China’s new ESG standards (CSDS): what fashion leaders need to know
As sustainability regulations accelerate worldwide, fashion and textile leaders can no longer afford to focus on just one region. While Europe has been deeply engaged with the evolution of the Corporate Sustainability Reporting Directive (CSRD), a powerful regulatory transformation is simultaneously reshaping the global supply chain from the East. China, together with strategic hubs such as Singapore and Hong Kong, is redefining ESG disclosure standards with a speed and scale that will directly impact international brands, manufacturers and suppliers.
In this interview, Nicoletta Ferro, Strategic ESG Consultant and Digital Lead, shares her expert perspective on China’s new Sustainability Disclosure Standards for Business Enterprises (CSDS), the ripple effects across global value chains, and what fashion leaders must do now to stay ahead of a rapidly evolving compliance landscape.
What’s new with sustainability standards?
For the last two years, sustainability professionals and the business world have been obsessed with Brussels. We’ve watched the drama unfolding around the Corporate Sustainability Reporting Directive (CSRD) and the "Omnibus" package that simplified many of its requirements.
But while we were looking West, a massive wave was building in the East — the real engine room of the world’s textile industry. Three hubs are leading the transformation in the region in very different ways:
Singapore for green finance
Hong Kong as the bridge for investors
Mainland China as the powerhouse for non-financial disclosure
So, what is going on in China in terms of sustainability?
China is embarking on a pivotal regulatory transformation in corporate sustainability. The China Securities Regulatory Commission (CSRC) has introduced mandatory ESG (Environmental, Social, and Governance) disclosure rules, signaling a significant shift from previous voluntary guidelines to a binding national framework.
At the core of this evolution are the Sustainability Disclosure Standards for Business Enterprises (CSDS).
They were released in two phases:
2024: The Sustainability Disclosure Standards for Business Enterprises – Basic Standards (Trial)
December 2025: The Chinese Ministry of Finance and other departments published the addendum standards for Climate Change (Trial)
The Chinese standards are highly inspired by leading international frameworks, such as the International Sustainability Standards Board (ISSB) — specifically IFRS S1 (general sustainability reporting) and IFRS S2 (climate disclosure) — and they also draw heavily from GRI and SASB.
They cover 21 ESG-specific topics, including Climate Change and Pollution, as well as a social dimension that is dealt with through “Chinese characteristics.” They also focus heavily on Supply Chains, which are vital to the Chinese economy.
The newly released climate standards require companies to explain their work in four areas:
Governance: Who in the company is in charge of managing ESG issues?
Strategy: What is the company’s long-term plan to create value for its stakeholders?
Risk Management: How do they identify and mitigate ESG risks?
Metrics and Targets: The actual numbers — for instance, water usage or emission rates.
Are the standards already effective, and whom do they target?
To be clear: for the moment, the standards are mandatory on a trial basis only for all A-share listed companies and those listed on China’s three main stock exchanges (Shanghai, Shenzhen and Beijing), with foreign-invested listed entities explicitly included.
The timeline is strict: the first mandatory ESG reports aligned with these standards are due April 30, 2026, covering the 2025 fiscal year. However, the scope will eventually expand from listed companies to non-listed companies, and from large enterprises to SMEs, reaching a fully unified system by 2030.
What if I am a European company selling in China?
Even if your company isn't listed on a Chinese stock exchange, you are likely part of the value chain of a company that is. Because of this "ripple effect", you will be involved too. To file their mandatory reports, Chinese companies will demand precise, audit-ready ESG data from their suppliers and partners. You can also expect new clauses in your sales contracts; Chinese partners will legally require you to provide environmental data that meets CSDS standards so they can maintain their own compliance.
On one hand, as a European company, you must comply with EU regulations like the CSRD, the "Product Passports," and specific textile regulations. Combined with Chinese requirements, you will essentially face a "double squeeze."
And what if I am a Chinese manufacturer selling into Europe?
Chinese manufacturers are also facing a "double squeeze." They must satisfy the CSDS at home while meeting the EU's strict sustainable product requirements to enter the European market.
Final word for fashion leaders?
Be aware of what is unfolding and start preparing now.
The message is clear: sustainability compliance is no longer regional, it is systemic, interconnected, and accelerating. Whether you are a European brand sourcing from Asia or a Chinese manufacturer exporting to the EU, the “double squeeze” is becoming a defining business reality. Proactive preparation, strategic alignment, and strong ESG governance are no longer optional, they are competitive advantages.
At Between Research Fashion Recruitment, we support fashion and luxury companies in navigating complex sustainability transformations. In collaboration with Nicoletta Ferro, we offer tailored training programs and executive workshops focused on ESG strategy, regulatory readiness, supply chain transparency, and global sustainability standards.
If you want your teams to be prepared, informed, and strategically positioned for what’s coming next, get in touch with Between Research to design a dedicated training pathway with Nicoletta Ferro. The future of sustainable fashion starts with informed leadership.
Nicoletta Ferro, Strategic ESG Consultant and Digital Lead
BETWEEN RESEARCH is an international agency based in Milan and Shanghai, with over 25 years of experience in headhunting and consultancy. Through its BETWEEN CONSCIOUS PROGRAM, with expert interviews, and in-depth analyses it promotes sustainability and positive change in fashion. We hope these contents will inspire you as they inspired us.
