What's Happening in Sustainability & ESG (23.06 - 29.06) 🌎

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:

• Only 19% of executives can quantify the financial impact of sustainability strategies - KPMG study 📑

• London Climate Action Week highlighted London’s growing role as the global center for climate collaboration 🇬🇧

• California proposed to delay the first mandatory corporate emissions reporting deadline from August to November 10 📑

• A French court ordered TotalEnergies to update its vigilance plan within six months to identify and address climate risks linked to Scope 3 emissions 🛢️

• EU member states agreed on a negotiating position to revise the Sustainable Finance Disclosure Regulation (SFDR) 🇪🇺

• and other news 🌍

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

📑 A new KPMG study found that while sustainability is now firmly embedded in corporate strategy, with 72% of executives saying they understand their organization’s sustainability performance and 60% considering it in financial planning, only 19% can quantify its financial impact. As a result, most companies are unable to measure how sustainability affects metrics such as EBITDA, cash flow, capital expenditure, and valuation, creating a disconnect between sustainability initiatives and business value. The report warns that this “valuation gap” could leave risks underpriced and value creation opportunities overlooked, arguing that the next phase of sustainability will depend on stronger financial integration rather than reporting alone.

📑 A GRI analysis of nearly 15,000 listed companies found that 87% published sustainability reports, with 40% using the GRI Standards, while most companies combined multiple reporting frameworks, including 80% of ISSB users also referencing GRI. Although the use of individual frameworks such as GRI, SASB, CDP, and TCFD declined slightly as companies transition to new standards like ESRS, the findings highlight that impact reporting remains central to sustainability disclosure, with the focus shifting toward providing useful, decision relevant information for stakeholders rather than relying on a single reporting framework.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🇬🇧 Record-breaking heat dominated London Climate Action Week, but the event also highlighted London’s growing role as the global center for climate collaboration, attracting around 100,000 participants from business, government, and civil society amid a more challenging political environment in the US. Rather than focusing on new climate pledges, discussions centered on implementation, investment, and practical partnerships, with organizers emphasizing that smaller coalitions can drive progress without global consensus. The event reinforced London’s position as a leading hub for sustainable finance and climate investment, although ongoing political uncertainty serves as a reminder that long-term climate progress cannot rely on government action alone.

📑 The California Air Resources Board (CARB) proposed to delay the first mandatory corporate emissions reporting deadline from August to November 10, giving companies more time as it finalizes limited updates to the state’s climate disclosure rules. The delay follows CARB’s decision to revise and resubmit the regulations for approval, while the reporting framework continues to face legal challenges. Under California’s climate laws, companies with more than $1 billion in revenue will begin reporting Scope 1 and 2 emissions this year, with Scope 3 disclosures required from 2027, while large companies with more than $500 million in revenue must also disclose climate-related financial risks.

📑 The ISSB proposed allowing companies to use TNFD disclosure metrics to meet nature-related reporting requirements and confirmed that its upcoming IFRS Practice Statement on nature disclosures will build on the TNFD framework. The non-mandatory guidance, expected in draft form later this year, aims to reduce fragmentation in nature-related reporting while complementing existing IFRS S1 and S2 standards, with jurisdictions retaining the option to make the Practice Statement mandatory.

🇬🇧 The UK government plans to introduce new regulations requiring companies to ensure their supply chains are not linked to illegal deforestation, with a consultation on mandatory due diligence requirements set to launch later this year. The proposed rules will align closely with the EU Deforestation Regulation (EUDR), covering key commodities such as soy, palm oil, cocoa, and rubber to reduce reporting duplication and improve traceability. The government said the measures are intended to help businesses identify and reduce deforestation risks in their supply chains, with the long-term goal of introducing a fully deforestation-free standard for relevant products.

WHAT ARE COMPANIES DOING?

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

🛢️ A French court ordered TotalEnergies to update its vigilance plan within six months to identify and address climate risks linked to Scope 3 emissions from the use of its oil and gas products, ruling that these emissions must be included in the company’s climate risk assessment. While the court declined to impose emissions reduction targets, production cuts, or a halt to new fossil fuel projects, it found that Scope 3 emissions are inherently linked to TotalEnergies’ activities and must be reflected in its legally required risk management plan. The company said it will update its plan accordingly, while NGOs behind the lawsuit welcomed the decision as a significant step toward strengthening corporate climate accountability.

💧 Microsoft announced that it became water positive in 2025, replenishing more water than it withdrew across its global operations, achieving its 2030 goal five years ahead of schedule. The company also reduced data center water-use intensity by 25% compared to 2022, surpassing the halfway point toward its 40% reduction target by 2030. Microsoft attributed the progress to innovations including zero-water cooling datacenter designs, liquid cooling systems, air cooling technologies, and increased use of recycled and non-potable water, as demand for AI and cloud infrastructure continues to grow.

🟢 Climeworks signed 14 new carbon removal agreements in the first half of 2026, totaling 450,000 tonnes of CO₂ removal across a diversified portfolio of technologies. The deals, spanning sectors including finance, aviation, retail, healthcare, and technology, cover solutions such as direct air capture, biochar, BECCS, enhanced rock weathering, and reforestation, reflecting growing demand from large corporations for high-quality carbon removal portfolios.

