Watch a replay of our webinar ‘How treasury teams can embed and promote their company’s transition plan’.

This training session explored key questions that treasury teams faced, including: What constituted a credible transition plan? What benchmarks did investors use when assessing these plans? How could companies effectively link their financing and lending strategies to their transition goals? – watch here.

Arthur Krebbers, Head of Corporate Climate & ESG Capital Markets joins Vishal Saxena, Vice President – Climate and ESG Capital Markets, and Shubha Samalia, ESG Macro Strategist, for a closer look at the direction of travel of ESG and climate policy. They discuss how businesses should factor this shifting landscape into their sustainability strategies and take stock of some of the new ESG innovations making waves in global markets – listen here

NatWest recently participated in and sponsored the ACT’s 2024 ESG conference, which took place last month. This event served as a significant platform for discussing various aspects of ESG integration, particularly focusing on the role of treasury within supply chains – read more.

COP29 established a new finance goal to increase support for developing countries, aiming for $300bn annually by 2035 and a total of $1.3tn per year from private and public sources.

A key agreement on carbon markets was reached, allowing for effective country-to-country trading under the Paris Agreement to aid in reducing global emissions. (See below under Carbon Markets section for more details).

Important advancements in transparent climate reporting and adaptation planning were made, with a focus on supporting the least developed countries and recognising indigenous contributions.

Gender equality and civil society participation were emphasised, highlighting the importance of inclusivity and diverse stakeholder involvement in climate action - read more.

The EU Council has adopted a new regulation to ban products made with forced labour from being sold or exported in the EU, following an agreement with the European Parliament.

It includes measures for identifying sectors vulnerable to forced labour and maintaining a database on associated risks.

The legislation also empowers customs and national authorities to halt the entry of such products and provides for their removal with penalties for non-compliance.

Guidelines issued under the regulation may help inform how companies approach compliance with the CS3D  and vice versa. 

The regulation will be enforced three years after it is published in the EU’s official journal - read more. 

The IAASB has launched the finalised International Standard on Sustainability Assurance 5000 (ISSA 5000) to assist practitioners with sustainability assurance engagements amid rising regulatory demands, particularly from the EU's CSRD³ .

The new standard accommodates both limited and reasonable assurance engagements and applies to both traditional and double materiality concepts. 

Surveys by KPMG and EY found that most corporate companies are feeling increased pressure from stakeholders to provide ESG assurance and there’s a belief that third party assurance builds confidence in sustainability reporting credibility and accuracy.

The standard has received backing from key entities, including the IOSCO⁴ , highlighting its global usability across various reporting frameworks - read more.

The EU has adopted a regulation requiring ESG rating providers operating within the EU to obtain authorisation and supervision from the ESMA⁵ , with the aim of improving the comparability and reliability of ESG ratings.

The new rules mandate that ESG rating providers disclose their methodologies and information sources, aiming to improve the reliability and comparability of ESG ratings for investors.

ESG ratings provider based outside the EU must secure endorsement from an EU-authorised provider, achieve recognition based on specific criteria, or be included in the EU registry following an equivalence decision to operate within the EU – read more.

CDP and EFRAG have announced a partnership aimed at improving efficiency in the environmental data ecosystem, confirming extensive interoperability between CDP's questionnaire and the ESRS⁶ climate standard (ESRS E1).

Joint mapping efforts indicate a high degree of commonality between CDP's disclosures and ESRS E1 requirements, facilitating easier compliance for companies reporting under both systems. A comprehensive mapping guide is expected to be published in early 2025.

The collaboration aims to reduce the reporting burden for companies globally, assisting them in preparing for compliance with the CSRD.

For issuers, this partnership means streamlined reporting processes, as they can leverage the commonalities between CDP and ESRS to minimise redundancy in their disclosures, ultimately easing compliance with evolving regulatory requirements while enhancing transparency and accountability in their environmental impacts – read more.

NatWest has released its 2025 investor year ahead survey results, highlighting investor perspectives on ESG for the upcoming year. The key takeaways include:

• This year’s evolving macroeconomic backdrop has not impacted broader appetite for sustainable investing for most accounts (73%).
• MSCI remains the dominant ESG data provider (60%) with Bloomberg (44%) second, followed by a long tail of other providers. Such data is mostly used for exclusions (56%) and scoring (48%).
• Shift to nature: 84% of respondents want to allocate more capital to biodiversity projects next year. Climate change adaptation is relevant but only for where investors deem investments to have material physical climate risks.
• Regulatory challenges remain top of mind for investors especially fund labelling (76%) – read more.

