What's Happening in Sustainability & ESG (Week Recap 07.10 - 13.10) 🌎

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:

• Omnibus deal reached - now what? 🇪🇺

• ISO launched a new global standard guiding companies in assessing and managing their biodiversity impacts and risks 📑

• The US Energy Department plans to cut nearly $24 billion from more than 600 climate projects 🇺🇸

• The 2025 RepRisk Greenwashing Report found rising greenwashing risks in the US and UK but a decline across the EU 📑

• A 25-year study found that carbon offset schemes largely fail to cut global emissions due to deep systemic flaws, not isolated bad actors 🌎

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 EU lawmakers reached a deal on Parliament’s position for the Omnibus I initiative, backing deeper cuts to sustainability reporting and due diligence rules than the European Commission had proposed. The agreement, reached after intense negotiations between centrist, left, and EPP lawmakers, keeps the CSRD’s scope at companies with over 1,000 employees but adds a €450 million revenue threshold, while drastically raising the CSDDD bar to firms with 5,000 employees and €1.5 billion in revenue. It also introduces a risk-based approach with a 5,000-employee value chain cap, a compromised version of transition plan requirements, and no EU-wide civil liability regime, though a 2030 review clause could reopen the debate. The deal followed weeks of political brinkmanship, with Socialists accepting the watered-down compromise to avoid an even weaker outcome, while MEPs like Lara Wolters resigned in protest.

Key changes under the Omnibus I:

1. Scope: CSRD: 1,000 employee cut + €450 million net turnover (–90%); CSDDD: 5,000 employee cut + €1.5 billion turnover (–70%).

2. Transition Plans: Compromised version retained in CSDDD; original text in CSRD retained.

3. Due Diligence Approach: Full risk-based approach towards due diligence (with value chain cap at 5,000 employees).

4. Civil Liability: No EU-wide civil liability regime (possible review clause for 2030).

At the same time, the European Commission delayed the adoption of European Sustainability Reporting Standards (ESRS) for non-EU companies under the CSRD, now pushed back to at least October 2027. The delay aligns with the Omnibus package and follows US objections to the CSRD’s extraterritorial scope. The move eases transatlantic tensions but leaves EU firms facing stricter sustainability rules than global peers.

Adding to the pressure, 46 major European companies, including TotalEnergies and Siemens, sent a letter to President Macron and Chancellor Merz urging the complete abolition of the CSDDD. They argued the law undermines Europe’s competitiveness and called instead for looser competition rules and protection of free pollution permits, portraying deregulation as a “symbolic signal” of Europe’s industrial revival.

Now what?

The European Parliament’s Legal Affairs Committee (JURI) has since approved the Omnibus compromise, which will move straight into trilogue negotiations without a plenary vote due to the accelerated procedure. The final trilogue session is currently scheduled for 8 December (subject to change), aiming for a final deal before year-end. While the decision brings long-awaited clarity for businesses seeking regulatory predictability, observers warn that short-term political tactics have damaged trust within Parliament and reflect a shift toward deregulation rather than responsible leadership.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 ISO launched “ISO 17298: Biodiversity for organizations,” a new global standard to help organizations assess and address their biodiversity impacts, dependencies, risks, and opportunities. The standard provides a structured framework to embed biodiversity into governance, risk management, and strategy, aligning with global frameworks such as the SDGs, ISO 14001, and the Kunming-Montreal Global Biodiversity Framework. It enables organizations to evaluate biodiversity interactions, set measurable objectives, and produce comparable data for improved disclosure and investment decisions.

🇺🇸 The US Energy Department plans to cut nearly $24 billion from more than 600 climate projects amid the government shutdown, expanding earlier $7+ billion reductions and affecting both Republican- and Democratic-led states. The axed funding targets early-stage initiatives in carbon capture and hydrogen, including over $1 billion combined for Heirloom and Climeworks in Louisiana and major hydrogen hubs in California ($1.2B), the Pacific Northwest ($1B), and Appalachia ($925M). DOE says it is reviewing prior awards, but critics warn the move threatens thousands of jobs, undermines US climate progress, and damages credibility as a clean-energy partner.

🌎 A 25-year study found that carbon offset schemes largely fail to cut global emissions due to deep systemic flaws, not isolated bad actors. The study, published in Annual Reviews by researchers at Oxford’s Smith School, concluded that most carbon credits are of poor quality and that recent UN reforms have not solved the problem. Common issues include non-additional projects, impermanence, leakage, and double counting—undermining the credibility of claimed reductions. With less than 16% of offsets delivering real emission cuts, researchers urged phasing out credits that don’t remove CO₂ directly and shifting toward verified carbon removal and contribution-based funding models, while noting limited success in areas like clean cookstoves and landfill gas capture.

📑 The 2025 RepRisk Greenwashing Report found rising greenwashing risks in the US and UK but a decline across the EU, likely due to firms preparing for stricter anti-greenwashing laws. Cases linked to biodiversity have tripled as companies issue vague “nature-positive” claims without evidence. Banking and financial services remain the most exposed sector, followed by retail and food & beverage, while repeat offenders are common in aviation and automotive industries. The report warns that greenwashing is evolving, not disappearing, and urges EU regulators to maintain strong enforcement under the upcoming Green Claims Directive.

