What's Happening in Sustainability & ESG (14.07 - 20.07) 🌎

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. 🍀

In this edition, we’ll cover:

• What you need to know about the EU’s proposed ETS overhaul 🇪🇺

• Chief sustainability officers are increasingly taking on risk management responsibilities 📑

• SBTi launches readiness assessment service for Corporate Net Zero Standard 2.0 📑

• Deloitte launches tool to measure the financial value of sustainability investments 📊

• Energy companies raised a record $12.6 billion through IPOs in the first half of 2026 ⚡️

• and other news 🌍

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 The European Commission proposed a major overhaul of the EU Emissions Trading System, allowing industries to emit CO₂ for longer while offering more financial support for investment in clean technologies. The ETS is the EU’s biggest climate policy and covers around 40% of the bloc’s emissions, requiring power plants, heavy industries, airlines and shipping companies to buy permits for the CO₂ they emit. The revision aims to extend the system into future decades and align it with the EU’s target of cutting net emissions by 90% by 2040, while responding to pressure from countries and industries that say rising carbon costs are weakening European competitiveness.

The Commission proposed slowing the rate at which the ETS emissions cap declines, reducing the annual reduction rate from 4.3% today to 3.7% from 2031 and 1.7% from 2036. It would also halve the rate at which the Market Stability Reserve adds or removes permits from the market from 24% to 12%, meaning more CO₂ permits would remain available in future years. Heavy industries would continue receiving free permits until 2038 rather than 2034, while the full phase-in of the EU’s carbon border levy would also be delayed until 2038. These changes would give sectors such as steel, cement and chemicals more time to cut emissions.

However, the free permits would come with new conditions. From 2031, companies would receive 80% of their free allowances after submitting credible plans to invest in decarbonisation in Europe, with the remaining 20% released once those investments are delivered. Companies would also have to invest at least the equivalent financial value of the permits they receive, while failure to meet the conditions could result in permits being withdrawn. The proposal would also direct more ETS revenue towards industrial decarbonisation, including a €30 billion investment fund and a further €70 billion from 2031, while expanding the system to cover waste incineration, smaller ships and more international flights. Overall, the package gives industry more time and financial support, but ties that support more closely to real decarbonisation investment.

⚡️ The European Commission also unveiled a new Electrification Action Plan aimed at doubling electricity’s share of the EU’s final energy consumption from 23% today to an indicative 46% by 2040, aiming to reduce reliance on imported fossil fuels and strengthen competitiveness. The plan includes measures to lower electricity prices, modernize grids, accelerate the rollout of heat pumps and EV charging infrastructure, support industrial electrification, and develop electrification skills. According to the Commission, reaching the 2040 target could reduce the EU’s fossil fuel import bill by €260 billion per year.

📑 Additionally, the European Commission opened infringement procedures against multiple EU member states for failing to fully transpose 15 EU directives into national law, covering areas including labour migration, asylum, environmental crime, energy performance of buildings, financial markets, equality, hazardous substances and internal market resilience. The Commission has sent letters of formal notice, giving the affected countries two months to complete implementation before it may issue reasoned opinions. Among the most significant cases, all 27 member states were notified for failing to fully implement the revised Energy Performance of Buildings Directive, while 23 countries were cited for not transposing new rules to strengthen penalties for serious environmental crimes.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 Chief sustainability officers (CSOs) are increasingly taking on risk management responsibilities, with 62% identifying regulatory, supply chain and climate risk mitigation as the primary way sustainability creates business value, according to a new Weinreb Group survey. The survey also found that customer and business partner pressure remains the biggest driver of sustainability strategy, while more CSOs are expanding their responsibilities beyond sustainability, even as the number of CSOs at US public companies declined by 10% over the past year.

📑 SBTi Services launched a new Readiness Assessment Service to help companies evaluate how prepared their existing science-based targets are for the Corporate Net Zero Standard Version 2.0. The service provides companies with a structured assessment of their current targets, identifies the steps needed to achieve validation under the new standard, and aims to support a smoother transition ahead of Version 2.0 becoming mandatory in 2028.

🇰🇷 South Korea has significantly expanded the scope of its mandatory sustainability reporting regime, requiring more than 290 large listed companies to begin ISSB-aligned reporting in 2028, with the requirements extending to more than 3,100 companies in 2029. The finalized roadmap lowers the reporting threshold from the initially proposed KRW 30 trillion ($20 billion) in assets to KRW 10 trillion ($6.7 billion) in 2028 and KRW 5 trillion ($3.3 billion) the following year, with a further reduction under consideration from 2030.

🇺🇸 New York has become the first US state to impose a one-year moratorium on the construction of large data centers, citing concerns over rising electricity costs, water use and impacts on local communities. The ban applies to new data centers with power demand of 50 MW or more while the state develops environmental standards for future projects. Governor Kathy Hochul also plans to repeal tax exemptions for hyperscale data centers, marking a significant shift in how states are responding to the rapid expansion of AI infrastructure.

🇦🇺 Australia plans to strengthen its modern slavery laws by introducing criminal liability for large companies that fail to prevent modern slavery in their supply chains, unless they can demonstrate they took reasonable steps to address the risk. The reforms will also introduce civil penalties for non-compliance with existing reporting obligations and come amid pressure from the US, which recently criticized Australia’s enforcement of forced labor rules.

WHAT ARE COMPANIES DOING?

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

🟢 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.

🛩️ Delta Air Lines and Shell Aviation signed a five-year agreement to expand the supply and infrastructure for sustainable aviation fuel (SAF) across key US airports. The partnership will increase SAF availability at major hubs including Los Angeles, New York JFK and Boston, while developing the logistics, blending and distribution infrastructure needed to integrate SAF into routine operations. The companies will also collaborate on next-generation SAF technologies, including alcohol to jet and power-to-liquid fuels, to help expand supply and reduce aviation emissions.

