What's Happening in Sustainability & ESG (12.05 - 18.05) 🌎

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:

• The ISSB expects at least 10 more jurisdictions to adopt its sustainability disclosure standards this year 📑

• Europe became the top global region for climate-tech VC funding in Q1 2026, attracting $6.6 billion in investment 🇪🇺

• Companies expect extreme weather events such as flooding, cyclones, and heavy rain to drive nearly $900 billion in financial losses, says CDP 📑

• NextEra Energy agreed to acquire Dominion Energy in a roughly $67 billion deal; Fervo Energy raised $1.89 billion in an upsized IPO ⚡️

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

📑 From ISSB expansion to stricter enforcement in Europe and reporting simplification efforts in Australia, sustainability reporting rules continue to evolve globally. Here are the latest developments:

The ISSB expects at least 10 more jurisdictions to adopt its sustainability disclosure standards this year, according to Chair Emmanuel Faber. The organization said more than 50 jurisdictions are expected to use or commit to the ISSB standards as their reporting baseline by next year, including countries such as Peru, Ethiopia, and Oman. Faber also highlighted the growing role of “passporting” initiatives aimed at improving global comparability and adoption of sustainability disclosures.

Australia proposed major changes to its corporate reporting rules, including raising the threshold for mandatory audited financial and sustainability reporting to exempt companies with under A$100 million in revenue and A$50 million in assets. The reforms, unveiled in the 2026 Budget, aim to reduce compliance costs and simplify climate reporting requirements, particularly for smaller businesses. The government said the broader regulatory package could cut annual compliance burdens by A$10.2 billion once fully implemented.

European regulators took enforcement action against more than 100 companies over sustainability reporting issues in 2025, according to ESMA. Supervisors reviewed 367 sustainability statements under the NFRD and CSRD, with 30% resulting in corrective actions, most commonly related to climate disclosures. At the same time, new research found companies are increasingly identifying negative workforce-related impacts under the EU’s S1 reporting standard, particularly around issues such as gender pay gaps and workplace safety.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📈 Europe became the top global region for climate-tech VC funding in Q1 2026, attracting $6.6 billion in investment, surpassing North America by 20% and more than tripling Asia’s total, according to PitchBook. Funding, however, is becoming increasingly concentrated in a handful of mega-deals, with Europe accounting for only three climate-tech rounds above $1 billion last quarter: Low Carbon Materials ($1.5 billion), Cloover ($1.2 billion), and Kraken Technologies ($1 billion), which together represented more than half of Europe’s total climate-tech funding. Despite lower deal counts, the sector continues to benefit from strong tailwinds, including Europe’s push for energy independence amid geopolitical tensions and growing demand for AI-driven energy optimization technologies. However, ongoing global instability and supply chain disruptions are creating challenges for hardware-intensive climate-tech companies by increasing costs and operational uncertainty.

📑 Companies expect extreme weather events such as flooding, cyclones, and heavy rain to drive nearly $900 billion in financial losses, according to a new CDP report based on disclosures from more than 11,000 companies. Flooding alone could account for $528 billion in losses, with impacts including reduced production capacity, asset impairments, supply chain disruptions, and rising costs, while nearly half of the identified risks are expected within the next two years. CDP found that mitigation costs are nearly 13 times lower than projected damages, yet only 35% of companies currently view extreme weather as a financially material risk.

📑 Two new academic studies suggest that while corporate net zero and carbon credit programs remain imperfect, they are still contributing to real climate progress. A Nature study found most REDD+ forest carbon projects helped avoid deforestation despite criticism over overstated carbon benefits, while a Grantham Research Institute paper found companies with long term net zero targets tended to reduce emissions more over time than firms without targets, even if short term impacts were limited. Researchers argued that corporate climate efforts are neither purely symbolic nor immediately transformative, but part of a gradual organizational shift driving emissions reductions and conservation outcomes.

🌍 China, Brazil, and the European Commission launched the Open Coalition on Compliance Carbon Markets, a new initiative aimed at strengthening international cooperation on carbon pricing and emissions trading systems. The coalition will focus on promoting best practices, improving transparency and carbon accounting standards, and advancing carbon pricing as a cost-effective decarbonization tool. The initiative is open to countries with national carbon pricing schemes, with Germany and New Zealand joining as the first additional members.

WHAT ARE COMPANIES DOING?

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

⚡️ NextEra Energy agreed to acquire Dominion Energy in a roughly $67 billion deal, creating one of the largest utility companies in the US amid surging electricity demand driven by AI and data centers. The combined company will own 110 GW of generation capacity across renewables, battery storage, gas, and nuclear, while serving around 10 million utility customers across four US states. The deal also reflects a broader industry shift toward an “all of the above” energy strategy combining renewables, gas, and large-scale infrastructure expansion.

⚡️ Geothermal company Fervo Energy raised $1.89 billion in an upsized IPO, valuing the company at roughly $7.7 billion amid strong investor demand for reliable clean energy infrastructure. The company develops enhanced geothermal systems capable of delivering 24/7 carbon-free power and is benefiting from rising electricity demand tied to AI data centers and electrification. Fervo has already signed more than 658 MW of power agreements with companies including Google and Shell.

