This blog is part of a quarterly series on the wide topic of Environmental, Social and Governance and covers items that have caught my attention.
Official announcements
China’s Ministry of Finance, alongside several other of the country’s ministries, central bank, and regulators, announced the release of its new “Corporate Sustainable Disclosure Standard No. 1 – Climate (Trial),” a new standard which follows the main structure of the IFRS S2 climate reporting standard, aimed at enabling companies to report on climate-related risks, opportunities and impacts, and to support China’s green development goals.
A US Administration presidential order in January 2026 directed U.S. federal agencies and departments to with draw from organizations including the United Nations Framework Convention on Climate Change (UNFCCC), the Intergovernmental Panel on Climate Change (IPCC), the International Renewable Energy Agency (IRENA), which supports international cooperation to advance the adoption of renewable energy, and other climate and sustainable development groups including the 24/7 Carbon-Free Energy Compact, the Commission for Environmental Cooperation, the Global Community Engagement and Resilience Fund, the Global Forum on Migration and Development, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, the International Energy Forum, the International Solar Alliance, the International Union for Conservation of Nature, UN Oceans, and the UN Entity for Gender Equality and the Empowerment of Women, among others.
Lawmakers in the European Parliament and Council announced have reached a provisional agreement to introduce a new binding target in the European Climate Law to reduce greenhouse gas emissions by 90% by 2040, on a 1990 basis.
The European Financial Reporting Advisory Group (EFRAG) released its finalised proposed revision of the European Sustainability Reporting Standards (ESRS), aimed at significantly simplifying and reducing sustainability reporting requirements for companies under the EU’s Corporate Sustainability Reporting Directive (CSRD).
The new proposed ESRS would dramatically cut back reporting obligations for companies under the CSRD, with EFRAG reducing datapoints in the standard by more than 70%, and also includes significant simplifications in areas including materiality assessments, and data collection from companies’ supply chains.
Resources, Reports and Announcements
The Global Reporting Initiative (GRI) announced the release of four new exposure drafts of updates to its key standards aimed at enabling companies to disclose on labour rights issues across their value chains, across topics including forced labour, child labour, and labour rights.
According to a new ESMA study, approximately two thirds of funds with ESG terms in their names changed their names, with many dropping ESG terms or using terms with less stringent requirements, and half updated their investment policies, following new guidelines for funds using ESG or sustainability-related terms. The ESMA study follows the release by the regulator in May 2024 of its finalised guidelines for the use of ESG and sustainability-related terms in investment fund names, with a deadline to comply with the new guidelines in May 2025. According to ESMA, the new guidelines were established as investor demand for ESG-focused funds has increased sharply, creating incentives for asset managers to include sustainability-related terms in fund names to attract investors, leading to an increased risk of greenwashing.
COP 30 in Belem, Brazil finished with key outcomes including an endorsement of the need to significantly scale climate finance, with targets to mobilize $1.3 trillion annually for developing countries for climate action by 2035, and an expectation for developed countries to triple adaptation finance to $300 billion per year, although the agreement did not include binding mechanisms to enforce these goals.
It also included a decision to adopt a new just transition mechanism, an initiative aimed at enhancing global cooperation to support workers and communities affected by the energy transition. The text of the agreement for the first time highlighted trade as a key thematic climate action focus area, alongside mitigation, adaptation and finance, signalling an increasing recognition that decarbonisation policies would have increasing trade implications, in areas such as carbon pricing, supply chain standards, and import policies.
The Taskforce on Nature-related Financial Disclosures (TNFD) announced plans to end its technical work program, including its work to develop technical guidance for nature-based reporting, following an announcement by the IFRS Foundation’s International Sustainability Standards Board (ISSB) that it will begin work on standard setting for disclosure requirements on nature-related risks and opportunities.
The TNFD was launched in 2021, building on the success of the Task Force on Climate-related Financial Disclosures (TCFD), to support organizations in reporting and acting on their nature-related risks. The organization published its final recommendations for nature-related risk management and disclosure in September 2023, centred around 14 recommended disclosures, aimed at helping inform better decision-making by companies and capital providers on nature and biodiversity-related risks, opportunities, dependencies and impacts.
