What's Happening in Sustainability & ESG (Week Recap 20.05 - 26.05) 🌎

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. 🍀

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In this edition, we’ll cover:

• Latest updates on the EU's 'simplification' momentum 🇪🇺

• The DOJ and FTC backed a lawsuit by Texas and 12 states accusing BlackRock, Vanguard, and State Street of using climate-focused investments to suppress coal production 🇺🇸 

• Microsoft strengthens its lead in the carbon removals market with a new record-breaking purchase 🟢 

• PepsiCo revised several of its key sustainability goals, including delaying its net zero emissions target from 2040 to 2050 🥤

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 The European Parliament voted 564–20 to approve proposed changes to the EU’s Carbon Border Adjustment Mechanism (CBAM), exempting 90% of importers (mainly SMEs), while still covering over 99% of emissions from key carbon-intensive imports. Part of the European Commission’s Omnibus I package, the revisions introduce a 50-tonne threshold and simplify emissions reporting, aligning with broader EU goals to enhance competitiveness and reduce red tape.

The European Banking Authority (EBA) joined the ‘simplification’ momentum by proposing amendments to Pillar 3 ESG disclosure requirements, aiming to simplify and clarify sustainability reporting, especially for small and medium-sized banks. The EBA’s new framework introduces tiered reporting requirements: large institutions will provide comprehensive disclosures, while smaller or less complex institutions will follow simplified or essential reporting standards. Key updates include differentiated reporting frequencies, alignment of the Green Asset Ratio (GAR) with the EU Taxonomy, and possible reduced reporting frequency based on materiality for large banks. A public consultation is open until August 22, 2025.

While the Parliament has advanced parts of the package, EU Ombudswoman Teresa Anjinho opened an inquiry into the European Commission’s preparation of the Omnibus, following complaints that it failed to follow required procedures such as public consultation, impact assessments, and climate consistency checks. A coalition of environmental and human rights organizations argues that the Commission violated its own Better Regulation Guidelines by not engaging stakeholders or evaluating the climate impact of the changes. Anjinho has requested detailed explanations from the Commission regarding the lack of consultation and urgency, signaling serious procedural concerns with the EU’s regulatory rollback process.

In related news, Germany’s federal government clarified its stance on the EU’s CSDDD, shifting from earlier calls to eliminate the law toward a position focused on “de-bureaucratizing” and “streamlining” it, after Chancellor Friedrich Merz’s called for the law’s removal. Government spokesperson Stefan Kornelius emphasized that the coalition still supports replacing Germany’s own Supply Chain Act with a revised CSDDD, in line with the European Commission’s Omnibus reforms, which propose delayed implementation and scaled-back requirements for due diligence. Meanwhile, French President Emmanuel Macron also called for the complete elimination of the CSDDD, arguing that the regulation imposes excessive burdens on companies and undermines competitiveness.

Additionally, eleven EU member states, led by Luxembourg and Austria, are calling for a revision or postponement of the EU’s deforestation law, arguing that its requirements on agriculture and forestry are too strict or impractical. The proposal, which Italy supports but Belgium opposes, will be discussed at the EU Agriculture Ministers’ meeting. Some countries want exemptions for “zero-risk” nations, following the European Commission’s new risk classification system. While the regulation, originally set for late 2024 but now delayed to end-2025, aims to curb deforestation linked to imports like cocoa, coffee, and soy, it has drawn criticism from agribusiness and countries in Africa, Asia, and South America over increased costs.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

📊 European companies are approaching the EU’s CSRD with a risk-mitigation mindset, reporting nearly three times more negative impacts (37%) than opportunities (13%) in their Impact, Risk, and Opportunity (IRO) statements, according to Datamaran’s analysis of over 11,000 disclosures from 304 companies. While climate (E1), workforce (S1), and business conduct (G1) dominate reporting, topics like biodiversity and water remain underreported, and most companies identify only 6 out of 10 ESRS standards as material. The findings reveal that although CSRD reporting is evolving, variability in materiality thresholds and lack of entity-specific disclosures indicate that many firms are still building their capabilities for consistent, data-driven sustainability management.

🇺🇸 The US Environmental Protection Agency (EPA) drafted a proposal to eliminate greenhouse gas limits for coal and gas-fired power plants, arguing such emissions are a minor and declining contributor to global pollution and climate change, according to internal documents cited by the New York Times. The draft, reportedly sent to the White House for review on May 2, would mark a major rollback of climate regulations, consistent with President Trump’s broader agenda to dismantle environmental protections and support fossil fuel industries. In response to the report, the EPA confirmed it is developing a proposed rule, which will be released for public comment after interagency review.

🇺🇸 The Trump administration reversed its decision to halt Empire Wind, a major offshore wind project off New York’s coast expected to power 500,000 homes, following negotiations with Governor Kathy Hochul. The reversal comes after the Interior Department paused construction for further review, citing rushed approval under the Biden administration; the project, developed by Equinor and expected to cost $5 billion, will now proceed, with Hochul and federal officials reportedly reaching a compromise that includes future gas pipeline development.

WHAT ARE COMPANIES DOING?