*Based on responses from 38 participants

For analysis and information on the Primary Market, along with updates on the Secondary Market, please take a look at the full monthly newsletter on Market Insights. If you do not have access to Agile Markets, please contact us here.

The COP29 presidency announced a major milestone in climate diplomacy by unlocking international carbon markets after years of complex negotiations.

This enables the implementation of trusted carbon markets, reducing the cost of implementing NDCs  by up to $250bn annually.

With article 6 now operational, parties can use savings from reduced implementation costs to invest in greater climate ambition. This comes just in time for the next generation of NDCs due in February 2025 described as “make or break” for achieving global climate targets.

COP29 resolved a decade long stalemate on carbon market integrity, finalising the last component of the Paris agreement – read more.

Fund manager Danske Invest has changed the framework for the Global Corporate Sustainable Bond fund so that it can only invest in corporate green bonds issued to finance projects that support one or more of UN’s sustainable development goals.

Up until now, 60% of the fund was invested in both green and social bonds. The remaining share was invested in traditional corporate bonds, where the bond issuer was assessed to meet Danske Bank’s criteria for sustainable investments.

While Danske Bank asset management sets the framework for the fund, it is Goldman Sachs asset management that has the investment responsibility and decides which bonds the fund should invest in within the set framework. Both asset managers monitor the allocation of financing from green bonds are being directed to goals that the bonds were issued to finance - read more.

The PRI  has launched the spring nature engagement initiative, which includes a company assessment framework to monitor corporate progress in reducing biodiversity loss and environmental impact, utilising existing market indicators.

The framework incorporates indicators from the World Benchmarking Alliance to evaluate business operations, risk management, and supply chain practices, alongside metrics adapted from the Global Standard on Responsible Climate Lobbying to assess corporate political engagement.

Spring will conduct annual assessments of 60 focus companies based on credible third-party evaluations, with initial baseline assessments expected in 2025, and aims to tailor engagement strategies based on these findings – read more.

BNP Paribas asset management has launched the BNP Paribas Future Forest Fund, designed to support certified timber production while advancing biodiversity and climate resilience goals. This SFDR  Article 9 fund was created in partnership with the IWC  and aims to target sustainable timberland investments across the U.S., Australia, New Zealand, and Europe. The fund is set to raise up to $500m, with a first closing of $130m achieved in November 2024.

The portfolio will feature 8-12 assets, selecting only forests certified or certifiable by Forest Stewardship Council. The fund has a target of $500m, raising $130m during its first closing in November.

The introduction of the fund comes as global demand for timber continues to grow with the UNI Food and Agriculture Organisation data predicting a 37%-60% increase between 2020 and 2050 – read more.

Giving Tuesday 2024 which took place on the 3^rd of December 2024 is a global day of doing good which encourages people to celebrate charitable causes, generosity and giving. Take a look at some highlights of how our colleagues and customers have supported causes they care about so far in 2024 – read more.

Regular articles from us on market-moving themes, and updates on what we are doing to further our ESG commitment. 

• What’s next for the social debt market? | NatWest Corporates and Institutions
• Overcoming four barriers to social bond market growth | NatWest Corporates and Institutions
• Structuring the inaugural green NAV line for Clarion Partners | NatWest Corporates and Institutions

For the full monthly newsletter login to Market Insights. Don’t have access? Contact us here.

Or, for Corporates looking to discuss any of the above further, please reach out to our authors:

• Dr Arthur Krebbers, Head of Corporate Climate & ESG Capital Markets
• Gustavo Brianza, Head of Debt and ESG Advisory
• Rui Zu, ESG Advisory
• Thomas Gidman, ESG Advisory
• Daniel Bressler, Climate & ESG Capital Markets
• Helen Ferguson, ESG Advisory
• Niceasia Mc Perry, Climate & ESG Capital Markets
• Isabella Crack, ESG Advisory

1. CS3D¹- Corporate Sustainability Due Diligence Directive
2. IAASB² - The International Auditing and Assurance Standards Board
3. CSRD³ - Corporate Sustainability Reporting Directive
4. IOSCO⁴ - European Commission and International Organisation of Securities Commissions
5. ESMA⁵ - European Securities and Markets Authority
6. ESRS⁶ - European Sustainability Reporting Standards
7. CSRD⁷ - Corporate Sustainability Reporting Directive
8. NDCs⁸ - Nationally Determine Contributions
9. PRI⁹ - Principles for Responsible Investment
10. SFDR¹⁰ - Sustainable Finance Disclosure Regulation
11. IWC¹¹ - International Woodland Company