What's Happening in Sustainability & ESG (Week Recap 28.01 - 03.02) 🌎

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:

• The EU unveiled its Competitiveness Compass, a multi-year strategy aimed at strengthening the bloc’s industrial competitiveness 🇪🇺

• Omnibus (part of the Competitiveness Compass) drama continues as investors urge the EU to uphold regulations 🇪🇺

• Global investment in low-carbon energy transition surpassed $2 trillion for the first time last year ⚡️

• Shell dominated the global carbon credit market in 2024, retiring 14.9 million carbon credits 🛢️

• and other news 🌍

Announcing our new Interview Series! 🎉 

We’re excited to launch our new bi-weekly feature showcasing conversations with the industry’s leading voices—CSOs, sustainability executives, and senior professionals shaping the sustainability landscape. Each edition dives into their professional journeys, hands-on insights, and perspectives on the challenges and opportunities defining corporate sustainability.

From now on, our Green Digest Impact newsletter will now be bi-weekly:

✅ One week: Green Digest Interview Series – expert insights from top industry leaders.

✅ The next week: Green Digest Impact – deep dives on companies’ environmental and social impact.

These interviews are designed to be quick, insightful reads, offering actionable takeaways and a personal glimpse into the people leading the way. We’re kicking things off this Friday with Sorouch Kheradmand, Global Head of Sustainability at Schneider Electric. Don’t miss his insights on how businesses can turn sustainability into a competitive advantage!

THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇪🇺 Last week, the European Commission unveiled its Competitiveness Compass, a multi-year strategy aimed at strengthening the EU’s industrial competitiveness while balancing climate commitments. The plan includes cutting red tape, supporting clean technology, and boosting key industries like steel, chemicals, and automotive to compete with the US and China. A major focus is reducing sustainability reporting burdens through the upcoming Omnibus package, which will ease CSRD, CSDDD, and Taxonomy Regulation requirements—reducing reporting burden by 25% for large companies and 35% for SMEs. The EU will also propose a Clean Industrial Deal, launching alongside the Omnibus, aimed to drive investment in low-carbon industries, energy transition technologies, and resource efficiency, and favoring European firms in public procurement.

Despite the changes, Commission President Ursula von der Leyen reaffirmed the EU’s Green Deal commitments, including a 55% emissions cut by 2030 and net zero by 2050. The plan also introduces flexibility for the automotive sector, reviewing CO₂ targets and potential fines, but critics warn that excessive deregulation could undermine long-term sustainability goals. Others see the strategy as a response to geopolitical and economic shifts, including the US’ evolving climate stance under President Trump.

Today (February 4), a group of investors managing €6.6 trillion in assets urged the EU Commission to maintain the integrity of sustainable finance regulations amid concerns over proposed changes in the upcoming Omnibus Package. A coalition of over 200 financial sector actors, including the Institutional Investors Group on Climate Change (IIGCC), Eurosif, and the Principles for Responsible Investment (PRI), warns that reopening key ESG regulations could create regulatory uncertainty, weaken investor confidence, and jeopardize Europe’s Green Deal objectives. While supporting targeted adjustments to technical standards and clearer implementation guidance, investors stress that a stable regulatory framework is crucial for long-term capital allocation and Europe’s net-zero transition. With the EU facing an €800 billion annual investment gap, they argue that consistent and high-quality corporate disclosures are essential to mobilizing private capital and maintaining Europe’s economic competitiveness.

Unlock exclusive benefits and support Green Digest by becoming a Pro Supporter. Your contribution empowers us to keep you informed in this transformative era.

MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

⚡️ Global investment in low-carbon energy transition surpassed $2 trillion for the first time last year, hitting $2.1 trillion, but still falls significantly short of the $5.6 trillion per year required to align with mid-century net-zero targets. While investment grew by 11%—mostly driven by renewables, power grids, electrified transport, and energy storage—it lagged the previous three years’ faster growth rates. China led with $818 billion, up 20% from 2023. Experts warn far greater investment in areas like industrial decarbonization, hydrogen, and carbon capture is needed to meet climate goals, especially as the US exits the Paris Agreement under President Trump’s administration.