🌾 Walmart, General Mills and ADM launched a new collaboration to accelerate regenerative agriculture across 40,000 wheat acres in the US Midwest, helping farmers adopt practices that improve soil health, water quality and carbon sequestration. Building on Walmart and General Mills’ 2023 initiative targeting 600,000 acres by 2030, the program will provide farmers with technical support and financial incentives to implement practices such as no-till and cover cropping.

Solutions

📊 Deloitte launched Sustainability Fusion, a new framework, tool, and service offering designed to help organizations measure and communicate the financial value of sustainability investments. The solution enables companies to evaluate sustainability initiatives using financial metrics such as cost, revenue, and risk, translate environmental impacts into cash flow effects, and prioritize investments based on business value. Developed in collaboration with the Aspen Institute, the framework aims to help organizations better align sustainability goals with financial performance and decision-making.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

⚡️ Energy companies raised a record $12.6 billion through IPOs in the first half of 2026, as investors seek to capitalize on surging power demand driven by AI data centers. The fundraising boom is driving investments in power generation, grid infrastructure, nuclear and geothermal energy, as companies race to expand the energy capacity needed to support AI growth. Despite strong investor demand, however, many newly listed energy companies have struggled to maintain their share prices after going public.

📈 The UN-backed Green Climate Fund (GCF) increased its capacity to finance new climate projects by $4 billion through a new balance sheet management approach, raising available funding to $5.65 billion over the next two years. The change reduces the amount of capital held in reserve, enabling greater investment in climate mitigation and adaptation projects in developing countries, with the GCF estimating the additional funding could unlock at least $16 billion in total climate investments through co-financing.

🏦 Deutsche Bank and the World Bank’s Multilateral Investment Guarantee Agency (MIGA) launched a $1 billion trade finance platform to expand access to financing in frontier and emerging markets. Under the partnership, MIGA will provide guarantees to reduce trade finance risks for Deutsche Bank, supporting transactions through state-owned banks and increasing financing for priority sectors including SMEs, agriculture, health and water in developing economies.

📈 Nuveen and CalSTRS formed a strategic partnership under which CalSTRS will commit up to $2 billion to sustainable infrastructure investments, serving as an anchor investor in Nuveen’s Energy & Power Infrastructure Credit Fund II. The partnership will finance renewable energy, energy storage, industrial decarbonization, energy efficiency and circular economy projects, while also supporting AI infrastructure, domestic manufacturing and the electrification of the economy.

M&A

⚡️ Shell agreed to sell its 5 GW renewable energy platform Sprng Energy to Aditya Birla Renewables (ABREN) in a $1.8 billion deal. The transaction supports Shell’s strategy to rebalance its power portfolio toward higher-return assets, while expanding ABREN’s renewable capacity to 9.3 GW, positioning it among India’s largest renewable energy developers.

⚡️ BlackRock’s Global Infrastructure Partners (GIP) acquired a controlling stake in US commercial solar company Summit Ridge Energy, one of the country’s largest distributed solar and battery storage developers. The acquisition will support the expansion of Summit Ridge’s 3 GW solar and storage pipeline, as rising electricity demand and growing focus on energy security drive investment in distributed clean energy infrastructure.

📊 Supply chain decarbonization software company Green Project Technologies acquired enterprise carbon accounting provider Optera to create an end-to-end climate management platform. The combined platform will integrate Optera’s enterprise carbon accounting and reporting capabilities with Green Project Technologies’ supplier engagement, compliance reporting and decarbonization solutions, helping companies address growing regulatory requirements such as the EU’s CSRD and CBAM and California’s SB 253.

🟢 UK direct air capture (DAC) company Airhive acquired Dutch DAC developer Carbyon to create a European carbon removal leader, combining their complementary technologies to accelerate the deployment of low-cost DAC solutions. The merged company will develop next-generation carbon capture technology while advancing projects for both carbon storage and utilization, including a pilot with Coca-Cola Europacific Partners to supply low-carbon CO₂ for beverage production.

🛢️ BP agreed to sell the majority of its venture capital portfolio to growth investor Verdane, as part of its strategy to simplify its business and refocus capital allocation. The deal includes minority stakes in more than 10 technology companies focused on energy digitalization and decarbonization, following BP’s broader strategic shift toward increasing investment in oil and gas while reducing spending on low-carbon energy.

Funding rounds

🌾 Agri-tech startup Rize raised $31 million in a Series B funding round to scale its platform that helps rice farmers reduce methane emissions, improve yields and adopt more sustainable cultivation practices. The funding will support the expansion of Rize’s traceability, carbon certification and low-emissions rice farming platform across Southeast Asia, with the company targeting 300,000 hectares and 150,000 farmers by 2030.

👕 Circular textile recycling startup Syntetica raised $30 million in a Series A funding round to commercialize its technology for recycling mixed nylon textile waste into new nylon materials. The funding will support the construction of the company’s first commercial demonstration facility in France, helping scale the recycling of post-consumer nylon.

🏗️ NeoCem raised €17 million from Crédit Mutuel Impact to scale production of its low-carbon cement technology. The funding will support the expansion of its manufacturing capacity and accelerate the deployment of a solution that can reduce cement-related CO₂ emissions by up to 90%.

⚡️ Energy simulation software provider Gridcog raised $10 million in a Series A funding round to scale its platform for modeling and optimizing renewable energy, battery storage and hybrid energy projects. Led by ABB, the funding will support the expansion of Gridcog’s energy flexibility platform as growing renewable deployment and grid constraints increase demand for more advanced energy system modeling.

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