What's Happening in Sustainability & ESG (25.02 - 03.03) 🌎

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:

• Key insights from Economist Impact Sustainability Week 📑

• California approved its climate rule, requiring thousands of companies to report greenhouse gas emissions and climate-related financial risks 🇺🇸

• The UK government released finalized UK Sustainability Reporting Standards (UK SRS) 🇬🇧

• A survey of German companies found that 75% of firms removed from the CSRD scope still plan to publish voluntary reports 📑

• The Net Zero Asset Managers (NZAM) initiative relaunched with more than 250 asset managers 📈

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

Our team is on the ground this week at Economist Impact Sustainability Week in London (2–4 March), where we gathered several early insights from the discussions and panels. Here are some of the key takeaways:

AI adoption in sustainability remains early, with reporting as the main use case

AI dominated the conversations at Economist Impact Sustainability Week, but most companies are still in the early stages of applying it to sustainability. Current use cases focus primarily on data management, analytics, and reporting automation rather than operational transformation. One example shared by one of the speakers suggested that AI tools are already shortening sustainability reporting cycles from around six months to roughly four months. Beyond reporting, however, many organizations are still experimenting and struggling to clearly articulate how AI will be used across sustainability use cases.

Sustainable finance reframed as competitiveness and resilience play

Chuka Umunna, Global Head of Corporate Governance & Sustainable Solutions at JP Morgan, argued that geopolitics and energy security are reshaping sustainable finance rather than weakening it. He noted that the economic model underpinning Western markets for decades, based on cheap Russian energy, Chinese exports, and US security guarantees, has fractured, pushing investors to view sustainability and the energy transition through the lenses of economic competitiveness, national security, and strategic autonomy. As a result, investors are starting to evaluate opportunities not just as climate solutions but also as resilience and security plays. For example, JP Morgan identified over 140 listed companies that both contribute to the energy transition and strengthen national security resilience, making them more investable.

Umunna also emphasized that capital availability for sustainability remains strong. Around $3.9 trillion is currently invested in sustainable-focused public funds, higher than during the previous peak. At the same time, large private capital pools continue to deploy billions into the energy transition, including major funds from firms such as EQT, Brookfield, and Blackstone. However, investors are becoming more selective, prioritizing proven technologies, commercial traction, strong management teams, and long-term contracts over early-stage “science projects.”

Carbon removal is gaining traction among corporates and solution providers

Carbon dioxide removal emerged as one of the most active and commercially interesting areas across the exhibition floor. Numerous project developers, intermediaries, and marketplace platforms were present, and corporate buyers showed interest in exploring CDR options. Unlike some sustainability areas facing political pushback, carbon removal appears to be gaining momentum as companies look for measurable and immediate climate impact. Recent corporate investments reflect this trend, including new carbon removal projects backed by the LEGO Group across both nature-based and technological pathways.

Global supply chains are becoming about managing dependencies, not eliminating them

Supply chain resilience was another key theme during the discussions. Thomas Becker, Vice President for Sustainability and Mobility Strategy at BMW Group, argued that despite growing political rhetoric around supply chain independence or regionalization, true independence is unrealistic for large global manufacturers. Modern products, such as cars, rely on highly complex international supply chains for materials, components, and technologies. According to Becker, the real challenge for companies is not eliminating dependencies but managing them. As geopolitical tensions rise, navigating trade restrictions, political risks, and regulatory fragmentation is becoming an increasingly significant strategic burden for global businesses.

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🌎 California approved the adoption of the California Greenhouse Gas Reporting and Climate Financial Risk Disclosure Initial Regulation, a new law requiring thousands of companies to report greenhouse gas emissions and climate-related financial risks. Companies with over $1 billion in revenue must disclose Scope 1, 2, and eventually Scope 3 emissions under SB 253, while firms above $500 million must report climate risk under SB 261. First emissions disclosures are due August 10, 2026, with Scope 3 reporting starting in 2027, although climate risk reporting remains voluntary for now due to ongoing legal challenges.

🇬🇧 The UK government released finalized UK Sustainability Reporting Standards (UK SRS), aligned with the IFRS Foundation’s ISSB standards to standardize corporate sustainability and climate disclosures. The voluntary standards include UK SRS S1 and S2, mirroring IFRS S1 and S2, but remove fixed timelines for transitional reliefs such as Scope 3 emissions reporting and climate-first reporting. The FCA is consulting on requiring listed companies to adopt the standards, while the government may later mandate them for private firms as part of broader corporate reporting reforms.

📊 A survey of German companies found that 75% of firms removed from the CSRD scope still plan to publish voluntary reports. Among them, 52% already reported previously and intend to continue, while 48% plan to publish their first report. However, the EU Omnibus changes appear to have slowed reporting processes and reduced ambition among both in-scope and descoped firms, despite continued interest in voluntary frameworks such as ESRS and VSME.

