What's Happening in Sustainability & ESG (Week Recap 14.10 - 20.10) 🌎

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:

• The IMO postponed its net-zero framework for shipping, California postponed rulemaking on new climate reporting, and US banking regulators withdrew their joint climate risk principles 🌎

• 83% of companies continued to increase their sustainability-related investments over the past year 📈

• GRI and CDP released a joint mapping tool aligning CDP’s 2025 corporate questionnaire with the new GRI Climate Change and Energy Standards 📑

• The EU announced it will offer development funding to countries affected by the CBAM on imports such as steel and cement 🇪🇺

• Oil, gas and coal are set to dominate the global energy mix well beyond 2050, according to a new McKinsey report ⚡️

• and other news 🌍

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🌎 Last week’s regulatory moves reinforce the slower pace now defining climate policy rollout. The IMO postponed its net-zero framework for shipping, California postponed rulemaking on new climate reporting, and US banking regulators withdrew their joint climate risk principles.

🚢 IMO Postpones Global Carbon Pricing Framework for Shipping

The International Maritime Organization (IMO) voted to postpone the adoption of its landmark Net-Zero Framework, a global carbon pricing plan for shipping, following a Saudi-led motion supported by the US, leaving the sector without binding climate rules. The framework, which would have required ships over 5,000 tons to gradually cut fuel emissions starting in 2028 and generate up to $13 billion annually for clean fuel and resilience funding, was deferred 57–49 after countries including China, Japan, and South Korea reversed support under US pressure. The move stalls what would have been the first global carbon-pricing mechanism for any major industry, undermines investment momentum for low-emission fuels such as methanol and ammonia, and gives fossil-based options like LNG a longer runway, further delaying decarbonization in a sector responsible for roughly 3% of global CO₂ emissions.

🇺🇸 California Postpones Climate Rulemaking to 2026

The California Air Resources Board (CARB) announced that it will defer its initial rulemaking on the new climate-reporting regulation to Q1 2026. The board said the delay — from an original target of October 2025 — comes in response to a large volume of public comments and ongoing input about which entities will be covered. Although the rulemaking schedule is pushed back, CARB indicated the statutory deadlines for reports under SB 253 and SB 261, including January 1 2026 for climate-related financial risk disclosures, remain unchanged; for early reporting cycles it will exercise enforcement discretion.

🏦 US Banking Regulators Withdraw Climate Risk Principles

The US major banking regulators announced the withdrawal of the interagency Principles for Climate-Related Financial Risk Management for Large Financial Institutions. The Board of Governors of the Federal Reserve System (Fed), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) stated that existing safety-and-soundness standards already require large banks (over $100 billion in assets) to manage all material risks — making the specific climate principles redundant. The principles, issued in 2023 to guide such banks in identifying, measuring and monitoring climate-related physical and transition risks, will be rescinded effective immediately.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📈 83% of companies continued to increase their sustainability-related investments over the past year despite reduced pressure from some stakeholder groups, according to Deloitte’s 2025 C-suite Sustainability Report. The survey of over 2,100 executives across 27 countries found that 83% of companies boosted sustainability spending, with 14% increasing by more than 20%, even as regulatory and investor pressure declined. Executives cited tangible business benefits such as revenue growth (66%), cost reduction (55%), and resilience gains, while 81% reported using AI to enhance sustainability performance.

📑 GRI and CDP released a joint mapping tool aligning CDP’s 2025 corporate questionnaire with the new GRI Climate Change and Energy Standards to streamline environmental reporting and improve data consistency. The mapping helps companies reduce duplication by showing how disclosures under GRI 102: Climate Change 2025 and GRI 103: Energy 2025 correspond to CDP’s datapoints, enabling a “write once, read many” approach. The resource supports organizations in using the same data across both systems for reporting, addressing companies’ demand for clearer alignment and reducing reporting burden.

