Working with China? ESG Is Becoming a Market Access Requirement

For companies working with China or aiming to partner with Chinese state-owned enterprises, the rules are changing: ESG compliance, carbon footprint traceability, and the creation of a closed-loop cycle are becoming mandatory requirements on which access to procurement and supplier status depend.

In effect, ESG is becoming a competitive tool: suppliers that are first to build a transparent data system will gain priority access to contracts and stronger negotiating positions.

The trend became known in April 2026 from the publication by the China Federation of Logistics and Purchasing (CFLP): ‘White Paper on Global Supply Chain Trends in Consumer Goods — 2026’.

In parallel, SASAC¹ (State-owned Assets Supervision and Administration Commission of the State Council) of the People’s Republic of China issued the ‘Guidelines for Building Green, Low-Carbon Supply Chains for Central Enterprises (Pilot Version)‘, which sets the following changes for both state corporations and their counterparties:

• an ESG evaluation system for suppliers is introduced, forming a ‘green’ database;
• compliant suppliers gain access to contracts; others lose priority;
• the carbon footprint must be tracked across the entire chain: raw materials → production → logistics;
• the goal by 2035 is the full transformation of supply chains into ‘green’ ones.

CSDDD² and EUDR³ are cited as drivers aligning with export market standards.

It is therefore rational to begin collecting and verifying data now: request environmental certificates from manufacturers, record the origin of raw materials, implement basic emissions accounting, and prepare a documented evidence base for audits. In the near-term horizon, this significantly reduces the risk of losing access to Chinese state procurement and allows entry into ‘green’ supplier databases at an early stage.

Definitions:

SASAC¹ (State-owned Assets Supervision and Administration Commission of the State Council) — the body overseeing and managing state-owned assets under the State Council of the PRC.

CSDDD² (Corporate Sustainability Due Diligence Directive) — EU Directive on corporate sustainability due diligence.

EUDR³ (European Union Deforestation Regulation) — EU Regulation on combating deforestation.