As global momentum around ESG continues to accelerate, our June edition of Sustainability Watch brings you a comprehensive roundup of the most impactful regulatory developments, policy shifts, and market trends shaping sustainability across regions. From sweeping ESG reforms in the Middle East and Africa to evolving climate disclosure frameworks in Asia-Pacific, and legal reversals in the U.S., this issue captures the pulse of ESG transformation worldwide. Here’s a regional snapshot of key updates:
Europe
June saw significant ESG regulatory developments unfolding across Europe. The EU advanced negotiations on the Omnibus Simplification Package, proposing major revisions to the CSRD and CSDDD. A key change includes raising the reporting threshold to companies with over €450 million in turnover, potentially exempting thousands of firms. The European Commission unexpectedly announced plans to withdraw the Green Claims Directive, raising concerns among stakeholders about the fight against greenwashing. EFRAG continued its efforts to streamline the ESRS, releasing an exposure draft and progress report aimed at reducing mandatory datapoints while preserving reporting quality. In the UK, London Climate Action Week served as a platform for launching consultations on climate transition plans for financial institutions and FTSE 100 companies, as well as on sustainability assurance standards. The UK also introduced new Sustainability Reporting Standards aligned with IFRS S1 and S2. Basel Committee released a voluntary framework for climate-related financial risk disclosures, encouraging flexible adoption by jurisdictions. The IFRS Foundation published guidance on climate transition disclosures, building on the UK’s Transition Plan Taskforce work. ESMA issued thematic notes addressing misleading sustainability claims, the European Commission updated technical screening criteria under the EU Taxonomy, and ICMA released new guidance on nature-related sustainable bonds, further enriching the ESG regulatory landscape.
North America
In the USA, the Supreme Court narrowed the scope of federal environmental review under the National Environmental Policy Act, potentially easing approval for infrastructure and energy projects. EPA advanced regulations targeting PFAS, or “forever chemicals,” in water and soil, signaling continued concern over environmental health. The Department of Labor indicated a reversal of ESG investment rules, reigniting debates over fiduciary duty and sustainable investing. Under the Trump administration, several Biden-era climate and clean energy initiatives are being rolled back. The EPA proposed repealing emissions standards for fossil fuel power plants, arguing that greenhouse gas emissions do not significantly contribute to harmful air pollution. The Department of Labor is reconsidering rules that allowed retirement plans to factor ESG criteria into investment decisions, while the SEC is withdrawing proposed ESG fund disclosure requirements. The Department of Energy terminated $3.7 billion in clean energy grants, citing economic infeasibility.
South America
South America continued to advance its ESG agenda, with Brazil and Chile taking prominent steps toward corporate transparency and climate accountability. Both countries are aligning with the ISSB framework, particularly focusing on Scope 3 emissions and climate-related financial disclosures. The IFRS Foundation’s jurisdictional profiles highlighted growing adoption of ISSB-aligned standards across Latin America, signaling a regional shift toward harmonized global ESG reporting. Chile reinforced its climate leadership by implementing strong public policies, including a ban on single-use plastics, ratifying the Escazú Agreement, and committing to carbon neutrality by 2050. Brazil faced setbacks as its Senate approved Bill 2159/2021, which weakens environmental protections by simplifying licensing and exempting small-scale activities. The bill has drawn criticism for threatening forests, wildlife, and Indigenous communities, and for prioritizing economic development over environmental conservation.
APAC & Oceania
Japan amended its Rational Use of Energy Act, introducing stricter corporate energy efficiency reporting requirements. It also released new guidelines to enhance environmental impact assessments in the High Seas and address supply chain sustainability concerns. Singapore launched Gprnt, a government-backed digital platform that automates sustainability reporting for businesses, particularly SMEs, enabling them to calculate Scope 1 and 2 emissions using publicly available data. In Oceania, Australia’s ASIC continued promoting Regulatory Guide 280, reinforcing mandatory sustainability disclosures under the Corporations Act. Meanwhile, the Bank of Thailand unveiled Phase 2 of its sustainable finance taxonomy, expanding classifications to include high-emission sectors such as agriculture and manufacturing. China continued to strengthen its sustainability disclosure framework in alignment with IFRS standards, alongside broader green finance and technology initiatives.
Middle East & Africa
The BNP Paribas ESG Survey highlighted a strong institutional shift toward thematic and impact-driven investment strategies, reflecting growing commitment to sustainable finance. Policymakers across the region explored frameworks for a “just transition,” aiming to ensure that climate action supports workers and vulnerable communities. In the Middle East, regulatory momentum was evident as the UAE’s Dubai Financial Services Authority and Abu Dhabi Global Market issued consultation papers on climate transition planning and digital asset regulation. Kuwait and Saudi Arabia progressed with ESG-related financial reforms. Oman introduced mandatory ESG reporting for all public joint stock companies listed on the Muscat Stock Exchange, while Qatar’s QFC Regulatory Authority launched the GENE Corporate Sustainability Reporting Rules, aligning with IFRS S1 and S2 standards. In South Africa and Kenya, ESG disclosure mandates continued to evolve, aligning more closely with global standards to attract sustainable investment. Nigeria advanced its ESG requirements in high-impact sectors like mining and energy. In Uganda, the government operationalized its Climate Change Act of 2021 by launching National Carbon Market Regulations, enabling participation in global carbon markets and reinforcing its climate commitments.
