What's Happening in Sustainability & ESG (Week Recap 18.03 - 24.03) 🌎

This week’s read time: 9 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:

• EU balances deregulation push with new decarbonization package and SME sustainable finance standard 🇪🇺

• The Science-Based Targets initiative (SBTi) released a draft update to its Net Zero Standard 📑

• Amazon has begun selling carbon credits to suppliers, business customers, and other companies to help them offset their emissions 🌳

• Greenpeace loses landmark pipeline protest case, $667 million verdict threatens its US operations 🇺🇸

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 As the EU navigates a challenging economic landscape, it is ramping up targeted support to decarbonize key industries and unlock sustainable finance. Last week, the European Commission unveiled an Action Plan on Steel and Metals to bolster competitiveness and cut emissions in one of the bloc’s most carbon-intensive sectors. The plan includes six pillars—ranging from access to clean energy and renewable hydrogen to circularity and trade protections—with a €1 billion pilot funded from a €100 billion decarbonization package. Meanwhile, the Platform on Sustainable Finance (PSF) proposed a simplified “SME sustainable finance standard” to help smaller companies access climate funding. Featuring voluntary indicators, minimum environmental safeguards, and a future online tool, the standard will make it easier for banks to classify SME lending as green or transitional, with an initial focus on climate and plans to expand.

Despite these strategic efforts, the EU’s broader regulatory reform package—dubbed the “Simplification Omnibus”—continues to draw mixed reactions. While SMEs may benefit from reduced reporting obligations, larger companies like RHI Magnesita argue the reforms don’t go far enough, citing persistent high compliance costs. The Austrian manufacturer currently spends around €1 million annually on sustainability-related compliance. The European Council has now called for the “stop-the-clock” mechanism to be adopted by June 2025, pausing CSRD reporting expansion for Wave 2 companies, and urged co-legislators to finalize the omnibus package “as a matter of priority.” However, concerns remain that fast-tracking reforms without broad consensus could compromise transparency and accountability. Former ECB President Mario Draghi also weighed in this week, clarifying that his competitiveness report was never a call to dilute climate policy, stressing instead that decarbonization must remain central to the EU’s strategy.

Financial supervisors are also sounding alarms about the risks of excessive deregulation. ECB Vice-Chair Frank Elderson and SRB Chair Dominique Laboureix warned that watering down financial safeguards could jeopardize stability—citing the 2008 financial crisis as a cautionary tale (the EU is also reviewing capital rules for banks and insurers as part of plans to boost financial market activity and growth). Both support nuanced simplification but stress the need for banks to access robust climate-related data. The ECB has already warned several banks that they face penalties for missing climate risk deadlines, underscoring the need for continued vigilance. “Don’t cut rules—harmonize them,” Elderson urged, as pressure mounts to balance competitiveness with long-term resilience.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📑 The Science-Based Targets initiative (SBTi) released a draft update to its Net Zero Standard, open for public consultation until June 1, 2025, with finalization expected in 2026 and use beginning in 2027. The update reinforces the 1.5°C goal and maintains that deep emissions cuts remain central, with only a limited role for permanent carbon removals. Key changes include a new public commitment process, differentiated requirements for company size, mandatory separate Scope 1 and 2 targets, revised Scope 2 rules to include zero-carbon (not just renewables) energy, and mandatory Scope 3 targets only for larger companies. The update introduces greater flexibility, new implementation criteria, and a requirement for limited assurance of emissions estimates for large firms.

📊 While many US companies are rolling back DEI initiatives due to political and legal pressures, the impact on Sustainalytics’ ESG Risk Ratings is expected to be limited, as DEI has relatively low weight in the framework. Sustainalytics identifies three main types of changes: substantive policy rollbacks, reframing of language, and discontinuation of peripheral efforts. DEI considerations factor into four indicators that make up about 40% of a company’s human capital management score, with overall ESG impact varying by sector—being more material in labor-intensive industries like tech. Although financial materiality is limited, investors are increasingly concerned about broader implications, especially if DEI rollbacks foreshadow weakening commitments to other ESG areas like climate risk disclosure. Meanwhile, a Reuters survey of Japanese companies found that nearly 80% plan to continue promoting diversity and decarbonization efforts despite policy shifts in the US under President Trump. About 77% of firms said they will maintain diversity initiatives, and 84% will stick to decarbonization goals, citing global trends, fairness, and Japan’s labor shortages.

