What's Happening in Sustainability & ESG (09.06 - 15.06) 🌎

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. 🍀

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In this edition, we’ll cover:

• What you need to know about SBTi’s new revised standard 📑

• CDP announced a major restructuring and investment from PE, creating two separate but connected organizations 📑

• EFRAG estimates that the number of non-EU companies subject to the EU’s CSRD will fall by around 88%, from around 10,000 to 1,200 companies 🇪🇺

• American Airlines and Google signed the largest announced SAF certificate agreement between an airline and a corporate end-user 🛩️

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

📑 The Science Based Targets initiative (SBTi) released Corporate Net-Zero Standard Version 2.0, introducing a major shift from strict target achievement toward a new “best-efforts” framework. Under the updated approach, companies can remain compliant even if they miss targets, provided they demonstrate that they have used all available levers to reduce emissions, are transparent about barriers beyond their control, and show how they are addressing those challenges over time. The update aligns with SBTi’s broader strategy of supporting implementation, not just target setting and validation.

The new standard introduces a more flexible, context-based approach to corporate climate targets. Companies are categorized based on size and national context, with stricter requirements applying to larger firms and those in higher-income countries. While all companies must set near-term Scope 1 and 2 targets, only larger companies are required to set near-term Scope 3 targets, disclose transition plans, and provide assurance on baseline emissions data.

The standard separates Scope 1 and Scope 2 emissions targets, requiring companies to address operational emissions directly rather than relying solely on renewable energy certificates to achieve combined goals. For Scope 3 emissions, the previous requirement to cover at least 67% of emissions has been replaced with a more targeted approach requiring companies to address every emissions source contributing more than 5% of total Scope 3 emissions, with the expectation that all Scope 3 emissions will eventually be covered.

The new approach encourages companies to reduce electricity consumption, source low-carbon power through direct connections and contracts, and support low-carbon energy projects in the same region where electricity is consumed. Companies can continue reporting annual matching of electricity consumption with low-carbon energy sources rather than requiring hourly matching, although firms consuming more than 10 GW of electricity annually will be asked to disclose hourly matching data. The decision has been welcomed by many corporate buyers for providing clarity and preserving the role of power purchase agreements (PPAs) and renewable energy certificates (RECs), but it has also drawn criticism from environmental groups, while differing approaches between SBTi and the GHG Protocol have raised concerns about the need for greater consistency in corporate climate accounting rules.

Another major addition is the introduction of an implementation hierarchy and the new Ongoing Emissions Responsibility (OER) framework. Companies are encouraged to prioritize direct emissions reductions first, followed by actions within shared systems and broader sector-level interventions. The voluntary OER framework recognizes companies that fund emissions reductions or removals beyond their value chains, although support for carbon removals will become mandatory for larger companies after 2035, with firms expected to neutralize 100% of residual emissions by their net-zero target year. SBTi said the revised standard is designed to give businesses greater flexibility while maintaining scientific integrity and accelerating real-world decarbonization.

The revised standard also clarifies the role of carbon credits and certificates. Rather than acting as traditional offsets, they can be used to address hard-to-abate value chain emissions through activity-linked certificates, to neutralize residual emissions using high-quality carbon removals, and to voluntarily take responsibility for ongoing emissions. From 2035, companies will be required to purchase durable carbon removals equivalent to at least 10% of residual emissions, rising to 100% by their net-zero target year. The new standard will take effect in February 2027, although companies can begin adopting some of its provisions earlier.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 CDP announced a major restructuring and investment from private equity firm Permira, creating two separate but connected organizations. The new structure will split CDP into a commercial business, focused on operating its environmental disclosure platform and data products, and the independent charitable CDP Foundation, which will focus on advancing science-led environmental disclosure and developing new reporting frameworks.

Permira’s investment will support the growth and modernization of CDP’s commercial operations, including investments in technology, innovation, and user experience. The firm said the funding will help improve the disclosure process for companies while enhancing the quality of environmental data and insights used by investors, businesses, and other stakeholders to assess risks, resilience, and sustainability performance. More than 22,000 companies disclosed through CDP’s platform in 2025.

The CDP Foundation will continue to guide the evolution of disclosure standards while remaining a shareholder in the commercial entity. Funding from the transaction will support research and innovation in emerging areas such as oceans and plastics, while ensuring that science-led principles continue to shape CDP’s disclosure framework. Permira described the investment as part of its Energy Transition strategy, reflecting the growing importance of trusted environmental data in shaping business and investment decisions.

🇪🇺 EFRAG estimates that the number of non-EU companies subject to the EU’s CSRD will fall by around 88%, from approximately 10,000 to 1,200 companies, following the EU’s Omnibus simplification reforms. EFRAG has resumed work on the Non-EU European Sustainability Reporting Standards (N-ESRS) and plans to release a draft for consultation in July. The revised CSRD scope raises the thresholds for non-EU companies, significantly reducing reporting obligations, while the new N-ESRS will focus on sustainability impacts rather than the broader impacts, risks, and opportunities approach required for EU companies. EFRAG aims to finalize its technical advice and submit it to the European Commission by January 2027.

