What's Happening in Sustainability & ESG (05.05 - 12.05) 🌎

This week’s read time: 8 minutes

Welcome to this edition of Green Digest, where you will get updated about everything happening in the Sustainability & ESG space in less than 10 minutes. 🌎

We go through tons of articles and data from the most reliable sources, filter & simplify them, and serve them to you in bite-sized chunks every week. 🍀

In this edition, we’ll cover:

• Key takeaways from Trellis' The State of the Sustainability Profession in 2026 📑

• The EU is seeking feedback on revised sustainability reporting standards 🇪🇺

• The US SEC is beginning the process of rescinding the climate disclosure rules 🇺🇸

• Several new projects announced across clean energy, batteries, and biofuels 🟢

• and other news 🌍

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

📑 The 2026 Trellis State of the Sustainability Profession report shows that the pace of sustainability investment has slowed, but has not reversed. Among companies with at least $1 billion in revenue, 46% increased sustainability headcount and budgets over the past two years, while 25% reduced them. Another 15% shifted resources between areas, and 13% kept resources unchanged. Public commitments have also largely held steady: among companies with sustainability targets, 57% maintained them, 24% strengthened them, 14% weakened them, and only 2% dropped them entirely.

The clearest change is in how companies are prioritizing and communicating sustainability. 63% of companies have either reduced sustainability communications or changed the language they use. The shift is especially pronounced among companies with more than $10 billion in revenue, where 80% are downplaying or adjusting public statements.

At the same time, business leaders are putting more emphasis on compliance, with 58% giving it higher priority than two years ago. 44% are placing greater priority on making the business case for sustainability, and 41% are giving more attention to climate risk management. Social issues moved in the opposite direction, with 53% saying they are now a lower priority.

CEO engagement has weakened, and the report shows that this is closely linked to sustainability budgets, staffing, commitments, and morale. 67% of respondents still say their CEO is at least modestly positive toward sustainability, but that is down from 86% four years ago. 20% now describe their CEO as having a negative view of sustainability. The number of sustainability teams reporting directly to the CEO also fell from 30% in 2024 to 18% in 2026, while reporting to finance doubled from 7% to 14%, and reporting to legal rose to 20%.

The professional outlook is more strained than in previous years. 38% of sustainability professionals say changes in budget, staffing, or structure have made it harder to achieve their goals, compared with 22% who say it has become easier. 52% of companies are putting more time and money into sustainability reporting, but respondents are split on its value: 33% say reporting helps them make better decisions, while 30% say it diverts resources from higher impact work. Job sentiment has also weakened: 41% describe themselves as discouraged, 30% as insecure, and 17% as pessimistic.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🇪🇺 The European Commission published draft revised ESRS and voluntary sustainability reporting standards, launching a consultation on its simplified reporting framework under the Omnibus initiative. The proposal largely keeps EFRAG’s recommended cuts, including reducing mandatory datapoints by 61% and total datapoints by more than 70%, while maintaining the EU’s double materiality approach despite speculation of closer alignment with ISSB standards. The draft also introduces more flexibility for GHG reporting methodologies and updates the voluntary standard for smaller companies, as the EU moves to significantly reduce the number of companies covered by mandatory CSRD reporting.

The European Commission also proposed updated EU ETS benchmark values for 2026–2030, including expanded free carbon allowance allocations for indirect electricity emissions, expected to provide around €4 billion in additional support to industry. The update aims to balance decarbonization goals with industrial competitiveness, while maintaining free allocations covering roughly 75% of emissions on average.

🇺🇸 The US SEC is beginning the process of rescinding the climate disclosure rules introduced under the Biden administration, according to a filing and statements from the agency. The 2024 rules would have required public companies to disclose climate risks, emissions data and the financial impacts of severe weather events, but faced immediate legal challenges and were paused pending court review. Under SEC Chair Paul Atkins, the agency has dropped its defense of the rule and is now preparing a formal proposal to repeal it, marking another rollback of climate-related regulation under the Trump administration.

In related US news, New York Governor Kathy Hochul agreed with state legislators on changes to the state’s climate targets as part of the 2027 budget, delaying emissions reduction regulations and replacing the 2030 economy-wide emissions goal with a new target of a 60% reduction by 2040. The deal requires regulations to be introduced by 2028 instead of the previously proposed 2030 deadline, while maintaining the state’s 2050 target of cutting emissions by at least 85%. Hochul said the changes reflect affordability concerns and the impact of geopolitical and policy shifts, including US attacks on renewable energy incentives.

🇩🇪 Germany launched the 2026 bidding round of its contracts for difference (CCfD) program, with up to €5 billion available to help energy-intensive industries invest in low-carbon production technologies. The program subsidizes the cost gap between conventional and low-carbon manufacturing, with companies repaying support if cleaner technologies later become cheaper. Germany also eased emissions reduction requirements and expanded eligibility to include carbon capture (CCUS) and industrial heat projects, aiming to make the scheme more flexible and technology-neutral.

WHAT ARE COMPANIES DOING?

Corporate sustainability, new tools and services & companies in the news

⚡️ Octopus Energy Generation announced a €584 million investment to expand onshore wind capacity across Europe, acquiring 321 MW of wind farms across 17 sites in France, Germany, and Poland. The projects, acquired through the company’s Sky fund, are expected to generate enough renewable electricity to power more than 250,000 homes annually. Octopus said the investments reflect Europe’s accelerating shift toward energy independence and homegrown clean power amid geopolitical risks and volatile gas prices.