🇪🇺 The EU announced it will offer development funding to countries affected by its carbon-border adjustment mechanism (CBAM) on imports such as steel and cement. The move is intended to ease concerns from developing economies like Brazil, South Africa and India that the policy unfairly penalises them. Under the plan, the EU will channel support through its proposed “Global Europe” instrument—part of a €200 billion budget for 2028-34—to help with decarbonisation, adaptation and regulatory reform in partner countries.

🇬🇧 The UK government announced a new Clean Energy Jobs Plan to recruit and train workers for the clean-energy economy, targeting an incremental 400,000 jobs in the green sector by 2030. The plan identifies 31 priority occupations (such as plumbers, electricians and welders) with entry-level roles paying on average 23 % more than equivalent jobs in other sectors. It introduces five new Technical Excellence Colleges, a £20 million up-skilling fund for oil-and-gas workers, and tailored schemes for veterans, ex-offenders, school leavers and the unemployed.

🟢 A group of leading financial, energy and industrial companies launched Carbon Measures, a new coalition aimed at advancing a more accurate and consistent accounting framework to track carbon emissions at the company and product level, and setting carbon-intensity standards for key industrial products. Founding members include BASF, Bayer, ExxonMobil, EY, Honeywell, Linde, Vale, and many others. Led by former EY sustainability executive Amy Brachio as CEO, the coalition intends to develop a ledger-based carbon accounting model that addresses shortcomings in current methodologies—including issues around double-counting and insufficient product-level data—and to set global product-level carbon-intensity standards for materials such as steel, concrete, fuel and chemicals.

⚡️ Oil, gas and coal are set to dominate the global energy mix well beyond 2050, as surging electricity demand, driven largely by data centers, industry and buildings, outpaces renewable growth, according to a new McKinsey report. The consultancy projects fossil fuels will still supply 41–55% of global energy consumption in 2050, down from 64% today but higher than prior forecasts, with oil demand not expected to peak until the 2030s. US data center power demand is forecast to grow nearly 25% annually through 2030, contributing to expanded natural gas use and persistent coal reliance. While renewables could deliver up to 67% of global power by mid-century if prioritized, McKinsey warns that energy security, affordability concerns, and slow adoption of alternative fuels may delay decarbonization, posing a major obstacle to achieving global net-zero goals.

WHAT ARE COMPANIES DOING?

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

👩‍💻 EcoVadis announced the launch of Worker Voice Connect, a new digital grievance mechanism enabling workers to anonymously report workplace concerns across global supply chains. The solution is designed to fill a gap in traditional systems that focus on corruption or compliance and often exclude on-the-ground workers who may be unaware of or reluctant to use them. Key features include two-way anonymous communication via channels such as WhatsApp, QR codes and web (without requiring corporate apps or smartphones), support for 20 languages, and dashboards for buyers and suppliers to track case progress and remediation.

⚡️ Brookfield Asset Management will invest up to $5 billion to deploy Bloom’s fuel-cell technology across global AI data centers. Under the agreement, Bloom’s solid-oxide fuel cells will enable reliable, low-carbon onsite power tailored for rapidly growing AI infrastructure demand, while Brookfield brings financing and infrastructure development capabilities. The partnership marks Brookfield’s first commitment under its dedicated “AI Infrastructure” strategy and will see joint efforts to design and deliver so-called “AI factories,” including an announced European site later this year. 

🟢 Microsoft signed a new agreement with UNDO to remove 28,900 tonnes of CO₂ through enhanced rock weathering (ERW) by 2036. Founded in 2022, UNDO accelerates the natural weathering process by spreading crushed silicate rock, such as wollastonite, on farmland, capturing CO₂ while improving soil health. The new project will deploy 90,000 tonnes of wollastonite across Canada.

🟢 Siemens and Airbus announced a new framework agreement to decarbonize four Airbus industrial sites in the US and UK through renewable energy integration, smart energy management, and low-carbon heat systems. Under the deal, Siemens will assess each site and develop a masterplan using Energy System Twins to simulate optimal decarbonization pathways, with infrastructure rollout starting in 2026. The project, led by Siemens’ Buildings business and supported by Capgemini, will include heat pump installations, efficiency upgrades, smart metering, and renewable integration.

