What's Happening in Sustainability & ESG (Week Recap 26.08 - 02.09) 🌎

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:

• France and Germany push for more ‘simplification’ in EU sustainability rules 🇪🇺

• Global renewable energy investment hit a record $386 billion in 1H 2025, up 10% year-on-year ⚡️

• Singapore delayed mandatory climate reporting, giving smaller firms up to five more years 🇸🇬

• The Net-Zero Banking Alliance paused operations and proposed dropping its membership-based model 🏦

• No environmental shareholder proposals were passed in the US this proxy season, the first time in six years 🇺🇸

• and other news 🌍

PRESENTED BY REUTERS EVENTS

Reuters Events: Sustainability Reporting USA 2025 (October 9–10, Boston)

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Find out more by visiting the event website here

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 This week we highlight key developments in Europe: France and Germany called for easier sustainability rules, the bloc moved CBAM closer to its 2026 compliance phase with new consultations; Maersk and others flagged uncertainty around CSRD simplifications; ExxonMobil attacked EU climate policies as too costly; and Professor Andreas Rasche warned that the simplification agenda risks sliding into deregulation.

France and Germany push for more “simplification”

France and Germany issued a joint call for major “simplifications” in EU sustainability rules. Their demands included targeted revisions to the Urban Wastewater Treatment Directive to reduce costs, a pragmatic overhaul of REACH to ease regulatory strain on chemical producers, and faster progress on the Omnibus Simplification packages. They also backed a “1-for-1” rule to offset new reporting obligations with cuts elsewhere. While presented as a competitiveness boost, critics warn that reframing sustainability regulation as a cost burden risks undermining Europe’s long-term climate and industrial strategy.

CBAM prepares for its next phase

The European Commission launched three consultations in preparation for the Carbon Border Adjustment Mechanism’s (CBAM) compliance phase starting January 1, 2026. Key focus areas include: (1) how to account for carbon prices already paid abroad, with rules for rebates, exchange rates, and eligible schemes; (2) adjustment of CBAM obligations to reflect free allowances under the EU ETS, with benchmarks not expected until 2026; and (3) a revised CBAM methodology to simplify reporting, expand the use of actual emissions data, and introduce default product and country values with markups. Stakeholders, from EU firms to non-EU regulators, can provide feedback until September 25, ahead of Q4 2025 adoption.

CSRD simplifications continue to spark uncertainty

Maersk’s CSRD lead Prianka Christiansen warned of a looming “tug-of-war” between companies and auditors as EU sustainability reporting standards undergo revision. She cautioned that firms which already reported under the original ESRS now face uncertainty about whether they can adopt proposed simplifications before official approval. Dropping indicators previously deemed material could undermine credibility, she said. Meanwhile, EFRAG’s Liad Ortar suggested shifting some disclosures to appendices could help by limiting auditor scrutiny. EFRAG will hold an outreach session with companies on September 10 to gather further feedback.

ExxonMobil doubles down on EU critique

ExxonMobil intensified its attacks on EU climate regulation, arguing in its Global Outlook report that excessive rules raised energy costs, damaged competitiveness, and weakened public support for decarbonisation. CEO Darren Woods has lobbied Trump to challenge EU supply chain rules in trade talks, while urging policymakers to focus on affordability. Brussels insists it will cut administrative burdens but not climate ambition. Critics like Mario Draghi argue that decarbonisation is an economic opportunity, while environmental groups accuse Exxon of greenwashing and resisting inevitable change — warning that shareholder pressure may ultimately force a pivot.

Andreas Rasche: “Simplification” is deregulation in disguise

Professor Andreas Rasche outlined 10 lessons from the EU’s sustainability rule overhaul, warning that recent reforms risk being politically motivated rather than evidence-based. He highlighted rushed changes to CSRD and CSDDD before meaningful implementation data was available, creating the perception of deregulation masked as simplification. Over-reliance on company headcount as a threshold leaves high-impact sectors like agriculture and real estate undercovered, while labor-heavy industries are hit disproportionately. Poor sequencing of CSRD, SFDR, and the Taxonomy added confusion, while the lack of clear communication on the value of sustainability rules fueled competitiveness concerns.

Rasche stressed that vague problem definitions, limited consultation, and bypassed impact assessments eroded trust. He cautioned that the “simplification” narrative is being used as a euphemism for cost-cutting. Instead, he urged policymakers to emphasize the business value of sustainability reporting — from risk management to investor confidence — and to pursue evidence-driven technical refinements. Done right, the Omnibus process could improve the framework without dismantling it.

PRESENTED BY ECONOMIST IMPACT

Economist Impact’s Sustainability Week Europe

October 6th-7th, 2025 | Amsterdam

Economist Impact’s Sustainability Week Europe, brings together leaders in business, policy and innovation to share case-studies, insights and ideas about climate solutions that work for business and the planet. With more than 120 speakers, 500 in-person attendees, 25 case studies, the Sustainability Week Europe presents original insights and practical solutions. Meet the most influential industry leaders, policymakers and innovators.