🇺🇸 A North Dakota jury ordered Greenpeace to pay nearly $667 million in damages to Energy Transfer and its subsidiary Dakota Access for defamation and other claims linked to the 2016–2017 Dakota Access Pipeline protests. Greenpeace USA was found liable for all counts and will pay $404 million, while Greenpeace Fund Inc. and Greenpeace International will each pay around $131 million. The staggering $667 million in damages could effectively jeopardize the future of Greenpeace’s US operations, barring a successful appeal. Energy Transfer accused Greenpeace of orchestrating disruptive protests and spreading falsehoods, while Greenpeace denies the claims and plans to appeal, calling the verdict a threat to free speech. The lawsuit, seen by some as a strategic lawsuit against public participation (SLAPP), could have major implications for future cases targeting climate activism.

WHAT ARE COMPANIES DOING?

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

🟢 Amazon has begun selling carbon credits to suppliers, business customers, and other companies to help them offset their emissions. This marks Amazon’s first time selling credits, although it has previously invested in forest protection, land restoration, and carbon removal projects. The move comes amid ongoing debates about the role and quality of carbon credits in corporate climate strategies. Amazon says it uses top-tier standards and is helping to strengthen oversight where needed. Companies like Flickr, Seneca, and Corsair are already participating. To access the credits, companies must have net-zero targets covering their own and supply chain emissions and must regularly measure and disclose their carbon footprint.

📢 In their first mandatory reports under the EU’s CSRD, Unilever and Volkswagen claimed that their lobbying efforts in 2024 had a positive impact on people and the environment. Unilever highlighted its advocacy in areas such as climate and plastics, while VW emphasized its lobbying for sustainable mobility. Experts, however, called the claims “bold,” warning that such statements must be backed by evidence and will be judged by public opinion. Unilever received praise for transparency, distancing itself from industry calls to weaken EU sustainability rules and earning a 100% score from InfluenceMap for its lobbying review. In contrast, VW scored just 29%, amid criticism over its past efforts to ease green regulations. Critics argue that while positive lobbying is possible, companies must also disclose negative impacts to ensure balanced reporting.

⏮️ Swiss pharmaceutical giants Roche and Novartis are scaling back their diversity initiatives in response to recent US executive orders targeting DEI programs. Roche has eliminated global diversity workforce targets and removed “diversity” from the remit of its Chief Diversity Offices, citing compliance concerns that could affect its US operations. Novartis has ended its use of diverse hiring panels in the US, also referencing evolving legal risks. Similar moves have been made by UBS and GSK, while AstraZeneca and Novo Nordisk have reaffirmed their commitment to DEI efforts. The trend reflects growing corporate caution amid US legal and political pressures.

📊 Carbon-crediting platform Puro.earth announced it has surpassed 1 million CO2 Removal Certificates (CORCs) issued, representing over 1 million tonnes of verified carbon removal. Puro.earth, acquired by Nasdaq in 2021, certifies long-term carbon removal technologies like biochar and geologically stored carbon (e.g., DACCS and BECCS). The US leads in issuance volume, followed by Finland, Bolivia, and Brazil. The surge is driven by demand from major corporations like Microsoft and Google, as well as hard-to-abate sectors seeking verifiable, high-impact carbon removal solutions.

🚗 Chinese EV maker BYD unveiled a groundbreaking EV charging system capable of delivering 1,000 kW (1 megawatt) charging speeds—enabling a 400 km range with just a five-minute charge. The new technology will debut in two models, the Han L sedan and Tang L SUV, and be supported by a planned rollout of 4,000 flash-charging stations across China. The development intensifies pressure on Tesla, which is already struggling with missed sales targets, investor concerns, and rising competition from more affordable Chinese EVs like BYD’s.