⚡️ The LEGO Group revealed a series of measures to phase out natural gas use at its production sites as part of its goal to reduce GHG emissions. The company aims to achieve net zero across its value chain by 2050 and cut emissions 37% by 2032 (from a 2019 baseline). Key initiatives include using geothermal energy at its Hungary factory by 2028, transitioning 11 buildings in Billund, Denmark to renewables-based district heating, and installing a heat recovery system in Jiaxing, China that has already halved natural gas use.

📊 Greenly announced the launch of EcoPilot, a new AI-and-language-model-based platform aimed at simplifying and accelerating carbon accounting for companies. The platform automates the collection, structuring and processing of emissions-related data—enabling users to feed in physical inventory, accounting and logistics information, apply emissions factors with high accuracy, and model Scope 3 reductions via supplier commitments.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

📑 Proxy adviser Glass Lewis announced it will discontinue its long-standing “benchmark” voting recommendations in 2027, shifting instead to customizable, AI-powered voting frameworks for investors. The move reflects growing divergence between US and European investor priorities on fiduciary duty and sustainability, and partly responds to political pressure from US Republicans, who have accused proxy advisers of bias in ESG-related advice. Glass Lewis and its rival ISS have faced investigations and legal challenges in states like Texas over alleged consumer protection violations tied to ESG guidance. Under the new model, clients will be able to design personalized voting policies aligned with management, governance, or sustainability views, while Glass Lewis provides supporting research. ISS said it will keep its benchmark policy but expand non-recommendation research options. Experts say the change will decentralize influence in shareholder voting, making investor blocs smaller and corporate engagement more complex to track.

🇯🇵 The Tokyo Metropolitan Government (TMG) announced plans to issue the “TOKYO Resilience Bonds,” the first-ever certified climate resilience bonds. The offering, targeting approximately JPY 50 billion (USD ≈ 330 million), will fund projects under the “TOKYO Resilience Project” to protect the city against natural disasters and climate change impacts—such as flooding, typhoons, power disruptions and more. Proceeds will support infrastructure upgrades like river and coastal defences, utility pole undergrounding, and sediment-disaster prevention. 

📈 Climate Fund Managers (CFM) closed its second climate investment vehicle, raising more than US$1 billion in commitments. The fund, named Climate Investor Two (CI2), is described as the world’s largest infrastructure fund focused on climate adaptation in developing economies. Its targets include water, waste and ocean-related infrastructure across Africa, Asia and Latin America, aiming to provide clean water and sanitation to 16.5 million people and protect or restore over 2 million hectares of ecosystems.

Funding rounds

📈 Stahl‑Holding‑Saar Group (SHS) announced the completion of a €1.7 billion financing package for its “Power4Steel” transformation project directed at decarbonising steel production. The funding secures full investment for the build-out of a new direct reduction plant and two electric arc furnaces at SHS’s Dillingen and Völklingen sites, replacing blast-furnace operations and enabling a targeted reduction of 55% in CO₂ by 2030 and full climate-neutral steelmaking by 2045.

⚡️ Energy storage provider Return announced a growth-capital investment of €300 million ($350 million) from Dutch pension fund manager APG (on behalf of its client ABP) aimed at scaling its battery-energy-storage platform across Europe. Return, based in Amsterdam, builds, owns and operates large-scale battery energy storage systems (BESS) across countries, leasing capacity to energy companies and traders rather than trading energy itself. 

⚡️ Daylight Energy raised $75 million to scale its decentralized energy network. The New York-based company, founded in 2022, enables homeowners to subscribe to solar + battery installations at reduced cost, then aggregates excess energy back into the grid — sharing the revenue and offering resilience during outages.

📊 Class 3 Technologies raised $3.5 million in a seed funding round to scale its climate-risk and resilience software platform for buildings. The startup, spun out from consultancy Arup, has developed the “Iris” platform — an engineering-based modelling tool that assesses how individual buildings might be impacted by climate-driven events and simulates resilience interventions.

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