Breaking news – Sustainable Finance

What’s new in sustainable finance?

🇪🇺 The European Securities and Markets Authority (ESMA) has prioritized regulations on EU Green Bonds and ESG Ratings for 2025, alongside preparations for a sustainability information database. ESMA will establish standards for registering ESG Rating providers, improve transparency on their methodologies, and address conflicts of interest. It aims to tackle greenwashing risks and enhance the quality of ESG disclosures through supervisory tools. ESMA will also support national supervisors in implementing sustainability rules and prepare for the European Single Access Point (ESAP), a central platform for sustainable finance data, by 2026.
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🌏 The UN-convened Net-Zero Asset Owners Alliance (NZAOA) has urged governments to adopt "systemic" reforms to limit global warming to 1.5°C, warning that current policies could lead to a 2.4°C–2.6°C temperature rise by century-end. NZAOA calls for reducing demand for oil and gas, increasing clean energy supply, and phasing out fossil fuel subsidies. It also advocates for clear government commitments and regulatory frameworks for net-zero transition plans, the phase-out of coal-fired power, and scaling blended finance to support climate-vulnerable economies.
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🔍 The United Nations Environment Programme Finance Initiative (UNEP FI) and the Finance for Biodiversity Foundation have launched a collaboration, “Finance for Nature Positive: Building a Working Model,” to help finance operationalize the Nature Positive concept, aiming to halt biodiversity loss by 2030 and recover nature by 2050. The model emphasizes sustainable use, conservation, restoration, and measurable outcomes, addressing market needs like better data and reducing barriers to conservation finance. It supports the Global Biodiversity Framework (GBF) and aims to track nature-related financial flows. Feedback from stakeholders is encouraged to refine the framework further.
👉🏼 https://lnkd.in/eXQnC9Qt

🇪🇺 The European Central bank (BCE) emphasized that despite progress, the world is failing to meet the Paris Agreement’s goal of limiting warming to 2°C, with projections indicating a 2.9°C rise if current trends continue. Frank Elderson underlined the need not only for transition investments but also for adaptation to the physical damages caused by climate change. He emphasized that the ECB has taken concrete steps to integrate climate and nature-related risks into its policies and supervisory framework, though further efforts are still needed to fully address these challenges. He concluded by urging continued adaptation and understanding to address these crises.
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🌏 A report by the Principles for Responsible Investment (PRI) calls for a whole-of-government approach to ensure a successful, socially conscious transition to net-zero. It presents a framework for policymakers to address the socioeconomic impacts of the transition, targeting the root causes of social discontent and inequality. The report emphasizes the need for inclusive policies and stakeholder collaboration. PRI’s director, Margarita Pirovska, highlighted that investors play a crucial role by engaging policymakers to support a sustainable and inclusive economic transition.
👉🏼 https://lnkd.in/ejgXf2zi

🌏 The Taskforce on Nature-related Financial Disclosures (TNFD) plans to launch a discussion paper on transition planning at COP16. Executive director Tony Goldner stated the focus will be on creating "nature-equivalent" transition plans, similar to net zero strategies. The TNFD is working with organizations like the Glasgow Financial Alliance for Net Zero to build on existing frameworks. Nearly 500 companies with $6 trillion in market capitalization and $16 trillion in AUM have joined the initiative. Additionally, TNFD will discuss the development of a 'nature data public facility' at COP16.
👉🏻 https://lnkd.in/e8FYaGQ5

🔍 The latest Climate Action 100+ (CA100+) Net Zero Company Benchmark shows progress in decarbonization by high-emitting sectors like airlines, steel, and autos. CA100+, a collaborative initiative involving over 600 investors, assessed 168 focus companies, with 65% reducing emissions intensity over the past three years. Additionally, 81% of major emitters have set net zero targets for Scope 1 and 2 emissions, and 46% have set Scope 3 targets. Though more action is needed for Scope 3 and faster overall progress.
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🇪🇺 The European Securities and Markets Authority (ESMA) has urged issuers to link financial and sustainability statements including where certain climate-related matters presented in the management report have no effect on their financial statements and vice-versa. This aligns with recent IFRS guidance on recognizing climate commitments in financial reports. ESMA noted that EU-regulated issuers may need to disclose information if the lack of clarity on transition plans affects stakeholders' understanding of financial outcomes. In its 2024 enforcement priorities, ESMA highlighted sustainability reporting under the Corporate Sustainability Reporting Directive and Taxonomy Regulation as key focus areas.
👉🏻 https://lnkd.in/eN-zB2Fi

🔍 The NGFS warns that unclear or sudden climate policies could spur inflation, making it challenging for central banks to manage economic stability. Delayed action on climate poses higher economic risks due to severe physical impacts. Structural shifts from green policies may affect trade and interest rate control, especially for carbon-dependent emerging markets. Ahead of COP29, central banks are urged to refine their analysis of climate risks on monetary policy.
👉🏼 https://lnkd.in/eeqw7Hfz

🌏 Investors managing $2.5 trillion are urging governments at COP16 to enforce stronger biodiversity policies, including mandatory nature disclosures for companies with significant ecological impacts. Led by major pension funds, they call for frameworks focused on biodiversity outcomes, corporate lobbying, and nature-related transition plans. The investors also recommend financial tools and national targets to support biodiversity, with government action deemed essential for market stability and long-term prosperity.
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