What's Happening in Sustainability & ESG (Week Recap 24.06 - 30.06) 🌎

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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. 🍀

In this edition, we’ll cover:

• Many CSOs are recalibrating their roles in 2025, as investor pressure shifts focus from climate goals to short-term returns and AI 💬

• Global disruptions are driving a shift to energy independence, with countries swapping fossil imports for domestic renewables ⚡️

• The EU is set to propose a 2040 climate target allowing up to 3% of cuts via international carbon credits 🇪🇺

• London Climate Action Week highlighted a clear shift in the global climate landscape 🇬🇧

• Microsoft signs three new deals to purchase millions of carbon removal credits 🟢

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

💬 Many Chief Sustainability Officers are recalibrating their roles in 2025 as companies face investor pressure to prioritize short-term returns and AI investments over climate commitments. Once the public champions of bold net-zero strategies, CSOs now find themselves navigating a wave of skepticism toward ESG, with terms like “carbon-neutral” and “net-zero” disappearing from corporate messaging. The external environment has shifted - what were once tailwinds, such as favorable regulation, funding, and infrastructure momentum, have turned into fragmented policies and stalled progress. This shift has prompted a period of soul-searching for many CSOs, as they reassess not just how they work, but what corporate sustainability actually means today. As Lego’s CSO Annette Stube and PepsiCo’s Jim Andrew point out, companies are no longer pursuing sweeping sustainability agendas; instead of setting wide-ranging goals, they are narrowing their focus to influence only the areas most core to their business models. For a consumer goods company, where food security represents a material risk, that might be looking at regenerative agriculture. Airlines, meanwhile, might see carbon tax as an issue and target the development of sustainable aviation fuel. The era of broad ESG rhetoric is giving way to pragmatic, business-integrated approaches.

At the same time, the CSO role is becoming more financially grounded. Executives are aligning more closely with CFOs, ensuring sustainability initiatives demonstrate tangible returns and tie into operational performance. SAP’s Sophia Mendelsohn notes that it’s no longer about proving the relevance of sustainability - it’s about integrating it and executing with financial rigor. Despite headwinds, CSOs like JPMorgan’s Heather Zichal see this moment as a strategic evolution: sustainability is no longer a parallel narrative - it’s now embedded in the core of business decision-making.

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

⚡️ A new report suggests that global disruptions are prompting a shift toward energy independence, with countries replacing fossil-fuel imports with domestic renewable power for security reasons. The Statistical Review of World Energy highlights 2024 as a possible turning point, where investment in renewables is increasingly framed not just as climate action, but as an energy security strategy. Analysts argue that a second Trump presidency, despite its anti-climate stance, could unintentionally accelerate this transition by weakening global alliances and increasing trade uncertainty, making homegrown energy more attractive. Yet, the reality remains carbon-heavy. Global CO₂ emissions from the energy sector hit a record high for the fourth consecutive year in 2024, rising 1% to 40.8 gigatonnes, despite record growth in renewables. The 2% increase in total energy supply came from across all sources—including oil, gas, coal, nuclear, hydro, and renewables—with natural gas seeing the highest growth at 2.5%, and coal remaining the top global energy source. Wind and solar also rose by 16%.

🇪🇺 The European Commission is set to propose a 2040 climate target allowing up to 3% of emissions cuts to be met using international carbon credits, according to a draft seen by Reuters. The target, aiming for a 90% net emissions reduction from 1990 levels, will include credits phased in from 2036, sourced from high-quality UN-backed projects. The move is intended to ease cost concerns from countries like Italy, Poland, and the Czech Republic, and reduce the financial burden on EU industries. Additional flexibilities include integrating CO₂ removal credits into the EU carbon market and allowing member states more freedom in deciding which sectors bear the brunt of the reductions. The final proposal is due July 2 and will be subject to negotiations with EU countries and Parliament.

The European Commission also unveiled new state aid rules to support green industrial projects and offer temporary power price relief to heavy industries, aiming to boost EU competitiveness and climate goals. Valid through 2030, the updated framework enables easier access to direct grants, tax breaks, subsidized loans, and co-investments from private players like pension funds. Projects supporting renewable energy, low-carbon fuels, and decarbonization are eligible for up to €200 million in aid or more via competitive tenders. Heavy industries like cement and chemicals must commit to decarbonization to access electricity price relief.

