New Environmental Disclosure Rules To Take Effect in China
In order to implement the “Plan for the Reform of the Legal Disclosure System of Environmental Information” issued by China’s Ministry of Ecology and Environment (MEE) in May 2021, the MEE has issued new disclosure rules (Rules) that will require domestic entities to disclose a range of environmental information on an annual basis, effective 8 February 2022. The Rules apply to listed companies and bond issuers that were subject to certain environmental penalties in the previous year and other entities identified by the MEE, including those that discharge high levels of pollutants. Covered entities must disclose information on environmental topics including:
- environmental management;
- pollutant generation;
- carbon emissions; and
- contingency planning for environmental emergencies.
Covered listed companies and bond issuers must also disclose climate change, ecological and environmental protection information related to investment and financing transactions.
The Rules follow efforts by other Chinese regulators intended to enhance the environmental disclosure landscape in China, including amendments requiring listed companies to disclose environmental administrative penalties and encouraging carbon emissions disclosures issued by the China Securities Regulatory Commission in July 2021.
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