What's Happening in Sustainability & ESG (07.07 - 13.07) 🌎

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. 🍀

PRESENTED BY 51toCarbonZero

What SBTi 2.0 means for your organisation | Upcoming Webinar

🚨 UPCOMING WEBINAR | Wednesday 22 July | 3:00 PM BST

The SBTi's new Corporate Net-Zero Standard V2.0 is the biggest update to corporate climate target-setting since 2021. What does it mean for your organisation?

Join Emma Littlewood, Director of Policy & Research at 51toCarbonZero and former SBTi Technical Advisory Group member, to learn what’s changed, what it means for your targets, and the actions to take now.

📅 22 July | 🕒 3:00 PM BST

In this edition, we’ll cover:

• Leaked EU procurement draft places greater emphasis on sustainability criteria 🇪🇺

• Achieving SBTi’s highest “Leadership” status could cost heavy emitters billions of dollars annually 📑 

• A new report by Currence shows that global climate tech VC investment reached $26.1 billion in H1 2026, up 55% year over year 📈

• Microsoft reported a 25% increase in emissions in fiscal 2025 🔴

• and other news 🌍

PRESENTED BY REUTERS EVENTS

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 A leaked draft of the EU’s upcoming Public Procurement Regulation, expected in September, would strengthen sustainability criteria across public procurement. The proposal places greater emphasis on social criteria, including decent work, labour market inclusion, equality, and human rights in supply chains. It also promotes circularity by encouraging the use of recycled and refurbished products, resource efficiency, and waste reduction. Lowest price would no longer be the default award criterion, with the Best Price Quality Ratio taking its place to give greater weight to quality and sustainability. The draft also increases the focus on energy-efficient products. With public procurement accounting for around 15% of EU GDP, the changes would reinforce the EU’s use of public purchasing as a key tool to accelerate sustainability and industrial policy goals.

The EU also adopted the final list of products covered by its deforestation regulation (EUDR), confirming the exclusion of leather, soybean seeds and certain palm oil-derived products, while adding soluble coffee, palm oil-based soap and several oleochemicals from December 2027. The European Commission said excluding leather avoids shifting deforestation to countries where leather is processed, although the move has been criticized for lacking scientific justification. The Commission also introduced updates to the EUDR information system to simplify compliance for smallholder farmers and foresters, with the new rules now entering a two-month scrutiny period before taking effect.

Additionally, the European Parliament’s Environment Committee (ENVI) has backed plans to expand the EU’s Carbon Border Adjustment Mechanism (CBAM) to around 180 downstream steel and aluminum products, while strengthening anti-circumvention measures to close loopholes and improve enforcement. The proposal extends CBAM to products such as machinery, vehicle components and construction equipment to help prevent carbon leakage, while tightening rules on “slightly modified” goods, addressing online import loopholes and allowing the Commission to apply the true country of origin where circumvention is detected. ENVI also rejected the use of Paris Agreement Article 6 carbon credits to meet CBAM obligations and expanded the proposed Temporary Decarbonisation Fund to include fertilizer producers and downstream users, with Parliament expected to adopt its negotiating position in September.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 The Science Based Targets initiative’s (SBTi) updated Corporate Net Zero Standard will, for the first time, recognize companies for addressing ongoing emissions through carbon credits or internal carbon pricing, although achieving its highest “Leadership” status could cost heavy emitters billions of dollars annually. Under the new framework, companies can qualify for three recognition tiers, with Leadership requiring an internal carbon price of at least $80/tCO2e across 100% of emissions and the purchase of carbon credits to match their footprint. Trellis estimates this could cost companies such as Rio Tinto $23 billion, Ford $13 billion and Amazon $3 billion per year, making the top tier financially unrealistic for many firms. The analysis also found that very few companies currently use internal carbon prices that meet the Leadership criteria.

📈 A new report by Currence shows that global climate tech venture capital investment reached $26.1 billion in H1 2026, up 55% year over year and marking the strongest first half since 2022, although deal count fell 25% to a five year low as funding became increasingly concentrated. Low-carbon data centers dominated investment, accounting for 34% of total funding, driven by DayOne’s $4.5 billion and NScale’s $2 billion Series C rounds, while Series C funding hit a record $10.5 billion.

WHAT ARE COMPANIES DOING?