In related EU news, a coalition of 198 organizations, including major companies like Allianz, IKEA, EDF, and Nokia, has called on EU policymakers to preserve core elements of the CSRD and CSDDD sustainability frameworks, warning that proposed rollbacks would weaken transparency, hinder competitiveness, and remove key drivers of long-term value. In response to the European Commission’s Omnibus I initiative, the group recommends a more balanced approach: setting the CSRD threshold at 500 employees with a phased rollout, maintaining the double materiality principle, aligning with international standards, and keeping climate transition plans with science-based targets. They argue simplification should not come at the cost of substance or progress.

🇨🇭 Switzerland decided to pause its revision of climate disclosure rules for companies, delaying the implementation of updated reporting requirements - including the obligation to publish net-zero transition plans aligned with the country’s 2050 climate target. The move is largely driven by uncertainty surrounding the EU’s ongoing Omnibus process, as the Swiss government seeks regulatory alignment. Although a public consultation on the proposed revisions showed broad support, the Federal Council will wait for clarity on the EU’s simplified sustainability regulations before proceeding. A final decision is expected by early 2026, with any new rules taking effect no later than January 1, 2027.

📑 The Global Reporting Initiative (GRI) released its finalized Climate Change (GRI 102) and Energy (GRI 103) Standards, enabling companies to report on climate and energy impacts and how they are managed. GRI 102 emphasizes science-based targets, just transition metrics, and alignment with global climate goals, while GRI 103 addresses decarbonization, renewable energy use, and energy impact transparency. Both are aligned with the GHG Protocol and can be used alongside IFRS S2, enabling comprehensive, decision-useful reporting.

🇬🇧 The UK government released draft UK Sustainability Reporting Standards (UK SRS), closely aligned with the ISSB’s IFRS S1 and S2 standards, to form the basis for potential mandatory sustainability-related financial disclosures. Key amendments in the UK drafts include a two-year “climate-first” relief for reporting on non-climate risks and the removal of a reporting delay allowance to ensure alignment with financial statements. The government is seeking feedback on the costs and benefits of using UK SRS, with finalized standards expected later in 2025. Consultations are open until September 17, 2025.

🇺🇸 US Senate Republicans released a revised tax and budget bill that would end the $7,500 tax credit for new EVs and the $4,000 credit for used ones by September 30, reversing key Biden-era policies promoting electric vehicles. The bill also eliminates fuel economy penalties, offers tax exemptions for interest on US-made auto loans (with income caps), and loosens rules on gas-powered vehicle production, while blocking California’s planned 2035 gas car ban. Simultaneously, the renewable energy sector faces new pressure from a proposed tax on wind and solar projects using Chinese components and a stricter in-service date requirement for clean energy tax credits, posing challenges due to grid delays. Amid rising tensions, major oil companies embracing emissions controls are clashing with smaller producers who oppose climate regulations. In response to backlash, Senator Joni Ernst, with support from Senators Grassley and Murkowski, introduced an amendment to remove the excise tax and reinstate credit eligibility based on construction start dates. Critics argue the original bill would raise energy prices by up to 20% and eliminate jobs, with figures like Elon Musk, labor unions, and the US Chamber of Commerce voicing strong opposition.

WHAT ARE COMPANIES DOING?

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

🌳 Microsoft signed a new agreement with Anew Climate and Aurora Sustainable Lands to purchase 4.8 million nature-based carbon removal credits over 10 years, generated through Improved Forest Management (IFM) on US forestlands. Aurora, a joint venture backed by major investors, manages 1.7 million acres of former industrial forestland to produce high-integrity carbon credits, marketed by Anew.

The company also signed a 12-year agreement with Agoro Carbon to purchase 2.6 million soil-based carbon removal credits from US projects, marking one of the largest commitments of its kind. Founded by Yara in 2021, Agoro partners with farmers and ranchers to implement regenerative practices—such as cover cropping and reduced tillage—that sequester carbon, enhance resilience, and boost yields.

Additionally, Microsoft agreed to purchase over 1 million tons of carbon removal credits over 10 years from Hafslund Celsio’s carbon capture project at Norway’s largest waste-to-energy plant. The Oslo-based facility, which burns 350,000 tons of waste annually, will begin capturing 350,000 tons of CO₂ per year by 2029—half biogenic and half fossil-based. Only the biogenic portion qualifies for carbon credits, but the project is expected to reduce Oslo’s emissions by 20%, with the captured CO₂ transported to Northern Lights for permanent storage.

🟢 JPMorganChase signed a 10-year agreement with Occidental’s DAC-focused subsidiary, 1PointFive, to purchase 50,000 metric tons of CO₂ removal credits from the upcoming STRATOS Direct Air Capture facility in Texas. STRATOS, expected to launch this year, is set to become the world’s largest DAC plant, capable of capturing 500,000 tons of CO₂ annually. The agreement follows JPMorganChase’s recent 450,000-ton CDR deal with CO280.