🌫️ A study of 1,000 companies found major gaps in corporate reporting on air pollution despite widespread sustainability disclosures. While 91% publish sustainability reports, fewer than 40% mention specific pollutants, and under one-third provide quantitative emissions data. Reporting of key pollutants such as NOx, SOx, and particulate matter is limited, though firms using GRI standards disclose more detailed information.

WHAT ARE COMPANIES DOING?

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

📡 Deutsche Telekom said it achieved company-wide climate neutrality across its operations, reaching its target of net zero Scope 1 and 2 emissions by 2025. The company reduced global emissions by more than 94% since 2017, cutting around 28 million tons of CO₂, with the remaining 6% offset through sequestration projects. Key actions included renewable electricity PPAs, energy efficiency upgrades, battery storage, e-mobility for its fleet, and building modernization.

🧱 The LEGO Group expanded its carbon removal portfolio with new investments across nature-based and technology-based projects. The company committed $2.8 million to four initiatives, including tropical forest restoration in Mexico and technology projects such as biomass geological storage, mineralization that converts CO₂ into building materials, and marine carbon removal via wastewater alkalinity enhancement.

⚡ Spanish energy company Moeve approved a €1 billion green hydrogen project in Andalusia, partnering with Masdar and Enalter. The first phase of the Andalusian Green Hydrogen Valley will have 300 MW capacity, with potential expansion to 400 MW, making it the largest project of its kind in southern Europe. Supported by over €300 million in EU subsidies, the project reflects Moeve’s shift toward low-carbon energy following its 2024 rebrand and broader €8 billion transition strategy.

Solution Providers

📑 Datamaran launched a standalone Regulatory Monitoring solution to help sustainability, legal, and compliance teams track fast-evolving ESG rules globally. The platform combines AI-driven analysis with expert-curated regulatory intelligence, offering a centralized view of developments across jurisdictions. It provides early warning signals, applicability assessments, and structured workflows, enabling organizations to shift from reactive compliance toward more proactive governance and regulatory risk management.

📊 Upright launched a sustainability due diligence tool that allows investors to assess a company’s sustainability risks and opportunities using only its website URL. The tool models impacts across products, services, and value chains, addressing gaps in traditional ESG analysis that rely mainly on company disclosures. It generates insights aligned with frameworks such as CSRD double materiality, EU Taxonomy, UN SDGs, and PAI indicators, and works for both public and private companies to support investment screening and decision-making.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

📈 The Net Zero Asset Managers (NZAM) initiative relaunched with more than 250 asset managers after a one-year pause triggered by political and legal scrutiny in the US. The updated commitment removes explicit references to achieving net-zero portfolios by 2050 and instead emphasizes that signatories independently set their own climate targets and strategies while addressing climate-related financial risks. Major firms such as UBS, Amundi, and BNP Paribas Asset Management remain involved, while participation from US firms declined significantly, with only 12 rejoining compared to 44 before the pause. Several large US managers, including BlackRock, Vanguard, and JPMorgan Asset Management, are absent from the list.

⚖️ Vanguard agreed to pay $29.5 million and adopt “passivity commitments” limiting ESG engagement to settle a multistate lawsuit alleging climate-driven manipulation of coal markets. The case, led by Texas and 10 other Republican states, claimed Vanguard, BlackRock, and State Street used coordinated shareholder influence through initiatives like NZAM to pressure coal companies to cut output. Vanguard denied wrongdoing but agreed not to push portfolio companies to reduce emissions and to withdraw its US business from the PRI.

💶 BBVA reported €134 billion in sustainable finance activity in 2025, a 44% increase year-on-year and a new record for the bank. The growth supports BBVA’s goal to channel €700 billion in sustainable finance between 2025 and 2029. About 77% of financing supported climate and natural capital initiatives, while 23% funded social projects, with strong growth across retail banking, corporate and investment banking, and commercial banking segments.

🏦 Standard Chartered generated $1.07 billion in sustainable finance income in 2025, exceeding its $1 billion target and growing 9% year-on-year. The bank also achieved net-zero Scope 1 and 2 emissions, cutting operational emissions by 96% since 2018 through renewable energy, efficiency measures, and green buildings, and it has mobilized $157 billion toward its $300 billion sustainable finance goal by 2030.

Startup funding rounds

🌱 Biogas developer Andion CH4 secured a €67 million private credit facility to expand its biogas and biomethane projects in Italy and the Nordic region. Founded in 2017, Andion aims to scale its biomethane platform as demand grows, driven by Europe’s energy security goals and climate policies.

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