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

🔴 Microsoft reported a 25% increase in emissions in fiscal 2025, driven by the rapid expansion of AI and cloud infrastructure, but reaffirmed its commitment to its 2030 climate goals while acknowledging it needs to evolve its approach. Electricity-related emissions rose sharply from 2% to 13% of the company’s total footprint after Microsoft stopped using non-additional renewable energy certificates in its Scope 2 accounting, while electricity consumption increased 24%. The company said it is adopting a “Community First AI Infrastructure” strategy, disclosed site-level electricity and water data for the first time, expanded its carbon-free energy strategy to include nuclear, geothermal and emerging technologies, and confirmed it remains committed to carbon removal, signing 29 long-term projects expected to deliver more than 45 million tonnes of emissions reductions over the next 30 years.

🐄 World’s largest beef producer, JBS, abandoned its goal to achieve net zero emissions across its value chain by 2040, replacing it with new climate targets focused only on Scope 1 and 2 emissions after acknowledging the difficulty of measuring and reducing emissions across its vast global agricultural supply chain. With Scope 3 emissions accounting for more than 90% of its total footprint, the company said the lack of standardized measurement infrastructure across hundreds of thousands of independent producers made its original target impractical. JBS now aims to reduce Scope 1 and 2 emissions intensity by 30% by 2030 and 70% by 2050, while increasing renewable electricity use to 60% by 2030.

🛩️ Airbus and MTU Aero Engines launched a joint venture to develop and commercialize what they aim to be the first hydrogen fuel cell propulsion system for commercial aircraft, advancing Airbus’ long-term ZEROe program despite delaying its target for a hydrogen-powered aircraft beyond 2035. The new company will combine Airbus’ expertise in hydrogen aircraft and liquid hydrogen systems with MTU’s fuel cell and engine technology to accelerate the development, testing, certification and commercialization of zero-emission propulsion systems, with hydrogen fuel cells producing only water vapor during flight.

🟢 Google, McKinsey, and Tencent signed long-term carbon removal offtake agreements with Thryve.Earth to remove more than 635,000 tonnes of carbon through a new agroforestry project restoring 6,000 hectares of degraded land in Indonesia, marking Google’s largest carbon removal commitment to date and Tencent’s first nature-based offtake outside China. The 10-year agreements include more than 335,000 tonnes of removals by Google and McKinsey through the Symbiosis Coalition and 300,000 tonnes by Tencent.

Solutions

📊 ESG Playbook launched Essential Worksheets and Premium Modules, two new sustainability reporting solutions designed to help small and mid-sized businesses begin and scale their sustainability reporting. The new products share the same data architecture as the company’s Enterprise Platform, allowing organizations to start with individual reporting tools and expand as reporting requirements evolve.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🏦 The European Central Bank (ECB) has started applying a new “climate factor” in its collateral framework, allowing it to reduce the value of corporate bonds pledged by banks based on their exposure to climate transition risks. The climate factor uses forward-looking assessments, including sector exposure, company emissions, transition plans and climate disclosures, meaning banks may be able to borrow less against bonds issued by companies with higher emissions or weaker transition strategies. The ECB said the impact on banks is expected to be limited initially, and noted that the Bank of England is introducing a similar approach.

🇨🇦 Canadian climate-focused investor initiative Business Future Pathways released a draft methodology for Canada’s Sustainable Finance Taxonomy that introduces a new “abatement” category, alongside “green” and “transition,” allowing certain emissions reduction investments in existing oil and gas production to qualify under strict conditions. The proposal, which is open for public consultation until August 13, includes safeguards to prevent carbon lock-in, such as requiring significant emissions reductions, asset retirement plans and company-level transition strategies, although the inclusion of fossil fuel-related activities has already sparked criticism from environmental groups and sustainable finance advocates.

⚡️ TotalEnergies agreed to sell its distributed solar business across seven European countries, including around 170 MW of rooftop solar assets, to Amarenco and AMPYR Distributed Energy as it refocuses its renewables strategy on large utility-scale solar and wind projects. The company said the move reflects its preference for utility-scale developments that offer greater economies of scale and will not affect its renewable growth plans, with 35 GW of installed capacity already in place and a target of exceeding 75 GW by 2030.

📈 TenneT Germany raised €3.5 billion through its inaugural green bond, the largest corporate issuance under the EU’s European Green Bond (EuGB) standard to date, with demand exceeding supply by more than six times. The proceeds will help finance the transmission operator’s planned €67 billion grid expansion by 2030, supporting the integration of renewable energy into Germany’s electricity network in line with the EU Taxonomy and the bloc’s energy transition goals.