👕 Circular economy startup Syre has partnered with Gap, Houdini Sportswear, and Target to accelerate the adoption of circular polyester and reduce the textile industry’s environmental impact. Launched in March 2024 by H&M Group and Vargas, Syre replaces virgin fossil-based polyester with recycled fibers from post-consumer textiles, cutting CO₂ emissions by up to 85%. Gap aims to use 10,000 metric tons of Syre’s polyester annually, Houdini plans to source 50% of its polyester from Syre over three years, and Target is integrating it into select products as part of its circular design goal for all owned brands by 2040.

⚡️ Google will purchase 200 megawatts of electricity from Commonwealth Fusion Systems’ first commercial fusion power plant, Arc, expected to launch in the early 2030s, marking only the second such deal by a major company. As part of the agreement, Google is also investing in CFS through a new funding round likely matching its previous $1.8 billion Series B. CFS is currently building a demonstration reactor, Sparc, near Boston, and will construct Arc in Virginia.

🛩️ EcoCeres announced a multi-year deal to supply British Airways with sustainable aviation fuel (SAF) made from 100% waste-based biomass, aiming to cut 400,000 metric tons of carbon emissions. The SAF, produced from sources like used cooking oil, delivers up to 80% lifecycle emissions reduction compared to conventional jet fuel. In 2024, SAF accounted for 2.7% of British Airways’ fuel use, contributing to a 13% reduction in carbon intensity since 2019.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇬🇧 London Climate Action Week highlighted a clear shift in the global climate landscape: the US is no longer the undisputed center of momentum. With 700 events and 45,000 attendees, London positioned itself as a rising hub for sustainable finance and climate innovation, especially as geopolitical uncertainty and policy rollbacks in the US push investors and companies to prioritize Europe and Asia. Data from WBCSD and Bain & Company confirmed this shift, showing a marked decrease in US-focused green investment. While many American companies continue to pursue decarbonization for cost-saving reasons, they are increasingly reluctant to speak openly about it, fearing political backlash. Despite a more muted tone and smaller footprints, most executives still plan to attend New York Climate Week, though the US’s leadership role in climate efforts is clearly waning.

📈 The Norrsken Foundation committed €300 million to invest in European AI startups focused on solving global challenges in climate, health, food, education, and society. The funding, sourced from Norrsken VC, Accelerator, and Launcher, will follow strict sustainability and impact criteria tied to the UN SDGs. In an open letter, Norrsken criticized the current AI investment trend—dominated by productivity and convenience tools—and urged a shift toward meaningful applications. With AI attracting over $110 billion in VC funding in 2024, the foundation warned of a potential “gold rush” collapse, emphasizing that only startups solving real-world problems will endure.

📈 Greenbelt Capital Partners announced the final close of its inaugural $1 billion fund. The US-based private equity firm, founded in 2022, focuses on middle-market companies advancing areas such as electrification, renewables, energy efficiency, and grid modernization. With a typical investment range of $50–$150 million, Greenbelt has already begun deploying capital and now manages approximately $2.5 billion in assets.

📈 Ambienta raised €500 million for a new small cap strategy focused on investing in European environmental sustainability champions. Surpassing its €450 million target, the fund will back companies with revenues up to €150 million that benefit from trends in resource efficiency and pollution control. The strategy leverages Ambienta’s proprietary Environmental Impact Analysis and ESG integration tools, with an investment team led from Milan and Paris. The firm sees strong long-term potential in smaller sustainability-driven businesses and views the strategy as a return to its roots in supporting high-impact, growth-oriented firms.

Funding rounds:

⚡️ Energy efficiency platform Enter raised €20 million in a Series B round. Enter helps homeowners plan and execute energy-efficient upgrades through a tech-driven, end-to-end platform. With tools like renovation plans and satellite-based property analysis, Enter serves 25,000+ clients annually and aims to tap into the 15 million energy-inefficient buildings in Germany alone. Its automated system reduces manual work by 70%, and strategic partnerships give it access to 6 million households each year.

🏢 aedifion raised €17 million in a Series B round to scale its building optimization platform across Europe. The platform helps reduce CO₂ emissions and energy costs by collecting real-time data to autonomously manage building operations. Currently managing nearly 500 buildings globally, aedifion claims its clients have cut emissions by up to 40%.

📊 Climatiq, a Berlin-based “carbon intelligence” solutions provider, raised €10 million in Series A funding to scale its emissions data tools. The company embeds automated carbon calculations into over 200 business platforms, helping enterprises measure the impact of activities like freight, manufacturing, and cloud usage using a vast database of 200,000+ emission factors.

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