Sustainability Update

Official announcements

• The UK government announced the launch of a major overhaul of its corporate reporting system, including significant potential changes to non-financial disclosure requirements by companies, such as proposals to remove mandatory reporting on issues including environmental impact, employee diversity, social responsibility, and human rights from its core law governing corporate reporting. 
  
  While reporting on these topics would still be required where financially material, it could change which companies are required to provide non-financial disclosures in areas including environmental, social and human rights matters and climate-related financial disclosures, with the government stating that it is testing the establishment of a new “very large” company threshold to simplify which companies are covered by certain non-financial reporting obligations. 
  

  The consultation closes on 30 November 2026. 
  

• The Financial Conduct Authority (FCA) released finalised rules for listed companies to begin climate and sustainability-related reporting in line with the UK’s new IFRS-based Sustainability Reporting Standards (UK SRS), choosing to allow companies to take a “comply-or-explain” approach, instead of a mandatory approach for climate reporting initially proposed by the regulator. 
  
  The FCA said it selected the comply-or-explain approach following feedback raising concerns that mandatory application of the climate-related reporting standard could place disproportionate burdens on smaller companies, and that disclosures by smaller companies whose business models were not materially impacted by climate or sustainability matters were often of limited use to investors.
  

Resources, Reports, and Announcements

• According to a new report released by the UN Environment Programme (UNEP), the goal to limit global temperature increase to 1.5°C, identified as the threshold to avoid the most significant impacts of climate change, is now out of reach, with a best-case scenario now at 1.8°C.

  Despite expectations to surpass the 1.5°C threshold, the report, “Limiting Overshoot,” maintains limiting long-term average warming to 1.5°C as the global goal, identifying an “overshoot, peak and decline” pathway, returning to the target level through achieving net negative GHG emissions, as the “best remaining option.”

  The report cites estimates that predict that median projected global warming reaches around 2.6°C by 2100 under current policies, and notes that “even under one of UNEP’s most optimistic scenarios, which assumes implementation of all NDCs and long-term net zero targets, central global warming estimates peak at around 1.8°C.”

• Issuance of green bonds globally reached a new record in the second quarter of 2026, hitting $193 billion in the quarter, driven by strong growth by European issuers, and lifting overall issuance of labelled sustainable bonds higher compared to the same quarter last year, according to a new report released by Moody’s.
  
  While a much smaller segment of the sustainable finance market, blue bond issuance also hit record levels in the first half of the year, already surpassing total volumes for all of 2025, while sustainability and sustainability-linked bond volumes declined year-to-date, according to the report.

• The GHG Protocol issued a report following its consultation in 2025 on proposed changes to its initial 2015 Scope 2 Guidance, which standardised how companies measure emissions from purchased or acquired electricity, steam, heat and cooling.

  
  Among the most significant changes proposed by GHG Protocol were the introduction of new hourly matching and local market deliverability requirements for market-based reporting on emissions from energy contracts and instruments, which the organisation said would help align emissions claims more closely with the time and place electricity is consumed. The Hourly Matching proposal would require organisations using contractual instruments to match them to electricity consumption hourly, while the Deliverability proposal would require those instruments to come from renewable electricity that can be delivered to the same electricity market where the electricity is consumed.

  
  Responses to the consultation indicated low support by companies for both of these proposals. Only 12% of companies said that they support hourly matching, and 82% indicated low or no support, while 19% supported the deliverability proposal, with 71% indicating low or no support.

  
  Support was slightly higher when including all organization types (companies account for slightly less than half of respondents), but still low overall, with only 22% of all organizations supporting Hourly Matching and 30% supporting deliverability.

• The International Organisation for Standardisation (ISO) and Greenhouse Gas Protocol (GHG Protocol) announced that they will combine their corporate carbon accounting standards into a single, harmonised global accounting standard following the creation of a strategic partnership between ISO and GHG Protocol. This was aimed at unifying the global standards used by companies for greenhouse gas emissions measurement and reporting, addressing the fragmentation of standards and policies as a barrier to climate action by providing a harmonised global language for emissions accounting, simplifying processes for companies, increasing consistency for policymakers, and generally reducing measurement and reporting burdens.

  
  They are aiming to publish a single, co-branded corporate standard, with an integrated public consultation on the future corporate standard planned for Q2 2027.  The new standard will combine GHG Protocol’s Scope 1, Scope 2, Scope 3, and Actions and Market Instruments (AMI) standards with ISO’s 14064-1 (Greenhouse Gases) standard.