employees, local communities, and other groups.
- Any significant administrative penalties or criminal charges incurred during the reporting period due to pollutant emissions, and whether there are any significant defects in the company’s environmental monitoring plan or risk management measures. The Exchange encourages other disclosing entities to refer to the provisions of the preceding paragraph for disclosure.
Article 31: Waste Information
- If a disclosing entity’s production and operation activities generate waste that has a significant impact on the environment, it shall disclose the following information on the waste generated during the reporting period:
- Total quantity (in tons) and density (e.g., per unit of revenue, unit of output, or per facility) of hazardous and non-hazardous waste generated.
- Methods of treatment and disposal of hazardous and non-hazardous waste.
- Waste reduction targets and specific measures taken to achieve these targets.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall have systems in place to ensure the safe handling, movement, storage, disposal, recycling, reuse, or management of waste, air emissions and wastewater discharges. Any waste, wastewater or emissions with the potential to adversely impact human or environmental health shall be appropriately managed, controlled and treated prior to release into the environment. This includes managing releases of active pharmaceuticals into the environment (PiE).
Suppliers shall have systems in place to prevent and mitigate accidental spills and releases to the environment and adverse impacts on the local community.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section
- Question 36: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets?
- Do you track and/or have a reduction program in place for hazardous waste?
- Do you track and/or have a reduction program in place for non-hazardous waste?
- Question 42: Does the facility have a process to select and manage third-party waste treatment and disposal facilities and service providers?
- What records or documentations of waste disposal are maintained?
- Please provide specific details on land filling of waste, including categories and volumes.
- Question 43: Does the facility use any of the following waste disposal methods & locations (explain as applicable)?
- Include explanation of how hazardous, including API containing waste (e.g. antibiotics), biohazardous, fermentation biomass, sludge/biosolids from waste water, non-hazardous waste is disposed of.
- Question 44: Please indicate which methods are used to manage process wastewater from this facility.
- Question 45: Please indicate which of the following types of air emissions are generated at the facility and describe the types of pollution control activities if used.
- Question 49: Does the facility or immediate surroundings external to the site have any known soil, surface water or groundwater contamination?
- For historic or legacy environmental events (e.g. leaks, spillages), please describe briefly how this is managed (e.g., remediation and monitoring, among others). Does it impact surroundings of the site (e.g., neighboring facilities, companies), adjacent natural habitats?
- For recent environmental events (e.g. leaks, spillages), please describe briefly how this is managed. Does it impact surroundings of the site (e.g., neighboring facilities, companies), adjacent natural habitats?
- Question 50: Please indicate whether the facility has addressed the following potential environmental risks arising from storing and handling hazardous substances incl. petroleum products and APIs.
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 3: Environmental Information Disclosure
Section 3: Resource Utilisation and Circular Economy
Article 36: Water Resources Utilisation
- Disclosing entities should disclose specific information about water resource usage during the reporting period, including but not limited to the following:
- Basic information on water resource usage, including but not limited to total water consumption (measured in tons) and usage intensity (e.g., per unit of production);
- Water conservation targets and specific measures, water resource recycling and reuse status, and any specific challenges encountered in water resource usage (if any).
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall strive for circularity, designing out waste, taking measures to improve efficiency and reduce the consumption of resources, including water, favoring renewable and sustainable sources. They shall also take measures to reuse and recycle.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Environment Section
- Question 36: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets?
- Do you track and/or have a reduction program in place for water consumption?
- Question 38: Long-term water sourcing strategy
- Does the facility have an authorisation/permit for water intake from groundwater, river or a public system?
- Is your site located in a water scarce region, or with risk of water scarcity?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 5: Governance Information Disclosure Related to Sustainable Development
Section 1: Governance & Management Systems Related to Sustainable Development
Article 52: Due Diligence
- The exchange encourages disclosing entities to, based on their actual circumstances, disclose due diligence conducted during the reporting period in identifying and addressing negative impacts or risks related to sustainable development. This includes, but is not limited to, the institutions or personnel responsible for due diligence, the scope of the due diligence, the procedures for identifying negative impacts or risks related to sustainable development, and the specific actions taken to address these negative impacts and risks.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall have systems in place to carry out due diligence on their own supply chain, including traceability for the sources of raw materials to support legal and sustainable sourcing.