🔋 Ford launched Ford Energy, a new battery energy storage systems (BESS) business focused on providing energy storage solutions for utilities, data centers, and industrial customers in the US. The new unit repurposes Ford’s existing battery manufacturing capacity to address rising demand for grid resilience and AI-driven power needs, with systems to be assembled at a dedicated 4 million square foot facility in Kentucky. Ford plans to invest around $2 billion over the next two years, target annual deployments of at least 20 GWh, and begin customer deliveries in late 2027.

👕 Target signed a new agreement with textile recycling startup Syre to source textile-to-textile recycled polyester and scale circular materials across its apparel and home products. The partnership aims to enable the use of 70,000 metric tons of recycled polyester from end-of-life textiles, with broader product integration expected by 2030.

🛩️ DHL Express signed a 10-year agreement with SAF One to purchase 250,000 metric tons of sustainable aviation fuel, marking DHL’s first SAF offtake deal in the Middle East. Starting in 2028, SAF One will supply fuel from its Bahrain facility to support DHL’s emissions reduction goals and its target to reach 30% SAF usage by 2030.

🛩️ Swiss International Air Lines partnered with aviation technology startup Metafuels to support the development and scale-up of synthetic sustainable aviation fuel solutions. Metafuels produces e-SAF using captured CO₂ and green hydrogen through its “aerobrew” process, aiming to make synthetic jet fuel cost-competitive with conventional aviation fuel.

Solutions

📊 UL Solutions launched a new software tool to help companies calculate product carbon footprints (PCF) and improve supplier data quality for Scope 3 emissions reporting. Integrated into its ULTRUS UL 360 ESG platform, the AI-powered solution enables companies to interpret supplier data, calculate cradle-to-gate PCFs aligned with the GHG Protocol, identify data gaps, and integrate product-level emissions into reporting workflows.

📊 Bureau Veritas’ AITrack platform launched Supply Chain Engagement, a new solution designed to help companies collect, validate, and integrate supplier emissions data into sustainability reporting and procurement decisions. The tool enables companies to gather supplier-specific LCAs, environmental product declarations, and product carbon footprints, while also giving suppliers tools to calculate their own impacts.

🟢 ABB deployed Unravel Carbon’s AI-powered Product Carbon Footprint (PCF) Agent to enable R&D teams to calculate real-time emissions data for low-voltage motors during the product design process. The system analyzes bills of materials, supplier inputs, energy data, and manufacturing specifications to generate audit-ready PCFs in around 15 minutes, compared to weeks under traditional approaches. ABB said the initiative allows engineers to evaluate carbon impact alongside cost and performance while supporting growing regulatory and procurement requirements linked to CSRD, CBAM, and digital product passports.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🏦 HSBC launched a new $4 billion Sustainability and Transition Credit Facility to help China-based clean energy and low-carbon companies expand internationally. The financing will support sectors including renewable energy, transport electrification, AI, and data centers, while offering streamlined approvals and tailored financing solutions.

📈 S2G Investments closed its $1 billion Solutions Fund I to back growth-stage companies focused on making food, agriculture, energy, and ocean systems more resilient and efficient. The fund targets businesses in North America and Europe working on areas such as energy infrastructure, maritime transport, industrial electrification, and agricultural technologies.

📈 Lightrock raised $500 million for Accelerate7, a new fund focused on expanding access to clean energy and sustainable energy solutions across Sub-Saharan Africa, South Asia, and Southeast Asia. The fund will invest in growth-stage companies working in areas including electricity access, clean cooking, electric mobility, and energy storage, with initial investments ranging from $10 million to $50 million.

📈 Carbon Equity launched Energy Transition Debt Fund I, a new fund enabling investors to finance European energy transition infrastructure through private debt. The fund will invest in loans supporting projects such as solar, wind, battery storage, biomethane, and EV charging, with a minimum investment threshold of €100,000 and a target raise of €15 million.

Startup funding rounds

⚡️ Sunraycer Renewables secured $901 million in financing to support three solar and battery storage projects in Texas. The projects will deliver nearly 480 MW of solar capacity and 236.5 MW of battery storage, aimed at meeting rising electricity demand driven by manufacturing growth and AI-related data center expansion across the ERCOT grid.

⚡️ Fintech startup Crux secured a $500 million debt financing facility from Nuveen to expand its role in clean energy financing and tax-driven investment strategies. Founded in 2023, Crux provides capital markets solutions for clean energy projects, including tax credits, debt, and tax equity.

⚡️ French clean energy startup Mantle8 raised €31 million to scale its natural hydrogen exploration technology platform. The company develops geoscience and imaging technologies to identify naturally occurring underground hydrogen reservoirs, aiming to provide low-cost, clean hydrogen with projected production costs as low as €0.80 per kg.

💧 Water-tech startup Crew Carbon raised $25 million in Series A funding to scale its wastewater treatment optimization and carbon removal technology. The company’s solution integrates into wastewater facilities to improve treatment efficiency while permanently removing CO₂ through accelerated mineral weathering, without requiring major new infrastructure

🌊 Marine infrastructure startup ECOncrete raised $14 million to scale its biodiversity-focused concrete technology for coastal and offshore projects. The company develops nature-inclusive concrete solutions designed to improve marine biodiversity and climate resilience across infrastructure such as seawalls, ports, offshore wind projects, and subsea systems.

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