What's Happening in Sustainability & ESG (20.10 - 26.10) 🌎

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 Greenhouse Gas Protocol is facing an internal battle over corporate influence ⚖️

• The ISSB launched a consultation on proposals helping companies disclose material information about nature-related risks and opportunities 📑

• The EU voted to delay methane monitoring and reporting requirements for fossil-fuel importers until 2031 🇪🇺

• Climate plans linked to lower corporate borrowing costs (ITPN research) 🏦

• European companies have reported more than €1.2 trillion of EU Taxonomy-aligned investment since 2023 📈

• and other news 🌍

Regulatory Oversight & Industry Insights

⚖️ The Greenhouse Gas Protocol indicated that companies may continue using its existing Scope 2 accounting method until an undetermined future date, effectively postponing the mandatory application of stricter hourly-matching and local-deliverability requirements. The proposed rules would require companies to match clean-energy purchases more closely with the time and electricity market in which power is consumed, raising the bar for claims that renewable-energy investments compensate for fossil-fuelled operations elsewhere. Only 12% of companies supported hourly matching, while 82% expressed low or no support; just 19% backed the deliverability requirement, compared with 71% expressing low or no support.

Under the direction currently being developed, companies could use the existing system alongside the stricter method during a transition period. “Method 1” would incorporate hourly matching and deliverability requirements, while “Method 2” would retain the current approach based on annual matching and broader geographic boundaries. Companies would disclose which method they use, with the tighter system eventually required where qualifying data is available. Opponents argued that the changes could increase costs, restrict investment in regions where renewable projects may deliver greater emissions reductions and discourage participation in voluntary clean-energy markets.

The proposed delay comes amid an internal battle over corporate influence at the organisation, whose standards underpin climate disclosures used by the EU, California and the IFRS system. Staff accused chief executive Tim Mohin of seeking to weaken the Scope 2 proposals and warned about “corporate capture,” conflicts of interest and attempts to downplay scientific findings, according to the FT. An external review commissioned by the Ikea Foundation, one of the Protocol’s largest funders, separately warned that heavy corporate representation on two governing committees threatened its independence and credibility. The debate is particularly significant for technology companies including Amazon, Microsoft, Meta and Google, whose expanding data centres are increasing electricity demand while they rely on clean-energy investments to support climate claims; Google has backed the tighter accounting approach.

Concerns have also focused on Mohin’s previous role as a BCG adviser on the governance reforms that created the chief executive position he later assumed. Mohin helped draft the role’s job description and advocated a “market acceptance criterion” that would give corporate perspectives a role in shaping standards. The Protocol said its standards follow a transparent, multi-stakeholder process, that Mohin cannot vote on new standards and that no stakeholder can unduly influence the outcome. Revised Scope 2 proposals are expected for consultation in the second quarter of 2027, with the joint GHG Protocol–ISO Corporate Standard anticipated in late 2028.

Latest developments, reports, insights, and trends

📑 The ISSB launched a consultation on proposals helping companies disclose material information about nature-related risks and opportunities, including those arising from their dependencies and impacts on nature. Drawing extensively on the TNFD framework, the proposals emphasize business location and interactions with Indigenous Peoples, local communities and affected stakeholders while connecting nature-related information with climate risks and financial statements. The guidance is proposed as a voluntary Practice Statement, although the ISSB is also seeking views on issuing it as a standard. The consultation closes on February 19, 2027.

🇪🇺 The European Parliament lawmakers voted to delay methane monitoring and reporting requirements for fossil-fuel importers until 2031, three years later than originally planned. The position goes substantially beyond the Commission’s proposed one-year postponement and reflects concerns that importers may struggle to secure sufficient compliant supplies. Parliament also wants to extend deadlines for EU oil and gas operators to provide verified source- and site-level methane measurements.

In related EU news, the European Investment Bank unveiled a plan to provide at least €30 billion for climate adaptation by 2030, doubling its financing pace compared with the previous five years. Investment will support resilient energy networks, buildings, water systems, agriculture and nature-based solutions, with the EIB estimating that every euro invested in adaptation can generate up to €10 in economic benefits.

The European Commission also selected 77 net-zero technology projects across 23 countries to receive €3.4 billion from the EU Innovation Fund. The projects are expected to avoid around 290 million tonnes of CO₂-equivalent emissions during their first decade. Funding covers large-scale industrial decarbonisation, clean-technology manufacturing and pilot projects, including the fund’s first selections involving small modular nuclear reactors and direct air carbon capture and storage.

🇬🇧 The UK established a £2 billion Energy Wealth Fund that will direct North Sea oil and gas tax revenues towards renewable and low-carbon infrastructure. Based within the National Wealth Fund, the initiative will receive additional fossil-fuel revenues over time and aims to support clean-energy investment, jobs, economic growth and energy security. Its launch accompanied approval of the Jackdaw gas field, expected to increase domestic gas production by around 6% at its peak.

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

🏦 Companies publishing comprehensive climate-transition plans paid annual effective interest rates averaging 0.8 percentage points less than businesses without such plans, according to research commissioned by the International Transition Plan Network. The analysis covered nearly 8,000 listed companies globally, including more than 3,300 that disclosed transition-plan components between 2016 and 2024. The relationship was strongest in selected financial-services, real-estate and healthcare markets, although the research did not establish that transition planning directly caused the lower borrowing costs.