🟢 Ameresco and HASI launched Neogenyx Fuels, a new joint venture focused on scaling renewable natural gas (RNG) and advanced biofuels projects across the US. HASI will invest $400 million into the platform, which the companies said could become one of the largest biogas developers in the country. The venture, valued at $1.8 billion, aims to capitalize on growing demand for low-carbon, domestic energy solutions.

🔋 SoftBank launched a new battery business focused on advanced battery cells and energy storage systems to support rising electricity demand from AI data centers. The company aims to begin large-scale production by FY2028 and generate more than ¥100 billion ($633 million) in annual battery revenue by FY2030. SoftBank is partnering with South Korea’s Cosmos Lab and DeltaX to develop zinc-halogen batteries and high-density storage systems designed for AI infrastructure.

🌾 PepsiCo and Fertiberia signed a multi-year agreement to scale the use of low-carbon, green hydrogen-based fertilizers across PepsiCo’s European agricultural supply chain. Under the deal, Fertiberia will supply up to 150,000 tons of low-carbon fertilizer annually by 2030, covering around 400,000 acres used for crops including potatoes, corn, and sunflowers.

🟢 Bayer and bp formed a long-term alliance to scale camelina under Bayer’s newgold brand for use in biodiesel, renewable diesel, and sustainable aviation fuel (SAF). Camelina can be grown on idle land or between crop rotations with lower inputs, offering farmers additional revenue opportunities while supporting the low-carbon fuel economy.

🏢 Amazon and Transaera announced a deal to deploy Transaera’s next-generation heat pump technology across Amazon’s global buildings network following a successful six-month trial. The system uses advanced materials to remove humidity more efficiently than conventional HVAC systems, reducing energy consumption by around 40% while supporting electrification and lower emissions.

🏷️ Pandora introduced carbon footprint labelling for each of its lab-grown diamonds, adding emissions data alongside traditional criteria such as Cut, Color, Clarity and Carat. The company said the move responds to growing consumer demand for transparency and noted that lab-grown diamonds have a carbon footprint roughly 90% lower than mined diamonds.

Solutions

📊 Persefoni launched Analytics Agent, a new agentic AI feature designed to help companies analyze and understand emissions data faster using plain language prompts. The tool allows users to generate charts, tables and deeper emissions insights on demand, helping companies track footprint changes, compare performance and respond to stakeholder questions more efficiently.

📊 EcoVadis and Workiva launched a strategic partnership to help companies access and integrate supplier-level carbon emissions data into Scope 3 reporting and disclosures. The collaboration connects EcoVadis’ Carbon Data Network with Workiva Carbon, enabling companies to use verified supplier emissions data instead of industry averages to improve carbon accounting, reporting, and supply chain decarbonization efforts.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇪🇺 A new European Parliament draft report on the SFDR review proposes stricter disclosure and investment rules for sustainable financial products under the EU’s planned fund categorization system. Key proposals include mandatory Principal Adverse Indicator disclosures, reporting on sustainability engagement strategies, and disclaimers for products making ESG claims without using an official EU sustainability label. The draft also proposes requiring “ESG Basics” funds to exclude at least 20% of the lowest sustainability-rated securities, as lawmakers seek to improve transparency and reduce greenwashing risks.

In related EU news, the ECB released an updated compendium of good practices to help banks strengthen climate and nature-related risk management, with a focus on areas such as physical risk, nature-related risk, transition planning, and stress testing. ECB official Frank Elderson said banks have improved in recent years but still underestimate many risks, particularly nature and physical climate impacts. The guide highlights practices from more than 60 institutions, including transition finance strategies for hard-to-abate sectors, proactive client engagement, and the use of data and scenario analysis to better integrate climate and nature risks into banking decisions.

🏦 BBVA channeled €36 billion into its sustainable business in Q1 2026, up 33% year over year, continuing strong momentum after reaching a record €134 billion in 2025. The bank has now achieved €170 billion toward its €700 billion sustainable finance target for 2025–2029, with 76% of activity focused on climate change and natural capital.

Startup funding rounds

🌊 Ocean energy startup Panthalassa raised $140 million in a Series B round to scale its wave-powered AI computing platform. The company develops offshore nodes that use ocean wave energy to power AI chips directly at sea, while ocean water provides natural cooling.

🔋 Battery storage startup Moment Energy raised $40 million in a Series B round to scale production of energy storage systems made from repurposed EV batteries, targeting growing demand from AI and data centers. The Vancouver-based company says its battery systems can last up to 30 years through a proprietary pack-swapping architecture, lowering storage costs and reducing battery waste.

⚡️ Danish renewable electricity platform Reel raised €15 million in a Series A round. The company helps businesses stabilize electricity costs and reduce emissions while improving returns for renewable energy producers through PPAs, algorithmic trading, and optimization of solar, wind, battery, and hybrid assets.

🟢 Cambridge spin-out Barocal raised $10 million in Seed funding to commercialize its solid-state cooling and heating technology aimed at replacing conventional HVAC systems with lower-emission alternatives. The company plans to initially focus on data center cooling and commercial refrigeration, targeting a rapidly growing global HVAC market.

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