Suppliers shall identify and comply with applicable laws, regulations, recognized standards, and relevant customer requirements.
Suppliers shall have mechanisms to determine and manage risks in all areas addressed by these Principles. Suppliers shall have a management of change process in place to evaluate and control the risk of change.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems
- Question 2: Does the company have the required legal licences/permits for its operations, such as a valid business licence?
- Question 3: Are there any regulatory compliance issues with regards to Health and Safety, Ethics, Environment or Human Rights?
- Is there any ongoing litigation or regulatory notices with respect to regulatory compliance?
- Are there any historical major regulatory actions?
- Any continuous / prolonged situations where regulatory compliance requirements are not in place or exceeded (within the past 3 years)?
- Question 6: Does the facility and/or company have policies and/or practices in place to risk assess their programs and potential impacts on responsible business conduct principles?
- Are there appropriate tools whereby programs, policies, and/or SOPs and major business impacts for the site are assessed routinely?
- Question 7: Does the facility or company have a Change Control process, e.g. for organizational changes, raw materials, processes, personnel, non-GMP changes, equipment, introduction of new chemicals, new & existing processes etc?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 49: Employee Rights
- Disclosing entities must lawfully protect the legitimate rights and interests of employees, [and] establish a reasonable and effective employee grievance system.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall establish grievance mechanisms accessible to internal and external stakeholders who shall be encouraged to use them to report concerns, illegal activities or breaches of these Principles at work without threat of or actual reprisal, intimidation or harassment.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Human Rights Section
- Question 34: Does the company have a grievance mechanism in place which is accessible to internal and external stakeholders, in a language which they understand?
- How does the company communicate the grievance mechanism to identified internal and external stakeholders?
- Does the site regularly monitor the use of the grievance mechanism and evaluate its effectiveness?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 5: Governance Information Disclosure Related to Sustainable Development
Section 1: Governance & Management Systems Related to Sustainable Development
Article 53: Stakeholder Communication
- Disclosing entities should provide details of its communication with stakeholders, including investors, during the reporting period, including but not limited to the following:
- The establishment and implementation of a stakeholder communication system.
- The channels and execution of receiving and responding to stakeholder opinions and suggestions, such as communication methods, frequency, and content.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall establish grievance mechanisms accessible to internal and external stakeholders who shall be encouraged to use them to report concerns, illegal activities or breaches of these Principles at work without threat of or actual reprisal, intimidation or harassment.
Suppliers shall have effective systems to communicate these Principles to relevant stakeholders including their workers, contractors, suppliers and local communities.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Section
- Question 1: Has the facility demonstrated commitment to the concepts described in the PSCI Principles (covering Governance & Management Systems, Ethics, Human Rights, Health & Safety and Environmental Protection)?
- And does the top management demonstrate leadership and commitment with these principles?
- Is appropriate resource allocated and are accountabilities known, clearly defined and communicated?
- Do the concepts of the Principles appear in documents and in communications to employees, contractors and suppliers?
- Question 8: Does the supplier have Business Continuity Management program in place to minimize the impact of potential business disruptions?
- Are notification procedures/processes in place to inform key stakeholders when a crisis event occurs and a business continuity plan activated?
Human Rights Section
- Question 34: Does the company have a grievance mechanism in place which is accessible to internal and external stakeholders, in a language which they understand?
- How does the company communicate the grievance mechanism to identified internal and external stakeholders?
- Does the site regularly monitor the use of the grievance mechanism and evaluate its effectiveness?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 3: Suppliers & Clients
Article 45: Supply Chain Risk Management
- Disclosing entities should provide information on how it strengthened supply chain risk management and ensured the security and stability of the supply chain during the reporting period, including but not limited to
- Basic information on supply chain risk management;
- Measures and positive outcomes.
The exchange encourages disclosing entities to disclose actions and initiatives aimed at strengthening supply chain management and promoting sustainable development of the supply chain.