📑 The IFRS Foundation published a new guide to support companies applying ISSB standards for sustainability reporting with initial disclosures focused solely on climate-related information. The guide focuses on the “climate-first” transition relief, which allows companies to begin reporting under IFRS S1 with only climate-related disclosures before expanding to broader sustainability topics. Key areas covered include materiality considerations, climate risk disclosures, metrics and targets, sources of guidance, and technical aspects like reporting location and timing.

🇨🇭 Switzerland set a new climate goal to reduce GHG emissions by 65% by 2035, compared to 1990 levels. This target will form the basis of the country’s second Nationally Determined Contribution (NDC) under the Paris Agreement, to be submitted to the UNFCCC by February 10. The new goal builds on Switzerland’s current NDC of a 50% emissions reduction by 2030 and includes an interim target of a 59% reduction between 2031 and 2035.

WHAT ARE COMPANIES DOING?

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

🛢️ Shell dominated the global carbon credit market in 2024, relying more heavily on offsets than any other sector as oil and gas companies scaled back clean energy spending. Shell retired 14.9 million carbon credits, more than twice as many as the next-largest user, Eni, and nearly three times more than Microsoft. The fossil fuel sector accounted for over 40% of retired credits in 2024, up from the previous year. Voluntary carbon markets face scrutiny over fraud, double-counting, and flawed methodologies, leading some energy companies to pause new credit purchases while using existing stock. Meanwhile, tech firms like Microsoft continue expanding offset programs to counter growing AI-driven emissions. Shell’s retired credits primarily stem from projects that avoid hypothetical emissions, such as preventing deforestation.

🟢 Microsoft and carbon removal startup Chestnut Carbon signed a 25-year agreement for more than 7 million tons of nature-based carbon removal credits—making it the largest-ever voluntary corporate investment in US conservation forestry, according to Chestnut. The deal will restore roughly 60,000 acres of marginal land in Arkansas, Texas, and Louisiana by planting over 35 million native trees, enhancing biodiversity, wildlife habitats, and local communities.

Zurich Insurance Group also signed its largest carbon removal purchase agreement to date with biochar-focused startup Nellie Technologies, committing to buy up to 17,500 tons of carbon removal credits over five years. Nellie Technologies, founded in 2022, produces biochar from algae using proprietary technology, sequestering carbon while generating carbon dioxide removal certificates (CORCs) for voluntary and compliance markets. Under the agreement, Zurich will purchase CORCs from Nellie’s UK operations, supporting the company’s scale-up, including pilot site expansion and increased CO₂ removal capacity.

♻️ Repsol will invest over €800 million in a new green methanol plant (Ecoplant) in Tarragona, Spain, aiming to process up to 400,000 tons of municipal solid waste annually into 240,000 tons of renewable fuels by 2029. The project is partially funded by the EU’s Innovation Fund and is expected to save around 3.4 million tons of CO₂ within its first decade. This announcement follows Spain’s decision to end a 1.2% windfall tax on large energy firms—an extension of which Repsol and other major energy companies argued would jeopardize billions in renewable energy investments. Repsol had previously put €1.5 billion in green hydrogen and waste-to-energy projects on hold, threatening to cancel them if the tax became permanent. Increasingly, fossil fuel companies like Repsol are turning to next-generation renewable fuels—such as those derived from waste—to meet climate and regulatory targets.

🤝🏻 Mining giant Rio Tinto and Norway-based aluminum producer Norsk Hydro are teaming up to explore carbon capture solutions aimed at cutting carbon emissions in aluminum production. Over the next five years, the partners expect to invest $45 million in research—conducted primarily at Rio Tinto’s European sites and Hydro’s facilities in Norway—to identify and test carbon capture technologies for aluminum electrolysis. Both companies will share costs, results, and technology insights with the goal of developing commercially viable carbon capture methods.