Event website link
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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

⚡️ Global renewable energy investment hit a record $386 billion in 1H 2025, up 10% year-on-year, driven by offshore wind ($39B) and small-scale solar, according to BloombergNEF. Utility-scale solar and onshore wind financing fell 13%, with declines in China, Spain, Greece, and Brazil amid curtailment risks and negative power prices. In contrast, small-scale solar surged in China and other markets due to quick deployment ahead of policy shifts. The US saw the steepest drop, down 36% from 2H 2024, as developers paused after rushing to secure tax credits before deteriorating policy and tariff uncertainty. Europe gained momentum, with EU-27 investment rising 63% as capital shifted from the US to offshore wind in the North Sea. China remained the largest market with 44% of global investment, while Southeast Asia and parts of Latin America posted modest gains.

🇸🇬 Singapore announced major delays to the rollout of mandatory climate-related reporting, easing requirements for smaller companies by up to five years. While all listed firms must still disclose Scope 1 and 2 emissions from FY2025 and the largest listed companies will report Scope 3 emissions from FY2026, most other ISSB-based disclosures are now postponed, with Scope 3 remaining voluntary until further notice. Under the revised plan, full ISSB-aligned reporting begins in FY2028 for listed companies with market caps above $1 billion and FY2030 for those below, while large non-listed companies’ obligations shift to FY2030 with external assurance on Scope 1 and 2 emissions delayed to FY2032.

WHAT ARE COMPANIES DOING?

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

⌚️ A German court barred Apple from marketing its Apple Watch as “CO₂-neutral,” ruling the claim misled consumers. The case, brought by Deutsche Umwelthilfe, argued Apple’s reliance on a Paraguayan eucalyptus offset project was flawed, with leases expiring in 2029 and limited ecological integrity. The court said such offsets offered only short-term storage, calling the claim greenwashing. Apple defended its climate approach but may drop the label ahead of EU rules from 2026 that restrict “carbon neutral” claims without strong scientific proof. Critics say monoculture plantations harm biodiversity and water resources, with similar projects backed by Meta and Microsoft also under scrutiny.

⚡️ Equinor pledged up to $941 million to back Ørsted, signaling a push for deeper ties as both offshore wind giants face US regulatory setbacks. The Norwegian state-backed energy firm, already a 10% shareholder, said closer collaboration could unlock value amid industry consolidation and plans to nominate a board candidate at Ørsted’s next AGM. The capital raise, set for shareholder approval Friday, comes after Ørsted’s Revolution Wind project and Equinor’s Empire Wind 1 were halted by the US authorities.

🟢 Frontier signed $31 million in carbon removal agreements with Planetary, a company that removes atmospheric CO₂ and reduces local ocean acidity by adding dissolved alkaline minerals to seawater. Planetary will deliver 115,000 tons of carbon removals between 2026 and 2030 using its ocean alkalinity enhancement (OAE) process, which stores carbon in the ocean for over 10,000 years while easing acidification and supporting marine ecosystems.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

📈 No environmental shareholder proposals passed in the US this proxy season, the first time in six years. A Conference Board/Esgauge report shows investor backing for green resolutions has fallen sharply: successful proposals peaked at 14 in 2022, dropped to 2 in 2024, and now stand at zero in 2025. Filings also declined to 110 this year, with average investor support sinking to 10% from 18% last year. The shift reflects political backlash against ESG, lawsuits targeting asset managers like BlackRock and Vanguard, and pressure on proxy advisers ISS and Glass Lewis. Experts note that climate engagement is shifting from shareholder resolutions to dialogue and collaboration, though advocates insist the decline is a pause, not a retreat, in investor climate activism.

🏦 The Net-Zero Banking Alliance (NZBA), a UN-backed coalition of banks, has paused operations and proposed dropping its membership-based model after a wave of high-profile exits. Once representing over 140 banks with $74 trillion in assets, the group has faced mounting political pushback and a string of departures including Goldman Sachs, major Wall Street peers, Canadian banks, and more recently HSBC, UBS, and Barclays. The group, which had already loosened its requirements earlier this year by dropping mandatory alignment of lending and capital markets with 1.5°C pathways, is now seeking to transition into a framework initiative, with a member vote on the proposal due in September.

📈 Dutch financial group Aegon launched the Aegon Investment Grade Climate Transition Fund, aiming to ‘deliver returns while backing the global shift to a low-carbon economy.’ The strategy will primarily invest in global investment-grade corporate bonds, with scope for selective high-yield and cash allocations, targeting outperformance of the Bloomberg Global Aggregate Corporate Index over rolling 36-month periods.

🔌 Blackstone will acquire Shermco, a leading provider of electrical equipment services. Texas-based Shermco delivers testing, maintenance, commissioning, and repair services across the US and Canada for customers in data centers, utilities, and industrial markets, with an emphasis on safety, reliability, and efficiency.

Funding rounds:

⚡️ Commonwealth Fusion Systems raised $863 million in a Series B2 round to accelerate its push toward commercializing fusion energy. Proceeds will fund completion of its SPARC reactor in Massachusetts and the ARC power plant in Virginia, planned to deliver grid power in the early 2030s with partners Dominion Energy and Google, which will also buy half its output.

⚡️ Aalo Atomics raised $100 million in a Series B round to build its first nuclear power plant aimed at meeting the surging energy demands of AI. Founded in 2023, the Texas company develops modular, sodium-cooled reactors designed for rapid deployment, high energy output, and simplified safety, with plans to initially serve data centers before expanding into utilities and industrial markets.

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