What's Happening in Sustainability & ESG (Week Recap 25.11 - 01.12) 🌎

This week’s read time: 7 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:

• Sustainability professionals in the US are feeling fatigued but determined - Trellis survey 🇺🇸

• The EU Parliament voted to delay and simplify the EUDR, while the EU Ombudswoman found maladministration in the Omnibus initiative process 🇪🇺

• The UK’s Financial Conduct Authority set out plans to regulate ESG ratings providers from June 2028 🇬🇧

• Microsoft will not release a 2025 DEI report, while Norway’s $2 trillion wealth fund pushes back ⏪

• NYC Comptroller urged the city’s pension funds to drop BlackRock, Fidelity, and PanAgora for failing to meet climate expectations 🇺🇸

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇺🇸 One year into Trump’s second term, US sustainability professionals say the initial shock has faded, replaced by fatigue, pragmatism, and a determined resolve to keep going. According to the latest Trellis sentiment survey, positive feelings about working in sustainability have doubled to 20% since May, though two-thirds of respondents still report negative emotions as federal policy shifts decisively away from decarbonization and toward fossil fuels.

Inside companies - sustainability teams, already lean, are facing layoffs, shrinking budgets, and executives who are “taking their foot off the gas.” Some expressed deep frustration with companies that have softened or abandoned commitments, revealing how much of corporate sustainability may have relied on optics rather than conviction. Meanwhile, some say the job has become increasingly bureaucratic, dominated by measurement, tracking, and reporting rather than transformative action.

At the same time, pockets of optimism persist, with some organizations staying ambitious despite federal headwinds. Professionals say the challenges have forced them to sharpen their focus, defend their impact daily, and continue pushing forward even in a tougher, more bureaucratic landscape. Despite discouragement and a weakening job market, the prevailing mindset is to “stay the course,” driven more by passion and purpose than by policy or political cycles.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🇪🇺 The European Parliament voted to delay and simplify the EU Deforestation Regulation (EUDR), pushing implementation to 2026–27 and calling for an early 2026 review that could bring further changes. The move aligns with the Council’s position, making approval likely, but has drawn criticism from center-left groups and companies that warn delays create uncertainty and undermine firms already preparing for compliance.

In related news, EU Ombudswoman Teresa Anjinho found “maladministration” in the European Commission’s process for launching its Omnibus initiative. Her inquiry concluded that the Commission violated its own Better Regulation Guidelines, including cutting internal consultation time to less than 24 hours over a weekend and lacking clear records of a required climate-consistency assessment. The Omnibus I package, released in February 2025, is now entering negotiations and is expected to lead to far deeper cuts to CSRD and CSDDD than initially proposed, with lawmakers pushing to narrow their scope to only the largest companies.

🇬🇧 The UK’s Financial Conduct Authority set out plans to regulate ESG ratings providers from June 2028, requiring firms to disclose conflicts of interest, increase transparency, and clarify methodologies to address investor concerns over opaque ratings. The proposals align with IOSCO principles and mirror similar EU efforts, ending the ability of non-regulated providers to issue ESG ratings. The FCA says the move will strengthen trust in a £622 million UK market widely used across financial services.

📑 A new Clarity AI–CDP study warns that most companies driving the clean-energy transition are failing to disclose or manage water risks, creating a major blind spot for sustainability and investors. Analyzing 500+ firms in water-intensive sectors like green hydrogen, biomass, CCUS, and critical minerals, the research finds that 74% do not meet best-practice standards, and only 43% even acknowledge water-related risks.

WHAT ARE COMPANIES DOING?

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

📑 Microsoft will not release a 2025 diversity and inclusion report, opting instead to showcase progress through stories, insights, and videos. The move follows a broader corporate rollback of DEI programs, with many firms eliminating roles or reducing disclosures, and comes after Microsoft cut some DEI positions in 2024 while maintaining its stated commitments. The company did release a full D&I report last year.

Norway’s $2 trillion wealth fund will vote for a shareholder proposal at the company’s December 5 AGM calling for a human-rights risk report. The fund, Microsoft’s eighth-largest shareholder with a 1.35% stake, said the board must address material sustainability risks.

📦 LEGO has transitioned 56% of its brick-packing lines from single-use plastic bags to FSC-certified, recyclable paper-based alternatives, with rollout nearly complete in China and Vietnam and global implementation targeted for 2027. The shift supports LEGO’s broader sustainable-packaging goals, with 93% of packaging by weight already paper-based, and the company planning further improvements to speed and performance once the transition is complete.

🟢 Climate startup Reverion signed $41 million in Frontier-facilitated offtake deals with buyers including Google, McKinsey, Stripe, Shopify, and H&M to remove 96,000 tons of CO₂ from biogas between 2027 and 2030. The startup’s solid-oxide fuel cell system converts farm biogas into electricity while capturing a pure CO₂ stream for permanent storage — doubling removals versus conventional methods and enabling farmers to cut costs, generate power, and even produce green hydrogen.

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EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🇺🇸 NYC Comptroller Brad Lander urged the city’s three pension funds to drop BlackRock, Fidelity, and PanAgora for failing to meet the climate expectations of the city’s Net Zero Implementation Plan. Lander said their decarbonization strategies fell short, particularly criticizing BlackRock, arguing its scaled-back climate engagement is an “abdication of financial duty. BlackRock manages $42.3 billion for the funds, while Fidelity and PanAgora manage smaller US small-cap mandates.

Lander’s term ends Dec. 31, leaving the final decision to pension trustees influenced by Mayor-elect Zohran Mamdani, in what would be the first major Democratic pushback against BlackRock from the pro-climate side amid parallel Republican attacks on the firm’s ESG stance.

Meanwhile, Senator Ted Cruz introduced the “Stop TSP ESG Act,” aiming to bar asset managers for the federal Thrift Savings Plan from exercising any proxy voting rights, arguing they use federal employees’ retirement savings to advance ESG and DEI agendas.

📈 Just Climate raised $375 million for its Natural Climate Solutions strategy, attracting major institutional investors to scale land-use, water, and waste solutions with high climate and nature impact. The strategy has already invested in AgroStar, an Indian agritech platform serving 10 million farmers with sustainable inputs and advisory services, and aims to back scalable technologies and models that transform land management.

Acquisitions

🤝🏻 ABB acquired Gamesa Electric’s power electronics business, adding €145 million in annual revenue, 400 employees, and two converter factories. The deal boosts ABB’s installed base of serviceable wind converters by 46 GW and strengthens its ability to capture rising demand as renewables grow to an expected 43% of global electricity by 2030.

Startup funding rounds

📊 AI-powered grid-resilience startup Overstory raised $43 million in Series B funding to expand its satellite- and AI-based vegetation-risk models that help utilities prevent wildfires. The Amsterdam-based company also launched an upgraded Wildfire Intelligence tool with a new Fuel Detection Model to pinpoint high-risk areas more precisely.

🟢 Sweden granted green-steel startup Stegra $41 million to help it secure the remaining capital needed to finish its hydrogen-based steel plant, as the company seeks up to $1.1 billion in new financing. The support is conditional on Stegra proving by spring 2026 that it has raised enough funds.

📊 Metrikflow raised €565K in pre-seed funding and launched its AI-powered “Operating System for ESG Compliance,” a platform that automates carbon accounting, ESG reporting, LCAs, and supplier evaluations for industrial companies. The startup supports end-to-end sustainability workflows - from Scope 1–3 calculations to CSRD/IFRS-aligned disclosures and AI-generated reduction insights.

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