Article 46: Equal Treatment of SMEs
- If the balance of accounts payable (including notes payable) at the end of the reporting period exceeds 30 billion RMB or accounts for more than 50% of total assets, the disclosing entity must disclose the amount of overdue unpaid payments at the end of the reporting period and the proposed solutions. If the disclosing entity or its controlling subsidiary publicly discloses information about overdue unpaid payments to small and medium-sized enterprises (SMEs) through the National Enterprise Credit Information Publicity System, it must disclose the amount of overdue unpaid payments to SMEs, the payment terms set for SME suppliers, the reasons for the overdue payments, and whether any litigation or arbitration is involved. The proposed solutions should also be disclosed.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall have systems in place to carry out due diligence on their own supply chain, including traceability for the sources of raw materials to support legal and sustainable sourcing.
Suppliers shall identify and comply with applicable laws, regulations, recognized standards, and relevant customer requirements.
Suppliers shall have mechanisms to determine and manage risks in all areas addressed by these Principles. Suppliers shall have a management of change process in place to evaluate and control the risk of change.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems Section
- Question 5: Does the facility have processes in place to ensure responsible business practices with their suppliers, contractors and sub-contractors, aligned with the PSCI Principles (i.e. Human Rights, Ethics, Environment, Health & Safety)?
- Does the facility have a traceability process in place for its supply chain?
- Does the facility have a process to evaluate and mitigate the risks linked to sourcing, including from known high-risk regions globally?
- Are responsible business expectations clearly communicated to the supplier and reinforced on a regular basis?
- Is there a purchasing policy that ensures only approved suppliers are used?
- Are suppliers measured against the responsible business practice expectations by on-site assessment/audit?
- Are suppliers measured against the responsible business practice expectations by desk-top assessment, e.g. questionnaires, supplier self compliance statement?
- Question 8: Does the supplier have Business Continuity Management program in place to minimize the impact of potential business disruptions, including natural disaster?
- Identification of the potential business disruptions with an impact, e.g. natural disasters, social, environmental, economic, political disruptions, supply chain disruptions, cyber security?
- Identification of the major facility dependencies and their business impacts in case of disruption, e.g. facility/site, 3rd party and recovery time objectives?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 5: Governance Information Disclosure Related to Sustainable Development
Section 1: Governance & Management Systems Related to Sustainable Development
Article 51: Sustainable Governance
- Disclosing entities should actively integrate the concept of sustainable development into the company's governance systems and processes, in line with the company's actual situation and the requirements of this guideline. This includes further improving and refining the corporate governance mechanism to promote the company's sustainable development.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall have systems in place to carry out due diligence on their own supply chain, including traceability for the sources of raw materials to support legal and sustainable sourcing.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems Section
- Question 1: Has the facility demonstrated commitment to the concepts described in the PSCI Principles (covering Management Systems, Ethics, Human Rights & Labor, Health and Safety and Environmental Protection)?
- Does the company actively work on creating a culture of responsible practices?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 4: Employees
Article 49: Employee Rights
- Disclosing entities must lawfully protect the legitimate rights and interests of employees, [...] enhance employee training [...].
Article 50: Overall Situation of Employees
- Disclosure entities shall disclose the overall situation of employees during the reporting period, including but not limited to the following aspects: [...] Employee career development and training, [...] the types and frequency of employee training, the extent of training provided, the annual training expenditure, and the coverage rate of employee training.
PSCI Principles
The following PSCI Sub-Principles are relevant to this issue:
Suppliers shall have a training program that achieves an appropriate level of knowledge, skills and abilities in management and workers to address the expectations in these Principles.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Governance & Management Systems Section
- Question 11: Are all employees made aware of company policies and procedures applicable to them, are they trained accordingly and does the site check and ensure that the content of the training is understood by all employees, incl. Ethics, Human Rights & Labor, and Environment, Health & Safety training?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Innovation & Technology Ethics
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 2: Innovation & Technology Ethics
Article 41: Science Ethics
- The exchange encourages disclosing entities to actively pursue an innovation-driven development strategy, continuously enhance their innovation capacity and competitiveness, adhere to scientific ethics, respect the spirit of science in their innovation decisions and practices, and maximize the positive effects of science and technology.
Article 42: Innovation
- On the premise of not involving national security or state secrets, while also considering the protection of trade secrets, the exchange encourages disclosing entities to voluntarily disclose specific information about their efforts during the reporting period to promote technological innovation, enhance the application and transformation of scientific achievements, and improve technological competitiveness, including but not limited to:
- Technological innovation strategies and goals
- Specific activities related to technological innovation
- R&D progress and achievements obtained
- The impact of technological innovation achievements and their applications.