⚡️ Quinbrook Infrastructure Partners closed its UK-focused Renewables Impact Fund II at £587 million, exceeding its £500 million target, to invest in renewable energy, storage and grid infrastructure. The fund has already invested in projects including the 373 MW Mallard Pass Solar Project, Aegis Energy, and the Project Norton solar and battery storage facility, reflecting growing investor demand for contracted clean energy infrastructure assets.

M&A

📊 EthiFinance and ESG Book have agreed to merge, aiming to provide a European alternative to US incumbents and address the growing demand for integrated financial and sustainability data. Operating under the EthiFinance brand, the combined company will have more than 300 employees, serve over 500 clients, and provide coverage of more than 10,000 issuers globally. By combining EthiFinance’s credit and sustainability ratings expertise with ESG Book’s sustainability data, analytics and technology platform, the new entity will offer ESG and credit ratings, portfolio analytics, regulatory reporting, benchmarking and supply chain risk management to financial institutions and corporate issuers.

⚡️ EQT acquired US power and AI infrastructure platform Copia Power from Carlyle, gaining a business with more than 30 GW of opportunities across power generation, energy storage and digital infrastructure. EQT said the acquisition strengthens its strategy to invest in infrastructure supporting AI growth, with Copia’s “grid connected campus” model combining renewable and thermal power, storage and data centers to address the growing energy constraints facing AI infrastructure.

🔋 Alpiq acquired a 90% stake in UK battery storage developer Harmony Energy, establishing itself as one of Europe’s leading battery energy storage systems (BESS) players. The acquisition adds around 400 MW of battery storage assets under construction, including a UK project expected to connect to the grid in Q3 2026, alongside a multi-gigawatt development pipeline across the UK, Germany, France and Poland.

Funding rounds

⚡️ Masdar secured $5.1 billion in financing to build what it describes as the world’s first gigascale 24/7 renewable energy project in Abu Dhabi, combining a 5.2 GW solar plant with a 19 GWh battery storage system to deliver 1 GW of continuous clean power. The $6.1 billion project, backed by a consortium of 13 international and local banks, is expected to become operational in 2027.

🟢 OMV secured a €450 million loan from the European Investment Bank (EIB) to help finance one of Europe’s largest green hydrogen plants, a 140 MW facility expected to produce up to 23,000 tonnes of green hydrogen annually. The €600 million project, due to begin operations by the end of 2027, will supply OMV’s Schwechat refinery in Austria, reducing its carbon emissions by around 150,000 tonnes per year, or 10% of its current direct emissions.

⚡️ German fusion startup Proxima Fusion raised a record €411 million in the largest private fusion investment in Europe, with backing from Google, RWE and other investors, valuing the company at nearly €2.5 billion. The funding will support the development of its Alpha stellarator demonstrator near Munich, targeted for the early 2030s.

⚡️ Quaise Energy raised $134 million in the first close of its Series B round to advance Project Obsidian, which it says will become the world’s first commercial superhot geothermal power plant, with electricity expected to reach the grid by 2030. The MIT spinout’s technology uses millimeter-wave drilling to access superhot rock at depths beyond conventional methods.

🟢 Avantium has spun out its CO₂ conversion platform into a new company, Carbeau, which launched with €35.2 million in funding to commercialize electrochemical technology that converts CO₂ into high-value chemical building blocks for renewable materials. Carbeau will develop products such as glycolic acid and compostable plastics, while building its first pilot plant in the Netherlands.

👕 Secondhand fashion marketplace Fleek raised $25 million in a Series B round to expand its platform, which automates the sourcing, grading, and trading of used clothing. The company said its AI model, trained on millions of transactions, has already connected more than 2,000 suppliers with 50,000 buyers across 100+ countries, keeping over 12 million garments in circulation while avoiding an estimated 23,000 tonnes of CO₂ emissions and saving 13 billion liters of water.

🪨 Hephae Energy raised $17.8 million in a Series A funding round to accelerate the commercial deployment of its ultra-high-temperature drilling technology, designed to enable geothermal developers to access deeper and hotter rock. The company said its robotics-based drilling, sensing and control systems are designed to reduce non-productive time and unlock deeper geothermal resources, helping lower the cost of geothermal energy.

⚡️ Permira invested in Quadrante to accelerate its international expansion, particularly in the US, and strengthen its role in supporting the energy transition and critical infrastructure development. Operating in more than 20 countries with over 1,500 employees, Quadrante provides engineering services across renewable energy, power grids, sustainable cities and transport infrastructure.

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