What's Happening in Sustainability & ESG (25.08 - 01.09) 🌎

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 latest on US sustainability developments 🇺🇸

• Australia’s Treasury launched a consultation on changes to improve the efficiency of climate-related financial disclosures 🇦🇺

• Global green bond issuance reached a quarterly record of $193 billion in Q2 2026, driven by a 34% surge in European issuance 📈

• Microsoft shared parts of its playbook for buying carbon removals 🟢

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇺🇸 The US government has now made specific demands, pushing the EU to further scale back the CSDDD, particularly its impact on American companies. Its demands include significantly limiting CSDDD and CSRD requirements for US businesses, prohibiting penalties calculated on worldwide turnover and further restricting the CSDDD’s liability regime. The pressure continues longstanding US opposition to the rules, with concerns raised by then-Treasury Secretary Janet Yellen in 2023 and US senators describing the CSDDD as “regulatory encroachment” in 2024.

The pressure also continues to play out domestically. A coalition of 16 Republican state Attorneys General warned Deloitte, EY, PwC and KPMG that their support for climate-related financial disclosures may violate state laws and professional duties of independence, integrity and objectivity. The AGs are scrutinizing the Big Four’s involvement with initiatives including the TCFD, ISSB standards and the now-disbanded Net Zero Financial Service Providers Alliance, arguing that supporting disclosure requirements could create conflicts of interest by increasing compliance and auditing costs from which the firms benefit. The letter requests extensive documentation and warns of potential consequences under consumer protection laws and state and federal contracts.

Scrutiny has also continued around DEI. Deloitte agreed to pay $21.5 million to settle US Department of Justice allegations that it discriminated against employees and applicants based on race or sex through DEI-related hiring, promotion and staffing goals. The DOJ alleged that Deloitte tracked progress toward demographic workforce targets, incorporated them into leadership evaluations and promotion decisions, and restricted some professional opportunities based on race or sex, marking the latest action in the US government’s growing crackdown on DEI practices among federal contractors.

Additionally, a US federal judge blocked New York from enforcing its 2024 Climate Change Superfund Act, which sought to collect $75 billion from major fossil fuel companies over 25 years to fund climate adaptation infrastructure. The judge ruled that the state’s emissions compensation scheme was preempted by federal law, finding that the Clean Air Act gives the federal government authority over emissions regulation and that New York’s approach could interfere with national energy and environmental policy.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🇦🇺 Australia’s Treasury launched a consultation on reforms to reduce the cost and complexity of its mandatory climate-related reporting regime, particularly for SMEs facing information requests from larger companies. Proposals include eliminating or delaying the shift from limited to reasonable assurance, potentially applying reasonable assurance only to more mature metrics such as Scope 1 and 2 emissions, and introducing clearer boundaries for Scope 3 value-chain information requests. The consultation also proposes greater use of publicly available emissions factors and clearer guidance on proportionality mechanisms, with feedback open until October 2, 2026.

🌳 Countries at the UN Convention to Combat Desertification COP17 in Mongolia announced $1.3 billion in new and pipeline financing for land restoration and drought resilience projects across 23 countries on five continents. The funding includes $644.5 million identified as new finance and $216.4 million already moving toward implementation, bringing governments, development banks and private investors together to address a major financing gap: around $355 billion is needed annually for land restoration, compared with only about $70 billion currently available.

🇪🇺 The European Commission approved Greece’s €4.8 billion Social Climate Plan. The package, the largest plan approved so far under the Social Climate Fund, combines €3.6 billion of EU support with €1.2 billion of Greek co-financing for building renovation, energy efficiency, clean heating and cooling, renewable energy and zero-emission mobility.

⚡ Spain proposed draft rules that would require data centers above 1 MW to source at least 80% renewable electricity every hour and back each new megawatt of demand with one megawatt of new renewable capacity. The draft also links grid access to sustainability compliance, introduces energy and water efficiency requirements, and requires annual reporting for facilities above 500 kW. Spain estimates its AI strategy could require 3.5–4 GW of electricity by 2030, while more than 12 GW of data-center grid access or connection rights have already been granted since 2021.

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WHAT ARE COMPANIES DOING?

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

🔴 Shein is preparing to go public in Hong Kong next month, but persistent ESG concerns and regulatory investigations could weigh on its valuation. Investors continue to flag labour conditions, supply-chain traceability, governance and environmental impacts, while ongoing EU and US investigations raise the risk of significant fines. Shein’s four co-founders will control 90% of voting rights after the IPO despite owning 59.6% of shares, raising concerns over independent oversight. Its environmental footprint also remains substantial: Shein reported roughly twice the GHG emissions of Zara owner Inditex in 2025, while offering around 4,700 new styles every day, leaving investors questioning whether its high-volume, ultra-fast-fashion model is compatible with a credible sustainability transition.

🟢 Microsoft is using dynamic baselines, combined measurement-and-modeling approaches and stricter biomass sourcing criteria as it buys carbon-removal credits at a scale far beyond other corporate buyers. Trellis reports that Microsoft has bought five times more removal credits than the next 10 largest buyers combined and recently explained why it contracted just over 6 million credits from four forest, agriculture and industrial carbon-capture projects. Its experience highlights a broader lesson for the carbon market: credible removals depend not just on buying credits, but on continually testing whether the emissions reductions are genuinely additional, measurable and sustainable as projects evolve. Microsoft contracted 45 million tonnes of removals in 2025, but its emissions also rose 25% that year as it expanded AI and cloud infrastructure, making its 2030 carbon-negative target harder to reach.