🚚 Daimler Truck and hydrogen engine technology company KEYOU partnered to accelerate the commercialization of hydrogen-powered internal combustion engine (H2-ICE) trucks, with the first models expected to launch in 2027. Under the agreement, KEYOU will convert Mercedes-Benz Actros trucks to run on hydrogen combustion engines, creating a 40-tonne truck with a range of up to 650 kilometers.

⛴️ DHL Global Forwarding and wind-powered shipping company VELA partnered to launch a transatlantic cargo service using wind-powered vessels, reducing emissions by up to 99% compared to air freight and up to 90% compared to conventional sea freight. The service will initially operate between France and the US, transporting up to 600 pallets per voyage with a transit time of around 15 days.

Solutions

📊 Clarity AI launched a new asset-level physical climate risk solution to help investors, asset owners, and banks assess exposure to climate-related risks across more than 3 million assets. The platform evaluates 16 climate and nature hazards across multiple climate scenarios and time horizons, providing more granular data to support investment, lending, and risk management decisions.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇪🇺 EU member states agreed on a negotiating position to revise the Sustainable Finance Disclosure Regulation (SFDR), including relaxing proposed rules for the new “Transition” investment category by allowing investment in some fossil fuel companies under certain conditions. Instead of excluding companies developing new fossil fuel projects, the Council proposes requiring fossil fuel companies to allocate at least 20% of capital expenditure to EU Taxonomy-aligned activities and adopt a time-bound strategy to reduce Scope 1 and 2 emissions. The proposal also removes restrictions on some public sector issuances, but has drawn criticism from environmental groups, who argue it weakens the regulation and increases the risk of greenwashing. The Council’s position will now form the basis for negotiations with the European Parliament.

🏦 The European Banking Authority (EBA) finalized new ESG disclosure rules for banks, significantly simplifying reporting requirements while extending ESG reporting obligations to all EU banks for the first time. The updated framework reduces ESG reporting datapoints by 37% for large banks and by 84% for the smallest institutions, introducing proportionate disclosure requirements based on bank size. The rules also remove Green Asset Ratio (GAR) disclosures following the EU Omnibus changes, while continuing to require reporting on climate, environmental, social, and governance risks, fossil fuel exposures, and ESG risk management. The draft standards will now be submitted to the European Commission for adoption.

Funds

📈 Eiffel Investment Group launched its third impact private credit fund, Eiffel Impact Debt III, with €500 million in initial commitments to finance the growth and sustainability transition of mid-sized European companies. The fund targets €1 billion in total commitments and will provide senior debt financing linked to measurable ESG objectives through contractual impact covenants, focusing on climate transition, ecosystem preservation, and diversity.

📈 Impact investment platform Livelihoods launched its fourth carbon fund, targeting €150 million to finance nature-based projects that aim to remove or avoid 7–10 million tonnes of CO₂ over 25 years while improving the livelihoods of 500,000 people. The fund will invest in community-led initiatives such as agroforestry, regenerative agriculture, mangrove restoration, and rural energy, helping companies support climate action beyond their direct operations through measurable nature-based solutions.

M&A

🤝🏻 MSCI acquired climate risk modeling company First Street for $120 million to strengthen its physical climate risk capabilities. The acquisition will combine First Street’s property-level climate risk models with MSCI’s climate and geospatial data, enabling investors, lenders, and companies to better assess the financial impacts of hazards such as floods, wildfires, and extreme heat across more than 2 billion structures worldwide.

🤝🏻 Carbon ratings agency BeZero Carbon acquired AI-powered climate data startup Cedar to strengthen the due diligence capabilities of its carbon markets platform. The acquisition will enhance BeZero’s AI-driven tools for carbon project analysis and investment decisions, with Cedar’s founders joining the company as demand grows for more robust carbon market data and ratings.

🟢 Ballard acquired green hydrogen solutions provider GeoPura in a deal valued at £301 million, aiming to become an integrated hydrogen ecosystem provider. The acquisition combines Ballard’s fuel cell technology with GeoPura’s hydrogen production, storage, logistics, and stationary power solutions, expanding Ballard’s offering to include energy-as-a-service.

Funding rounds

🟢 Swedish green steel producer Stegra confirmed that it secured €1.4 billion in financing to complete construction of its large-scale green steel plant in Boden, Sweden. The facility will use renewable electricity and green hydrogen to produce low-carbon steel, with an annual capacity of 5 million tonnes. The funding provides a major boost to the project after construction slowed while financing was being finalized, with operations expected to begin following a revised project timeline.

🛩️ Amazon invested in biofuels company GranBio to support the development of sustainable aviation fuel (SAF) produced from forestry residues and construction waste. The investment aims to help scale GranBio’s technology, which converts biomass waste into drop-in renewable fuels compatible with existing engines and infrastructure, supporting lower-carbon aviation and transportation while expanding future SAF production in the US.

🟢 The Protein Brewery raised an additional €18 million, bringing its total funding to over €70 million, to scale production and commercialize its fermentation-based protein ingredient, Fermotein, across Europe and new international markets. Produced through a zero-waste brewing process, Fermotein uses significantly less land and water than conventional protein sources.

💧 AquaPoro Technologies raised $5 million in seed funding to scale its atmospheric water generation technology for industrial use. The company’s ALMA™ system is designed to extract water from air across a wider range of humidity and temperature conditions than conventional systems, using a continuous-flow process and on-site energy sources such as waste heat.

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