ESG Series No. 39: Beyond Safety: A Holistic Legal and Technical Approach to Chemical Compliance in China and Overseas

1. The Evolving Landscape of Chemical Regulation
In the chemical industry, regulatory compliance is no longer just a checkbox - it is a critical pillar of compliance governance. At the center of this landscape is the Globally Harmonized System of Classification and Labelling of Chemicals (GHS), i.e., the 'Purple Book'.
While the GHS establishes a harmonized system for the global dissemination of hazard information, its implementation is far from uniform. As we move into the era of its 11th Revised Edition (released September 2025), the complexity for enterprises to respond has increased. The 'Building Block' approach allows each jurisdiction to adopt different hazard classes and subcategories. This means that a single SDS or safety label can rarely achieve universal compliance.
2. Typical Compliance Issues in the Chinese Market
(1) The Gap Between the Global Version and Local Laws
Some companies assume that product compliance with the laws, regulations and standards of their headquarters’ jurisdiction is sufficient, but they fail to make it adaptable to the Chinese market. It is not uncommon to find that descriptions in SDS and labels are non-compliant.
(2) The Gap Between Safety, Laws and Sustainability
Some companies believe that a technically accurate SDS is sufficient to protect them. However, they often overlook the broader legal and sustainability claim risks inherent in chemical marketing and commodity labeling. In China, regulatory authorities and market players are increasingly focusing on the following matters:
Strict Labeling Standards:
PRC laws such as the Product Quality Law and the Consumer Protection Law impose rigorous requirements on general product information.
Multiple Functions Standards:
Various standards, whether mandatory or voluntary, set pre-conditions for claiming certain functions.
Anti-Greenwashing Scrutiny:
As sustainability becomes a marketing tool, 'eco-friendly' and other similar claims are under the microscope. Unsubstantiated claims can lead to heavy fines and litigation for false advertising.
Regulatory Divergence:
What is green, safe or functional in one market may be legally prohibited or misleading in another.
3. Our Suggestions: A Joint Legal-Technical Approach
To navigate these challenges, we suggest that companies adopt a joint legal-technical mindset and consider the following:
Mobilizing internal teams to revisit and upgrade product compliance systems by incorporating legal, compliance, technical, and sustainability considerations — for example, in the areas of legal obligations, risk analysis, policies and procedures, with a particular focus on addressing greenwashing risks;
Reviewing general commodity labels (even for descriptions of product information), safety labels, and SDS for each product in accordance with the upgraded product compliance system or in consultation with experienced external experts.