Microsoft also announced a partnership with Aker Solutions to advance the maturity, bankability and delivery of carbon capture and carbon removal projects. The companies will combine Aker Solutions’ engineering, advisory and project-delivery capabilities with Microsoft’s digital, data, AI, MRV and carbon-market expertise, aiming to reduce execution risk and improve investment readiness for projects moving toward final investment decisions.

⚖️ Meta agreed to a proposed settlement worth up to $18 billion with US states over allegations that it illegally collected and used children’s data, alongside major new restrictions on how teenagers use Instagram and Facebook. Users aged 13–17 will default to two-hour daily limits, blocked access from midnight to 6 am, muted notifications during school hours and non-algorithmic feeds, with the measures remaining in place for 10 years unless parents disable them. Meta, which denies the allegations, is also calling on TikTok and YouTube to adopt similar protections, arguing that effective child safety requires an industry-wide approach.

Solutions

🤝🏻 Climate Impact X and Carbonplace announced plans to merge their environmental-markets platforms. The combination brings together CIX’s Singapore and London market infrastructure with Carbonplace’s bank-backed settlement network, creating a broader platform for carbon credits and other environmental attributes.

📊 MioTech is combining with CCX Group’s green finance and ESG business to form CCX-MioTech, a new sustainability business focused on agentic AI for reporting and sustainable supply chain management across Asia. The combined platform will map multi-tier supplier networks, assess sustainability and compliance exposure, track emissions and automate reporting. Its first products will include an MCP service connecting sustainability data and methodologies to clients’ AI systems and an AI agent for sustainability reporting.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

📈 Global green bond issuance reached a quarterly record of $193 billion in Q2 2026, driven by a 34% surge in European issuance, according to Moody’s. Europe accounted for 58% of all labelled sustainable bond issuance during the quarter, while blue bonds also reached record levels, surging roughly sixfold year over year to $3.7 billion in H1. By contrast, sustainability-linked bond issuance remained weak, falling 63% year to date.

📈 Philips issued a €650 million green bond aligned with the EU Green Bond Standard. Philips said the transaction is its first EuGB-aligned issuance and the first such bond in the healthcare industry, with proceeds allocated to taxonomy-aligned activities under the company’s green-bond framework.

📈 Nuveen raised more than $1 billion at the first close of its fourth C-PACE lending fund. The strategy finances upgrades to commercial buildings including energy efficiency, water efficiency and climate-resilience improvements through Commercial Property Assessed Clean Energy financing.

📈 responsAbility raised $461 million at the final close of its Asia Climate Fund. The private-credit strategy will target climate solutions across South and Southeast Asia, including renewable energy, electric mobility, energy efficiency and climate infrastructure, using blended finance to mobilize private capital into markets where the firm sees a large climate-financing gap.

📈 MassMutual Ventures launched a $150 million second climate-technology fund. Climate Technology Fund II will invest in early-stage companies spanning clean and reliable energy, physical and operational climate risk, and AI applications for real assets and industrial systems.

M&A

📊 SLB agreed to acquire thermal management solutions provider Kelvion in a deal valuing the company at more than $4 billion. Kelvion’s advanced cooling technologies for data centers have become its largest and fastest-growing segment, and SLB said the acquisition will strengthen its Data Center Solutions business by integrating thermal management into its infrastructure offering.

📊 Lookthrough agreed to acquire Schindler-owned BuildingMinds, combining real-estate investment intelligence with an ESG data and reporting platform. BuildingMinds automates sustainability data management, decarbonization planning and reporting across frameworks including GRESB, SFDR and the EU Taxonomy.

Funding rounds

⚡️ Emerald AI raised $150 million in Series A financing at a $1.05 billion valuation. Its Emerald Conductor platform is designed to make AI data centers more flexible participants in the power system by coordinating computing workloads and onsite energy resources in response to grid conditions.

🛩️ Aerospace startup JetZero secured $100 million in financing to advance its blended-wing Z4 aircraft, designed to cut fuel burn and emissions by up to 50% compared with conventional aircraft. The funding will support its full-scale demonstrator and new North Carolina manufacturing facilities, with the roughly 250-passenger Z4 expected to enter service in the early 2030s.

⚡️ Light raised $46 million in Series A funding to expand its platform for creating bespoke, branded retail electricity plans beyond Texas into the PJM market. Light handles power procurement, regulatory compliance and billing for partners including solar, battery and EV charging providers, enabling them to bundle electricity with their products and create new revenue streams.

🟢 Mantel raised $18 million to commercialize its carbon-capture technology for heavy industry. The company’s system uses a high-temperature liquid-phase process based on molten borate salts and is designed to reduce the energy penalty and cost of capturing CO₂ from industrial facilities.

🔋 Certain Energy raised £10 million ($13.6 million) in Series A financing for its manganese flow-battery technology. The company, formerly RFC Power, is developing long-duration storage designed to discharge for hours or days and support grid stability as renewable generation expands.

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