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

🥤 PepsiCo revised several of its key sustainability goals, including delaying its net zero emissions target from 2040 to 2050, citing external challenges such as infrastructure gaps and shifting regulations. The company also adjusted its interim emissions targets and packaging goals, reducing the ambition level in areas like virgin plastic use and recycled content, while retiring its 2030 reuse target. However, PepsiCo expanded its regenerative agriculture goal from 7 million to 10 million acres and reaffirmed its water-positive ambition.

🟢 Microsoft signed a landmark agreement to purchase at least 1.24 million tonnes of carbon removal credits over ten years from Exomad Green’s biochar projects in Bolivia, marking the largest biochar carbon removal deal ever and one of the largest overall durable carbon dioxide removal agreements to date. The deal integrates Carbonfuture’s digital Monitoring, Reporting, and Verification (dMRV) system to ensure traceability and quality, supporting Exomad Green’s goal to sequester one million tonnes of CO₂ annually by 2027.

🟢 JPMorganChase and CO280 also signed a long-term agreement for the bank to purchase 450,000 tons of carbon removal over 13 years, at under $200 per ton, from a US Gulf Coast project that captures and permanently stores biogenic CO2 emissions from a pulp and paper mill. This deal represents one of the lowest price points for engineered carbon dioxide removal (CDR) to date and supports the scaling of affordable, high-quality CDR technologies. CO280, which develops biomass carbon removal and storage projects across North America, aims to remove 10 million tons of CO2 annually through partnerships with pulp and paper companies.

🛩️ FedEx announced its first major US deployment of sustainable aviation fuel (SAF), purchasing over three million gallons (over 11.3 million liters) of blended SAF from Neste to power cargo flights from Los Angeles International Airport (LAX) over one year. The blend will include at least 30% neat SAF and represent roughly 20% of FedEx’s annual jet fuel consumption at LAX. This move supports FedEx’s goal of achieving carbon-neutral operations by 2040, with SAF playing a central role in reducing aviation emissions. Neste’s SAF, made from renewable waste sources, offers up to 80% lower lifecycle greenhouse gas emissions compared to conventional jet fuel.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇺🇸 The US Department of Justice and Federal Trade Commission have backed a lawsuit by Texas and 12 other states accusing BlackRock, Vanguard, and State Street of using their influence to suppress coal production through climate-focused investment strategies. The agencies urged a Texas judge to reject the asset managers’ arguments for dismissal, challenging claims that their actions fall under exemptions for passive investors and citing potential anti-competitive impacts such as higher energy prices. The asset managers rejected the lawsuit, calling the claims “baseless” and “absurd.” The case intensifies scrutiny of the asset managers’ ESG activities, despite their recent pullback from climate engagement. The firms have denied the allegations, calling the case unfounded and politically driven.

🇨🇦 Canada’s largest pension fund, CPP Investments, has withdrawn its commitment to achieve net-zero greenhouse gas emissions by 2050, citing unspecified recent legal developments in Canada. The reversal, quietly updated on its website, follows a broader retreat by several Canadian banks from similar climate pledges. Climate group Shift strongly criticized the move, arguing that abandoning the goal undermines CPP’s duty to responsibly manage long-term savings for Canadians. CPP manages C$714.4 billion in assets and has not yet publicly elaborated on the decision.

📈 Natixis Investment Managers announced a strategic merger between its sustainability-focused affiliate Mirova and thematic investment specialist Thematics Asset Management, aiming to create a global leader in thematic and responsible investing. The combined entity will integrate Mirova’s €32 billion in sustainable assets with Thematics AM’s €3.1 billion in high-conviction thematic strategies, expanding its reach across environmental, social, and innovation-driven themes such as AI, health, and biodiversity.

Funding rounds:

📈 The Bezos Earth Fund announced the first 24 recipients of its “AI for Climate and Nature Grand Challenge,” awarding each project $50,000 in initial funding to explore AI applications in biodiversity, sustainable proteins, power grids, and more. Selected projects include AI tools to identify protein-producing fungi, AI-enhanced reef and bird population monitoring, timber species protection using drones, and rapid weather forecasting for Africa. Up to 15 projects will receive $2 million later this year. The initiative aims to bridge grassroots environmental work with cutting-edge AI, receiving over 1,200 applications and prioritizing innovative ideas over prior AI experience.

🟢 London-based cleantech firm Converge raised $22 million to scale its AI-powered platform for decarbonizing concrete, one of the world’s most emissions-intensive materials. The company’s ConcreteDNA system uses real-time sensor data and predictive AI to optimize concrete performance and mix design, aiming to cut waste and emissions in a sector responsible for 8% of global CO₂ output.

🪨 India-based climate tech startup Alt Carbon raised $12 million to scale its Enhanced Rock Weathering (ERW) carbon removal solution across the Global South. Founded in 2023, the company aims to remove 5 million metric tons of CO₂ by 2030 by spreading basalt rock dust across agricultural land, which reacts with rainwater to store carbon in stable forms for over 10,000 years.

🟢 Carbon crediting platform Riverse raised €5 million in a seed funding round to expand its operations and enhance transparency and relevance in the voluntary carbon market. Founded in 2021, Riverse supports a range of engineered carbon removal and avoidance projects and distinguishes itself by using auditable industrial data to verify credits, published on an open-access registry. The company, recently endorsed by ICROA under its new framework, has validated over 60 projects and issued more than 250,000 credits, with clients including BNP Paribas and Engie.

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