🏦 Royal Bank of Canada (RBC) withdrew from the UN-backed Net-Zero Banking Alliance, joining other Canadian peers like TD Bank, Bank of Montreal, National Bank of Canada, and CIBC, who left earlier this month. The banks say they can pursue their own climate strategies outside the coalition.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

📈 Norway’s $1.8 trillion wealth fund remains committed to renewable investments despite a -10% return on its unlisted renewable energy assets in 2024, including stakes in Orsted’s offshore wind farms and Iberdrola’s portfolio. The fund sees long-term value in renewables, particularly offshore wind, while also exploring grid and storage technologies. With renewable assets now cheaper in public markets, it has merged its listed and unlisted renewables teams to seize new opportunities. Since 2020, the fund has been allowed to invest in unlisted renewable projects in Europe and the US and, after a cautious start, is now seeing more attractive deals as its renewables team expands.

📑 Vanguard updated its proxy voting policy for US portfolio companies, softening its language on board diversity expectations. The new policy removes prior explicit requirements for diversity in gender, race, and ethnicity and shifts language on director disclosure from specifying race and ethnicity to a broader understanding of board composition. The changes come amid increasing legal and political scrutiny of corporate DEI policies. While Vanguard stated the updates reflect evolving regulations, it emphasized that its policies remain focused on corporate governance practices that support long-term shareholder returns.

📈 Manulife Investment Management closed its Manulife Forest Climate Fund LP with $480 million in commitments, focusing on sustainably managed forests where carbon sequestration is prioritized over timber production. Launched in 2022, the fund invests in a globally diversified forestland portfolio to generate carbon credits and long-term timber value through afforestation and reforestation. Manulife aims to sequester over 6 million tons of CO₂ while delivering financial returns through carbon value and asset appreciation. The fund is nearly 50% deployed, with over 150,000 acres acquired and additional investments planned for 2025.

🟢 Paris-area public transport authority Île-de-France Mobilités issued a €1 billion green bond, the first public entity issuance under the new European Green Bond (EuGB) Regulation. The bond follows the EU’s November 2023 adoption of the EuGB framework, which establishes strict transparency and investment criteria to align green bond proceeds with the EU Taxonomy and combat greenwashing. The funds will support sustainable public transport projects, including network modernization, electric trains, trams, low-emission buses, and infrastructure aimed at reducing regional transport emissions by 25-30% by 2030.

Funding rounds:

⚡️ Fusion energy company Helion raised $425 million in an oversubscribed Series F round to accelerate commercialization of its breakthrough fusion technology. Helion recently began operating its 7th generation prototype, Polaris, which is expected to demonstrate the first electricity production from fusion. The company plans to build its first fusion power plant in Washington and has a 50 MW power purchase agreement with Microsoft for 2028 and a 500 MW project with Nucor for the 2030s. Investors see Helion as a frontrunner in bringing commercial fusion energy to market, with the potential to revolutionize the energy industry.

🪨 Earth AI, an AI-driven clean energy metals explorer, raised $20 million in Series B funding to advance its AI and drilling technology. Founded in 2017, the company uses AI to rapidly identify critical metal deposits and validate them through low-cost, environmentally friendly drilling. Earth AI reports a 75% discovery success rate, far exceeding the industry average of 0.5%, while cutting exploration costs by up to 80%. The company plans to scale its operations by expanding its project pipeline to over 50 sites and increasing drilling capacity to 100,000 meters at $100 per meter. Earth AI’s model focuses on selling discovered mining rights to large-cap companies, positioning itself as a disruptive force in mineral exploration for the energy transition.

📊 Sightline, a market intelligence platform for climate transition decisions, raised $5.5 million in seed funding to scale its platform. Launched in 2023, Sightline provides corporates, investors, banks, and governments with data, insights, and tools to navigate sustainability transitions in energy, transportation, and industry. The platform delivers deal news, company activity, and climate economy reports, integrating project and funding data with expert analysis. The new funding will expand research capabilities, sector coverage, and AI-driven tools while growing the team.

PARTNER WITH US

Increase your brand awareness and visibility by reaching the right audience and target market. Showcase your company, solutions, services, products, reports, surveys, events, or other content in front of our highly targeted audience of +4,000 Sustainability & ESG professionals. Contact us at [email protected] if you think we can partner in some way.