🛢️ Saudi oil giant Aramco launched its first direct air capture (DAC) unit, developed with Siemens Energy, capable of removing 12 tons of CO₂ annually, marking a step toward scaling carbon removal technologies in the Kingdom. The pilot facility will test CO₂ capture materials and support Aramco’s goal to achieve net-zero Scope 1 and 2 emissions by 2050. A larger DAC unit with a 1,250-ton annual capacity is planned. Aramco is also developing a major carbon capture and storage project with SLB and Linde, set to capture up to 9 million tons of CO₂ per year by 2027, and has invested in US-based CarbonCapture.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇦🇺 An Australian federal court fined superannuation fund Active Super A$10.5 million (USD $6.7 million) for greenwashing, after its trustee, LGSS, was found to have misled investors by claiming to exclude certain sectors while continuing to invest in them. The Australian Securities & Investments Commission (ASIC) brought the case, citing 28 holdings in areas like gambling, coal, oil tar sands, and Russian companies—despite Active Super’s ESG claims. The court ruled the misconduct was serious, enhancing the fund’s reputation and misleading investors. The ruling is part of a broader crackdown, following similar greenwashing fines against Vanguard and Mercer in 2024.

📑 BlackRock is making changes to 135 of its sustainable and transition funds, affecting $185 billion in assets, to align with new EU fund naming guidelines from ESMA, which aim to curb greenwashing. The updates include enhancing sustainability features for 60 funds ($92B AUM), adding transition-related terms or adjusting strategies for 18 funds ($42B AUM), and removing ESG-related terms from 56 funds ($51B AUM), though their investment strategies will remain unchanged. These moves come ahead of the May 2025 implementation of ESMA rules requiring funds using ESG or climate terms to meet strict sustainability thresholds and exclusion criteria.

📈 Nordea Asset Management has been selected to co-manage a €800 million (USD $867 million) decarbonization-focused global equity mandate for French pension fund Ircantec, alongside ODDO BHF AM. Ircantec, which manages over €17 billion, aims to align its investments with a 1.5°C climate pathway, including phasing out fossil fuels by 2030 and reducing portfolio emissions by 7% annually until 2050. The new mandate will leverage Nordea’s BetaPlus Responsible Enhanced Equities Strategies and proprietary decarbonization tools to track companies’ net zero progress, supporting Ircantec’s climate goals while maintaining investment performance.

📈 Just Climate raised $175 million for its Natural Climate Solutions strategy, aiming to invest in businesses that transform land use to support net-zero and nature-positive goals while generating strong returns. Backed by CalSTRS and Microsoft’s Climate Innovation Fund, the strategy targets innovations like biological alternatives to chemical inputs, landscape restoration, and technologies for carbon and biodiversity verification. Just Climate, founded by Generation Investment Management and chaired by Al Gore, focuses on scaling solutions for high-emitting sectors. Its first investment was in NatureMetrics, a biodiversity monitoring firm.

Funding rounds:

🔋 California-based battery tech company Coreshell raised $24 million to scale production of its fast-charging, silicon-based EV batteries, aiming to boost energy density, reduce costs, and strengthen domestic supply chains. Founded in 2017, Coreshell replaces graphite with abundant, US-sourced metallurgical silicon, enabling batteries with 30–40% more energy density, sub-15-minute charging times, and lower production costs.

🟢 Berlin-based cleantech startup C1 Green Chemicals raised €20 million (USD $21.7 million) to commercialize its green methanol technology, aimed at helping emissions-intensive sectors transition from fossil feedstocks. Founded in 2022, C1 uses quantum chemical simulations and proprietary tech to produce high-purity green methanol from decentralized, non-fossil sources under low pressure and temperature, enabling cost-effective mass production.

🔋 Munich-based battery tech startup Pulsetrain raised €6.1 million (USD $6.7 million) in seed funding to advance its technology aimed at boosting EV battery performance, safety, and longevity. Founded in 2022, Pulsetrain’s solution combines advanced hardware and AI-powered software to reduce thermal risks, speed up charging, and extend battery life by up to 80%.

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