What's Happening in Sustainability & ESG (Week Recap 29.04 - 05.05) 🌎

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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:

• Despite the ESG backlash, new evidence shows that major US companies remain committed to sustainability 🇺🇸

• Over $1 trillion in corporate value from the top five global stock exchanges is at risk by 2050 due to rising climate threats in emerging markets 🌍

• ESMA released draft rules under the EU’s ESG Rating Regulation to boost the reliability, transparency, and comparability of ESG ratings 🇪🇺

• A coalition of 30 investors representing $1.6 trillion in assets urged HSBC to reaffirm its climate commitments 🏦

• and other news 🌍

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THIS WEEK’S TOP NEWS

Regulatory Oversight & Industry Insights

🇺🇸 Despite the ESG backlash, new evidence shows that major US companies remain committed to sustainability. A Reuters Events White Paper titled “The State of Sustainability Reporting by US Business in 2025” reveals that 96% of existing corporate sustainability targets are being maintained, with nine in ten investors continuing ESG-focused investments. Interviews with leaders from companies like Autodesk, DuPont, Ford, Microsoft, PayPal, Whirlpool, and others confirm that long-term goals and deeply held corporate values outweigh short-term political pressures. The paper emphasizes that US firms are not only resisting external challenges but are embracing more integrated, systemic approaches to sustainability.

Some key highlights:

Sustainability Reporting Is Now Mainstream

• 99% of the top 100 US companies publish sustainability reports.

• 88% secure third-party assurance.

• 80% request Scope 3 emissions data from suppliers.

The ‘business case’ for sustainability was supported with 74% saying it has a positive impact on revenue growth, and 95% reporting a positive impact on brand value from sustainability initiatives.

Small and Mid-Sized Businesses Are Catching Up

• 75% of mid-sized firms are taking steps to comply with sustainability disclosure requirements.

• 27% of small businesses already undertake some sustainability disclosure.

• 68% of small firms see a positive return on sustainability investments.

Investment Remains Strong Despite Backlash

• $6.5 trillion in ESG-labeled assets in the US by end of 2024.

• 77% of institutional investors are allocating capital to the energy transition or plan to do so within the next two years.

ESG Backlash Is Real, But Not Derailing Progress

• 61% of large companies expect ESG backlash to worsen.

• ‘Greenhushing’ is rising: 26% drop in ESG-related press releases.

• However, 96% of companies are keeping their sustainability goals intact.

Nearly half the companies surveyed are now talking less about ESG and more about “sustainability,” “corporate responsibility,” or “responsible growth.”

Double Materiality Adoption Is Accelerating

• 27% of top companies undertook double materiality assessments in 2024 (tripled from 2023).

• Companies like PayPal, Google, and DuPont see this as transformational for stakeholder engagement and internal decision-making.

Belonging & Workforce Sustainability Are Emerging Themes

• PayPal and Wilson are redefining DEI as employee belonging.

• Wilson uses workforce sustainability to manage hiring and talent development proactively.

Frameworks Still Fragmented, Convergence Needed

• Most companies report using SASB, TCFD, GRI, SDGs.

• Early adopters like Ford apply the EU’s CSRD voluntarily to prepare for global alignment.

• Microsoft and others call for a unified standard to reduce “reporting fatigue”.

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MORE INTERESTING NEWS

Latest developments, reports, insights, and trends

🌍 More than $1 trillion in corporate value from firms listed on the world’s five largest stock exchanges is projected to be at risk by 2050 due to escalating climate vulnerabilities in emerging markets, according to new data from Verisk Maplecroft’s Climate Hazard and Vulnerability Index (CHVI). This marks a stark increase from $34.8 billion today and is largely driven by growing exposure in countries like India, Nigeria, Kenya, and Bangladesh—regions characterized by high poverty, agricultural dependence, and weak infrastructure. India alone accounts for over 95% of corporate assets in “very high” climate risk zones, with the S&P 500 exposed to $818 billion in the country. While companies in Western economies may appear shielded, global supply chains and overseas operations expose them to second-order climate risks such as political instability, food insecurity, and migration pressures. Verisk warns that corporate climate strategies remain blind to these socio-economic dynamics, pricing risk too narrowly at the corporate level rather than where assets are physically located.

🇺🇸 Meanwhile, geopolitical resistance is complicating efforts to address escalating climate risks. The United States is reportedly pushing to weaken a proposed international agreement intended to support developing nations in tackling climate and systemic challenges. Ahead of June’s UN Financing for Development conference, the Trump administration is opposing references to climate change, sustainability, and fossil fuel subsidy phaseouts, and is rejecting reforms to the global financial system. At home, Trump’s 2026 budget plan proposes slashing over $15 billion from renewable energy and carbon capture programs, eliminating $6 billion for EV infrastructure, and drastically cutting funding for conservation, climate science, and environmental justice. These moves have drawn criticism for undermining climate progress and could hinder global cooperation at a time when mounting vulnerabilities threaten the stability of global investment and development.

🇪🇺 The European Securities and Markets Authority (ESMA) published draft Regulatory Technical Standards (RTS) under the EU’s ESG Rating Regulation, outlining proposed rules to enhance the reliability, transparency, and comparability of ESG ratings. The regulation, adopted by the European Commission in late 2024, places ESG ratings providers under ESMA’s supervision, requiring authorization and transparency in methodologies and information sources. The proposed rules cover conflict of interest safeguards, public disclosures, and conditions for offering other services. A consultation on the draft is open until June 20, 2025, with final adoption expected in October.