To date, more than 730 companies and financial institutions, accounting for more than $9 trillion in market capitalisation and $22 trillion in assets under management have committed to adopt the TNFD recommendations.
The Financial Reporting Council (FRC), the UK regulator for auditors, accountants and actuaries published International Standard on Sustainability Assurance (UK) 5000, “General Requirements for Sustainability Assurance Engagements,” a new standard aimed at ensuring quality and consistency for practitioners in carrying out assurance engagements for sustainability reporting.
The Science Based Targets initiative (SBTi) released its updated draft Corporate Net-Zero Standard V2 – a planned update to its key standard to assess, certify and track companies’ decarbonisation commitments to achieve net zero emissions and to support science-based climate target setting. The new draft aims to enable more companies to set net zero goals by “making science-based climate action more accessible and actionable,” while simultaneously balancing the need to maintain alignment with global climate goals. Among the key changes introduced in the new draft is “a menu of options for companies to drive down their carbon footprint,” including multiple pathways allowed for target setting for direct emissions reductions, and clearer rules for the use of instruments such as carbon credits to reach decarbonisation goals.
The ICMA announced its new guidance for Climate Transition Bonds, introducing transition bonds as a new category of labelled use-of-proceeds instruments – alongside Green, Social, Sustainability, and Sustainability-linked bonds – to enable financing of climate transition strategies and projects, particularly for high-emitting sectors.
The ISSB announced a significant expansion of the Jurisdictional Working Group to enhance compatibility between the development of the standards and other jurisdictional initiatives on sustainability disclosures, focused on facilitating discussions among regulators on enabling the ISSB standards to serve as a global passport, including addressing emerging cross border issues. The expansion of the group responds to the growing number of jurisdictions planning to use the standards, and “the need for a mechanism to help stakeholders discuss global passporting arrangements.” The introduction of passporting provisions, so that jurisdictions accept reports prepared in accordance with the ISSB Standards as issued by the ISSB—accommodating jurisdiction-specific conditions as needed—is expected to help lower costs for preparers and reduce frictions in the system to deliver efficiencies and comparable information for capital markets and preparers.”
The ISSB also released a new “Jurisdictional Rationale Guide” to help jurisdictions as they develop sustainability-related reporting regimes tailored to their specific needs and objectives while contributing to globally consistent and comparable information for capital markets, in addition to an accompanying Jurisdictional Rationale Tool for the development of a clear rationale for using the standards, and to help guide the determination of an adoption roadmap.
European asset manager Amundi has been selected by a coalition of UK Higher Education Institutions (HEIs), led by the University of Cambridge, to launch a cash fund that excludes companies contributing to fossil fuel expansion globally. The new fund will exclude fossil fuel companies, as well as utilities, banks, insurers, and other companies that contribute to fossil fuel expansion. Excluded companies can become eligible to be included in the fund if they stop engaging in or facilitating fossil fuel expansion.
Greenhouse Gas (GHG) reporting framework provider GHG Protocol announced the release of consultations on proposed changes to its guidance and accounting methods underlying reporting of emissions from companies’ purchased electricity and electricity sector actions, forming part of the initiative’s efforts to update its suite of corporate standards and guidance. The new consultations cover the GHG Protocol’s Scope 2 Guidance, updating the initial guidance from 2015, and an update on consequential accounting methods for estimating avoided emissions from electricity-sector actions.
The International Organisation for Standardisation (ISO) announced the launch of “ISO 17298: Biodiversity for organisations,” a new standard aimed at helping organisations to assess and address their biodiversity impacts, dependencies, risks and opportunities. The new standard will help organisations to assess how their activities interact with biodiversity, prioritise actions at both operational and landscape levels, set measurable objectives and monitor progress, and integrate biodiversity into broader sustainability efforts. It was developed by a technical committee including the Taskforce on Nature-related Financial Disclosures (TNFD).
Dun and Bradstreet expanded its ESG rankings, from 42 million public and private companies to 74 million.
Naresh Aggarwal
13 January 2026