Article 43: Science and Technology Ethics
- Entities engaged in scientific research, technological development, or other activities in ethically sensitive fields such as life sciences and artificial intelligence should disclose their compliance with scientific and technological ethics during the reporting period, including but not limited to the following:
- The fields of scientific research and technological development in which the entity is involved, and the ethical standards they follow.
- Provisions related to scientific and technological ethics in the internal management system and their implementation, as well as the establishment and operation of a scientific and technological ethics (review) committee, if applicable.
- Violations of scientific and technological ethics, including the basic circumstances of such behavior, any penalties imposed by authorized agencies, the internal investigation and accountability measures taken, and any corrective actions implemented, if applicable.
- The conduct of internal and external training on scientific and technological ethics, as well as public education and outreach efforts.
SAQ & Audit template
The PSCI SAQ & Audit Template collects responses relevant to this issue:
Ethics Section
- Question 15: Does the facility or company have formal ethics policies, Codes of Conduct, tools or processes that govern company and employee business practices? Is ethical marketing and advertising included?
Resources
There are currently no PSCI resources on this topic.
Rural Revitalization & Social Contribution
Legislative Provisions
The following legislative provisions are included:
Chapter 4: Social Information Disclosure
Section 1: Rural Revitalization & Social Contribution
Article 38: Sustainable Economic and Social Development
- The exchange encourages disclosing entities to support rural revitalization and social public welfare activities in line with the development of their core business, while ensuring the company's healthy development and sustained returns to investors, thereby promoting sustainable economic and social development.
Article 39: Rural Revitalization
- Disclosing entities should provide specific information regarding its support for rural revitalization during the reporting period, including but not limited to the following:
- For entities with a significant portion of their business in rural and poverty-alleviated areas, they should disclose how the company integrates support for rural revitalization and consolidates the achievements of poverty alleviation into its corporate strategy, in line with business development.
- Based on business activities in rural and poverty-alleviated areas, disclose specific measures taken to support the development of rural specialty industries, local employment, and other initiatives related to rural revitalization.
- Specific outcomes of the work, including the total investment amount during the reporting period, the scope and number of beneficiaries, and the impact on the company's brand and business operations.
Article 40: Social Contribution
- Disclosing entities should provide basic information about its contributions to the public and society during the reporting period, including but not limited to details of activities such as charitable initiatives and volunteer work, as well as the amount of funds, personnel, and time invested, the results achieved, and the impact on the company's brand and business operations.
Resources
There are currently no PSCI resources on this topic.
Companies in Scope
Mandatory disclosure:
- Companies included in the SSE 180 Index, STAR 50 Index, the Shenzhen 100 Index and ChiNext Index during the reporting period
- Companies simultaneously listed on domestic (either SSE or SZSE) and international stock exchanges (dual-listed companies)
Voluntary disclosure:
Other companies listed on the SSE, SZSE but do not belong to the above categories, and the SMEs listed on the BSE are encouraged to report voluntarily. The BSE was set up in September 2021 as the primary listing platform for SMEs in China. Its guidelines recognize the SMEs' stage of development and limited disclosure capabilities, and only encourage the capable SMEs to voluntarily submit reports.
Reporting Requirements
As an overarching principle, companies should consider the following core elements when reporting on the relevant topics:
- Governance: Corporate governance structure overseeing the sustainability impact, opportunities and risks
- Strategy: Plan, strategy and method in responding to sustainability impact, opportunities and risks
- Risk Management: Process and procedures used to identify, assess, and manage sustainability impact, opportunities and risks
- Metrics and Targets: Metrics and targets used to assess and manage sustainability impact, opportunities and risks
Penalties/ Non-compliance/ Enforcement & Sanctions
Non-compliance with these guidelines may lead to various repercussions. Initially, the focus will be on encouraging compliance through guidance and support. However, persistent non-compliance or significant failures in disclosure can result in administrative penalties, reputational damage, and potential exclusion from stock exchange listings. The guidelines are designed to gradually become more stringent, increasing the scope and depth of required disclosures over time to ensure comprehensive and transparent reporting.