🏦 The Bank of England (BoE) proposed new measures to strengthen banks’ and insurers’ management of climate-related risks, citing uneven progress since its initial 2019 expectations. The BoE’s Prudential Regulatory Authority (PRA) found that many firms still lack adequate climate risk metrics, have underdeveloped risk management processes, and often don’t treat climate-related risks as material due to insufficient assessment. Key proposals include enhancing scenario analysis capabilities, identifying and addressing data gaps, improving oversight of third-party data, and formalizing climate-related risk appetites with regular board reviews. A consultation on the proposals is open until July 30, 2025.

WHAT ARE COMPANIES DOING?

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

♳ Google parent Alphabet’s X division is partnering with Dow to improve recycling of plastic films and flexible packaging using AI technology—materials that currently see less than a 5% recycling rate in the US, despite 7 million tons ending up in landfills annually. The collaboration combines Dow’s materials science expertise with Google’s machine learning tools to develop AI-powered systems that can identify and sort these plastics more efficiently A pilot is underway at an Oregon recycling plant, and the approach could influence packaging design and recycling processes across the industry.

🌳 Nestlé and ingredients supplier ofi launched a joint cocoa agroforestry partnership aimed at promoting regenerative farming to reduce carbon emissions and combat deforestation. The program, targeting 25,000 farmers across Brazil, Ivory Coast, and Nigeria, focuses on converting farmland to agroforestry systems, implementing climate-smart practices, and managing crop residues. The initiative aims to plant 2.8 million trees and establish over 72,000 hectares of agroforestry, with expected emissions reductions of 1.5 million tons of CO₂ over 30 years.

📊 Brightest and Allianz Commercial announced a global partnership to help businesses improve their carbon accounting, reduction efforts, and climate reporting. Through this partnership, Allianz Commercial clients will gain access to Brightest’s sustainability platform at a reduced cost, enabling automated data collection, emissions tracking, risk management, and decarbonization planning. The collaboration aims to offer companies a comprehensive, technology-driven solution to measure and manage their carbon footprints, assess climate risks, and ensure compliance with evolving frameworks like the GHG Protocol, ISSB, and CSRD.

📊 Datamaran launched DMA Evaluate, a new AI-powered tool designed to help companies continuously update their double materiality assessments, a core requirement under the EU’s CSRD. The solution aims to replace manual, spreadsheet-based processes by identifying changes in ESG risks and opportunities, regulatory shifts, and stakeholder expectations, while streamlining internal reviews and ensuring compliance.

EVERYTHING FINANCE

Sustainable finance, funding rounds, acquisitions & private equity deals

🏦 A coalition of 30 investors representing $1.6 trillion in assets, led by ShareAction, urged HSBC at its AGM to reaffirm its climate commitments, following moves by the bank that raised concerns over its climate priorities. HSBC recently delayed its 2030 net zero goal for operations and supply chains to 2050 and announced a review of interim financed emissions targets, citing slow global decarbonization and external dependencies such as technology and policy. The investor group criticized the bank’s removal of its CSO from the executive committee and lack of clarity on short-term targets but welcomed HSBC’s willingness to engage further on the issue. Meanwhile, HSBC’s sustainability leadership continues to shift, with the departure of Erin Leonard, Global Head of Sustainability at HSBC Asset Management.

🇬🇧 The UK Financial Conduct Authority (FCA) announced it will not currently move forward with extending its Sustainability Disclosure Requirements (SDR) and investment labeling regime to portfolio managers, despite broad industry support. Initially proposed in April 2024, the extension would have applied sustainability-related labeling and marketing rules—originally designed for retail asset managers—to wealth and portfolio management services. However, after reviewing industry feedback, the FCA cited concerns around timing, clarity on rule application, and alignment with other regulations, stating it will take more time to ensure portfolio managers are prepared for implementation.

🏦 The Royal Bank of Canada (RBC) announced it is retiring its C$500 billion sustainable finance target and holding back certain climate-related disclosures, citing recent changes to Canada’s Competition Act aimed at curbing greenwashing. In its 2024 Sustainability Report, RBC cited both concerns about the accuracy of its past sustainable finance calculations and the heightened legal risks under the amended law. The bank also paused reporting on metrics like its energy supply ratio and low-carbon lending progress, noting limited recognized methodologies and an evolving regulatory landscape. The move follows RBC’s exit from the Net-Zero Banking Alliance, raising concerns among climate advocates that financial institutions are weakening climate commitments amid shifting political climates in Canada and the US.

Funding rounds:

🌳 Brazilian reforestation startup Mombak raised $30 million in a Series A funding round to scale its carbon removal operations in the Amazon. Mombak restores degraded farmland to native rainforest, selling carbon credits to global companies like Google and Microsoft. The firm has already planted 5 million trees on 45,000 acres and aims to reach 8 million by June.

🌾 Agtech company Growers Edge raised $25 million in a new investment round. Based in the US, the company provides financial tools for ag retailers, manufacturers, and lenders, including a Crop Plan Warranty Program, digital mortgage products, and climate intelligence tools.

🧪 Chemical recycling startup DePoly raised $23 million to scale its technology for tackling hard-to-recycle plastics. Founded in 2020, DePoly converts post-consumer and post-industrial PET and polyester waste into virgin-quality raw materials using a proprietary chemical recycling process.

🤖 Recycling robotics startup Glacier raised $16 million in a Series A round to accelerate deployment of its AI-powered robots that help increase recycling rates, reduce emissions, and cut waste. Founded in 2019, the San Francisco-based company builds compact robots that identify and sort over 30 materials at 45 items per minute, offering a lower-cost and easier-to-install alternative to traditional recycling systems.

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