♻️ Coca-Cola, Nestlé and Danone agreed to revise recycling claims on plastic bottles following an EU consumer-protection dialogue prompted by a greenwashing complaint. The companies will clarify when claims such as “100% recycled” exclude bottle caps and labels, replace “Recycle me again” with “Recycle me” and ensure labels and digital marketing do not exaggerate plastic bottles’ environmental benefits.

🌳 Google and McKinsey signed ten-year agreements to purchase 320,000 tonnes of carbon-removal credits from Working Trees’ Brazilian silvopasture project. The project will integrate native and commercial trees into cattle-grazing land, restoring 8,700 hectares within a 50,000-hectare area spanning the Amazon and Cerrado.

⚡️ Google also agreed to fund a 1 GW virtual power plant operated by Voltus across PJM, the largest US electricity-grid region. Voltus will aggregate flexible capacity from batteries, smart thermostats, cooling systems and industrial processes at thousands of homes and businesses, temporarily reducing or shifting demand when the grid needs support.

⚛️ Amazon, American Electric Power and X-energy will explore developing a 960 MW advanced nuclear project at the site of a former coal plant in Indiana. The proposed facility would use 12 of X-energy’s 80 MW Xe-100 small modular reactors, with Amazon funding development and serving as the first long-term power customer. The project builds on the companies’ plans to deploy more than 5 GW of advanced nuclear capacity by 2039.

⚡️ Hyundai Motor Securities and Peak Energy launched a joint platform to finance, construct and operate renewable-energy projects for automotive suppliers in South Korea. The venture aims to deploy 100 MW of industrial rooftop solar across hundreds of sites within two years, potentially avoiding 55,000 tonnes of CO₂ annually and more than one million tonnes over the projects’ lifetimes. Five projects have already been secured with Hyundai Tier-1 suppliers.

Solutions

📊 Datamaran launched Applicability Assessment, a tool helping companies determine which regulatory requirements apply across their entities and operating jurisdictions. Part of its Regulatory Monitoring Platform, the feature assesses businesses against existing and proposed mandatory regulations, classifying each requirement as likely, unlikely or uncertain to apply and explaining the criteria used.

🔗 Sweep and Climatiq partnered to help suppliers produce consistent, audit-ready product carbon footprints and enable corporate buyers to replace spend-based Scope 3 estimates with supplier-specific data. The solution integrates Climatiq’s ISO 14067-certified calculation engine into Sweep’s supply-chain platform, allowing suppliers to upload bills of materials and use conversational AI to fill data gaps and match emission factors. The system produces footprints aligned with the PACT methodology, enabling buyers to compare products and identify sourcing and emissions-reduction priorities.

Sustainable finance, funding rounds, acquisitions & private equity deals

🇪🇺 European companies have reported more than €1.2 trillion of EU Taxonomy-aligned investment since 2023, but capital remains unevenly distributed across countries, sectors and supply chains. Companies recorded €512 billion in green and transition investment during 2025, while EU bank green lending reached €1.23 trillion in 2024, up 36% in one year. Electricity infrastructure accounts for almost half of aligned investment, but the report identifies shortages of risk-bearing finance and limited access for smaller companies as barriers to the next phase of the transition.

🇨🇦 Canada’s sustainable-finance taxonomy council deferred a proposed oil and gas “abatement” category after stakeholders raised concerns about carbon lock-in, stranded assets and international interoperability. The final methodology establishes “green” and “transition” classifications but calls for additional research beginning in 2027 before determining whether emissions-reduction activities in the fossil-fuel sector should qualify. Initial sector criteria will cover electricity, buildings and transport, followed by mining, manufacturing, agriculture and forestry.

🌱 Citi structured a $72 million Carbon Removal-Linked Note to finance an Applied Carbon biochar project, with investor returns tied to the credits it generates. Rather than receiving traditional coupons, investors will receive payments linked to the issuance and delivery of carbon credits. Applied Carbon’s mobile platform processes crop residues directly in agricultural fields into biochar, enabling long-term carbon storage while improving soil fertility.

Startup funding rounds

🔌 Peak Energy raised $108 million to scale domestic manufacturing of its sodium-ion battery systems and expand into the data-centre power market. The passively cooled systems require no water or planned maintenance and are designed to reduce energy costs by up to 20% compared with conventional storage.

🌤️ Optivolt raised $32 million to expand its intelligent solar-panel technology across residential, utility-scale and data-centre projects. Its platform integrates power management, monitoring and safety functions directly into panels, while redistributing energy between groups of cells when shade, dirt, weather or degradation reduces performance.

♨️ Elax Energie raised €30 million to expand technology that connects electric water heaters to software, reducing energy consumption while turning household heating equipment into flexible grid assets. The company will accelerate deployments with social-housing providers, electrify collective boiler rooms and launch a network for tradespeople serving individual homes.

⚛️ Hephaestus raised $17.2 million to develop rare-earth-free high-temperature superconductors and a lower-cost fusion reactor design. The company is combining AI-discovered superconducting materials with “negative triangularity” plasma, which it says could reduce the cost and complexity of fusion systems.

⚡️ Cambridge Heavy Industries raised $6.2 million to construct its first compact, laser-based fusion reactor in Massachusetts. The MIT spinout is initially targeting the production of tritium, a scarce fusion fuel valued at approximately $33 million per kilogram, before pursuing fusion-energy generation.

🌳 Epoch raised $4.25 million and launched a self-service solution helping smaller businesses comply with the EU Deforestation Regulation. The platform uses geospatial AI and automated research to identify supplier facilities, locate the plots where raw materials originate and assess deforestation and legal-compliance risks, reducing reliance on questionnaires.

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