WHAT ARE COMPANIES DOING?

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

⏪ Nestlé has withdrawn from the Dairy Methane Action Alliance, a global initiative to reduce methane emissions from dairy farming. The alliance, launched in 2023 with members including Danone, Kraft Heinz, and Starbucks, commits participants to measure, disclose, and cut methane emissions across their dairy supply chains. Nestlé did not explain its withdrawal but said it remains committed to reducing GHG and achieving net zero by 2050, noting a 21% methane reduction since 2018.

🟢 Swedish green steel producer Stegra launched a new financing round to advance construction of its large-scale green steel plant in Boden, Sweden, set to begin operations in 2026. Founded in 2020, Stegra uses hydrogen from renewable energy to remove oxygen from iron ore, eliminating most CO₂ emissions. The plant aims to produce five million tons of green steel annually by 2030 and is now over 60% complete.

📊 Google launched Carbon Footprint for Google Ads, a tool helping advertisers measure and manage emissions from their ad campaigns. Previously limited to select users, it’s now available across Display & Video 360, Search Ads 360, Campaign Manager 360, and Google Ads. The service provides first-party data on Scopes 1–3 emissions, aligned with the Greenhouse Gas Protocol and Ad Net Zero standards. Google executives said the tool supports data-driven, collaborative efforts to make marketing more sustainable.

⚡️ TotalEnergies and Veolia signed a partnership to combine Veolia’s expertise in water and waste management with TotalEnergies’ strengths in methane reduction and low-carbon energy to develop large-scale decarbonization and circular economy solutions. Key initiatives include deploying methane-detecting drones at landfills, expanding wastewater reuse, reducing TotalEnergies’ freshwater use by 20% by 2030, and powering desalination plants with renewables.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇺🇸 SEC Chair Paul Atkins said the agency will consider major revisions to the shareholder proposal process, including rules requiring companies to bring ESG-related proposals to a vote. In a speech at the University of Delaware, Atkins said the planned “Shareholder Proposal Modernization” aims to “de-politicize” shareholder meetings and refocus them on core corporate issues, arguing that many ESG proposals are immaterial and costly. He asked SEC staff to reassess Rule 14a-8, which has governed shareholder proposals since 1942, and suggested companies could exclude certain proposals under Delaware law. Sustainable investing group Ceres criticized the remarks as undermining investor rights and called for public consultation before any policy changes.

📈 Brookfield Asset Management closed its Brookfield Global Transition Fund II (BGTF II) with $20 billion in commitments and $3.5 billion in co-investments, totaling $23.5 billion - the largest private fund ever dedicated to the clean energy transition. Launched in 2023 following its $15 billion predecessor, BGTF II invests in clean energy expansion, decarbonization of carbon-intensive sectors, and sustainable solutions across global markets

🤝🏻 Novata acquired European sustainability platform Atlas Metrics to expand its global reach and strengthen its ESG data and reporting capabilities. Berlin-based Atlas Metrics offers AI-driven tools for sustainability performance, compliance, and impact measurement, complementing Novata’s private markets ESG platform. The combined company will serve over 400 clients and 13,000 companies worldwide, enhancing data collection, reporting, and benchmarking.

🤝🏻 Worldly acquired GoBlu to unify sustainability and compliance tracking across consumer goods supply chains. GoBlu’s flagship tool, The BHive, helps apparel factories digitize chemical management for better traceability and compliance. By integrating The BHive with its Higg Index data infrastructure, Worldly aims to connect chemical usage with environmental performance, streamline reporting, and enhance transparency through AI-driven insights.

📈 Carlyle AlpInvest and CalSTRS launched a new co-investment partnership to target climate solution investments globally. The collaboration combines Carlyle AlpInvest’s private equity co-investment platform with CalSTRS’ Sustainable Investment and Stewardship Strategies team to identify opportunities delivering both financial returns and sustainability impact.

Funding rounds

⚡️ Base Power raised $1 billion in Series C funding to expand its US network of home-based energy storage systems. Founded in 2023, the Austin-based company installs distributed residential batteries that provide backup power, support the grid during peak demand, and lower customers’ energy bills through revenue sharing with grid operators. Having deployed over 100 MWh of storage in under two years, Base Power plans to scale nationally and build a new manufacturing facility in Austin.

🟢 Verdalia Bioenergy secured €671 million in corporate financing to expand its biomethane projects across Spain and Italy. Verdalia aims to become a leading European biomethane operator, supporting the decarbonization of hard-to-abate sectors through renewable natural gas. The financing will fund over €1 billion in projects with a combined production capacity exceeding 3 TWh annually, enough to power nearly one million homes.

🚢 Corvus Energy raised $60 million in funding round led by Morgan Stanley. Corvus, which supplies lithium-ion battery and hydrogen fuel cell systems to over half of the world’s zero-emission vessels, has delivered 1,300 installations and helped avoid 11 million tonnes of CO₂.

🟢 Vycarb raised $5 million in seed funding to scale its low-cost, water-based carbon capture and storage (CCS) technology. Founded in 2022, the Brooklyn startup uses ocean-based chemistry and real-time sensors to convert CO₂ into dissolved bicarbonate for permanent storage, reducing emissions and mitigating ocean acidification.

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