EU member states have also agreed on proposed changes to the CBAM, supporting an expansion of the carbon tax to a broader range of downstream products than originally proposed by the European Commission. The move aims to prevent carbon leakage by reducing the risk of production shifting from EU manufacturers to countries with weaker climate policies. The proposal would add more metal-intensive industrial, construction, machinery, and electrical equipment products to CBAM, while also introducing annual reviews to assess further scope expansion. The Council’s position will now form the basis for negotiations with the European Parliament, with the Commission welcoming the agreement as a step toward strengthening CBAM’s role in supporting the EU’s climate and industrial objectives.

WHAT ARE COMPANIES DOING?

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

✈️ American Airlines and Google signed the largest announced sustainable aviation fuel (SAF) certificate agreement between an airline and corporate end-user, covering 35 million gallons of sustainable aviation fuel over three years and enabling nearly 300,000 metric tons of CO₂e reductions. American will purchase and use the physical SAF at Chicago O’Hare, while Google will receive the environmental benefits through the SAFc Registry to address emissions from employee business travel.

In related SAF news, Airbus, Technip Energies, Safran, and Tereos agreed to launch a joint venture to develop a large-scale SAF production project at the Port of Dunkirk in Northern France. The facility is expected to produce 160,000 tons of SAF per year, making it one of the largest projects of its kind in Europe. The project will use the Alcohol-to-Jet pathway, converting advanced ethanol from agricultural and forestry residues into drop-in aviation fuel.

🟢 Amazon expanded its carbon credit service to the UK, marking the first international rollout of the program launched in the US last year. Available to Amazon suppliers, enterprise customers, and Climate Pledge signatories, the service provides access to high-quality carbon neutralization and inset credits to help companies address residual emissions and meet climate goals. The program offers credits from projects including methane abatement, forest protection and restoration, direct air capture, and lower-carbon fuels.

🌱 Microsoft signed a multi-year carbon removal agreement with India-based climate tech startup Alt Carbon for 36,920 tons of CO₂ removal credits from its enhanced rock weathering project in Darjeeling. The deal marks Microsoft’s first enhanced rock weathering carbon credit purchase in Asia and supports Alt Carbon’s efforts to scale carbon removal while improving soil health and crop yields for local farmers.

Solutions

📊 Workiva launched its Sustainability Disclosure Agent, an AI-powered tool that helps companies identify reporting gaps, align disclosures with evolving sustainability standards such as ESRS and IFRS S1/S2, and generate draft disclosures. The solution automates the comparison of existing reports against reporting requirements, highlights missing information, and recommends next steps, helping sustainability teams streamline compliance in an increasingly complex reporting landscape.

📊 osapiens and GreenDot launched a partnership to deliver an AI-powered Extended Producer Responsibility (EPR) solution designed to help companies comply with the EU’s new Packaging and Packaging Waste Regulation (PPWR). The solution combines GreenDot’s expertise in packaging compliance and producer responsibility schemes with the osapiens HUB platform to automate packaging data collection, calculate EPR obligations across European markets, optimize fee structures, and manage country-specific reporting requirements.

🔎 S&P Global Sustainable1 launched a new UN Global Compact (UNGC) Screening Dataset to help investors, banks, and companies assess alignment with the UNGC’s principles on human rights, labor, environment, and anti-corruption. Covering approximately 16,500 companies, the AI-powered solution combines controversy monitoring and business involvement screening to identify sustainability risks, enabling users to strengthen risk oversight, portfolio management, and corporate engagement.

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EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇺🇸 New York City’s five public pension systems have launched a search for asset managers to oversee the majority of their $127 billion public equity portfolio, as existing indexing contracts expire in 2026. The process follows growing scrutiny of major managers’ alignment with the pension funds’ net-zero strategy, which targets net-zero financed emissions by 2040 and requires asset managers to submit decarbonization plans.

The move comes after former Comptroller Brad Lander recommended ending mandates with BlackRock, Fidelity, and PanAgora over concerns about their climate commitments. While BlackRock and Fidelity were recently deemed insufficiently aligned with the funds’ net-zero expectations, the new bidding process does not exclude them, allowing all firms to compete for mandates covering traditional index strategies as well as ESG and low-carbon portfolios.

M&A

📊 Safety and operational risk management software provider Novara acquired AI-powered sustainability platform Ensogo to strengthen its AI capabilities, sustainability offerings, and global reach. The deal combines Ensogo’s expertise in ESG reporting, carbon accounting, and sustainability intelligence with Novara’s operational risk and safety platform.

Funding rounds

⚡️ Cypress Creek Energy secured $3.5 billion in financing to develop the first two phases of its Steel River Energy Center in Arkansas, one of the largest solar and battery storage projects in the US. The project will deliver up to 1.63 GW of solar capacity and 1.9 GW of battery storage in its initial phases, with total planned capacity reaching 2.45 GW of solar and 2.9 GW of storage by 2029.

⚡️ Endurance Energy, a geothermal startup founded by a former SpaceX engineer, raised $54 million to develop offshore geothermal power plants. The company aims to tap geothermal resources beneath the Pacific Ring of Fire, using ocean-based infrastructure to deliver large-scale, 24/7 renewable power for growing electricity demand from AI, EVs, and industry.

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