Second annual flagship UK Sustainable Finance Day in London

NatWest is holding its second annual flagship Sustainable Finance Day on 6 March 2025 at The May Fair Hotel, London, on the “Decarbonisation of the UK’s Real Economy”, focusing on core industries, such as power and heating, alongside enablers, such as finance and governments. The event features a joint keynote address from Lord Nicholas Stern and Chris Stark on the macro drivers impacting global climate progress and the UK’s Clean Power 2030 Strategy and its impact on the decarbonisation of the UK’s real economy, followed by a variety of panel discussions with leading experts from industry, finance and the public sector, including Worcester Bosch, NESO and TFMR.

Register for Decarbonisation of the UK's Real Economy event

New EU rules to improve gender balance in corporate boards enters into application

The EU’s Gender Balance on Corporate Boards Directive, effective from December 2024, mandates that listed companies achieve gender balance by June 2026.

Specifically, these companies must ensure that 40% of non-executive director positions and 33% of all director roles are held by individuals of the underrepresented sex.

This initiative aims to enhance gender diversity and equality within corporate leadership across EU member states

Read the article: New EU rules to improve Gender Balance in corporate boards enter into application.
 

EU expected to release simplified sustainability reporting law in February 2025

In February 2025, the EU plans to introduce the Omnibus Simplification Package, consolidating the Corporate Sustainability Reporting Directive (CSRD)1, the EU Taxonomy Regulation, and the Corporate Sustainability Due Diligence Directive (CSDDD)2 into a single framework.

This initiative aims to reduce the regulatory burden on businesses while maintaining the EU’s climate objectives.

However, there are concerns that this streamlining could dilute the effectiveness of existing sustainability regulations.

Read the article: EU Expected To Release Simplified Sustainability Reporting Law In February 2025
 

EFRAG launches Voluntary Sustainability Reporting Standard for non-listed SMEs

The European Financial Reporting Advisory Group (EFRAG)3 has introduced the Voluntary Sustainability Reporting Standard (VSME)4 for non-listed small and medium-sized enterprises (SMEs)5.

This standard aims to streamline sustainability reporting by providing a unified framework, thereby reducing the burden of multiple, uncoordinated ESG data requests from various stakeholders.

Aligned with the European Commission’s SME Relief Package, the VSME is expected to enhance SMEs’ access to sustainable financing opportunities.

EFRAG plans to support the adoption of VSME by offering digital tools, educational materials, and outreach initiatives in 2025.

Read the article: EFRAG Launches Voluntary Sustainability Reporting Standard for Non-Listed SMEs

SBTi updates plans for three sectoral standards – oil and gas, chemicals, and power

The Science Based Targets initiative (SBTi)6 is revising standards for oil and gas, chemicals, and power to create practical decarbonisation pathways.

Upcoming public consultations will invite stakeholder input on the Oil and Gas Standard and final Chemicals Criteria, with significant milestones set for early 2025 and Q3 2025, respectively.

Aside from these sector projects, SBTi is also developing a Financial Institutions Net-Zero Standard, sector standards for automotive and apparel and updating its Corporate Net-Zero Standard to enable a smooth target-setting process for businesses.

Read the article: SBTi updates plans for three sectoral standards - oil and gas, chemicals and power.
 

Latest TPI Management Quality data are available, doubling the coverage to 2,000 companies in 24 sectors

The Transition Pathway Initiative (TPI)7 centre has expanded its assessments under the Management Quality (MQ)8 Framework, increasing the TPI universe to 2,000 companies across 24 sectors.

Over half of the companies (55%) now score at MQ level 3, signifying integration of climate considerations into their operational decision-making, while less than 10% meet any level 5 indicators focusing on detailed transition plans.

Based on this year’s assessments, no company scored an all level 5 indicators, with no more than 10% of companies from the TPI universe scoring on any level 5 indicator, highlighting the shortage of disclosure on the alignment of company capex plans and their climate ambitions, as well as on the quantification of transition plans.

Read the article: Latest TPI Management Quality Data are Available, Doubling the Coverage to 2,000 companies in 24 Sector
 

UK Advisory Committee calls for adoption of IFRS Sustainability Reporting Standards

The UK Sustainability Disclosure Technical Advisory Committee (TAC)9 has endorsed the IFRS Foundation’s International Sustainability Standards Board (ISSB)10 sustainability reporting standards (IFRS S1 and S2) for companies in the UK.

The TAC recommends extending the “climate-first” relief period for companies to disclose sustainability-related risks from one year to two years, following a comprehensive review of the standards.

This endorsement aligns with the UK government’s Green Finance Strategy, signalling a commitment to enhancing sustainability reporting and positioning the UK as a leader in this area. 

Read the article: UK Advisory Committee Calls for Adoption of IFRS Sustainability Reporting Standards.

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.

Predicted resurgence in carbon credits

Carbon credits recover with a quality shift as buyers favour high-value climate projects. Carbon credit retirements grew by 0.2% in 2024, marking the first positive movement in the market since 2021. Sylvera’s State of Carbon Credits Report 2024 shows that retirements totalled 176m, with a notable 25% rise in higher-quality credits rated BB and above, signalling increased willingness to invest in superior projects.

A report published by MSCI at the beginning of 2025 indicates that the carbon market might see substantial growth within the next few years.

BlackRock launches fund with SDR label

BlackRock launched the BFM Brown to Green Materials Fund under the UK’s Sustainable Disclosure Requirements (SDR)11 regime, focusing on sectors vital for the low-carbon transition (e.g. metals, mining and cement).

The fund adopts the ‘Sustainability Improvers’ label, targeting investments in companies with potential to enhance environmental sustainability, with at least 70% of assets meeting this criterion.

It builds on a similar fund for European investors, the BGF Brown to Green Materials Fund, which has grown to $78m since June 2023.

Managed by BlackRock’s Thematics and Sectors team, the fund targets high-emitting companies with credible decarbonisation plans, offering potential investment opportunities.

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

• 2024 lookback: COPs making gradual progress on climate and biodiversity action
• What’s next for the social debt market?
• EU Council adopts new regulation to oversee ESG rating providers

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
• Caroline Haas, Global Head of Climate & ESG Capital
• 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. CSRD [1] Corporate Sustainability Reporting Directive
2. CSDDD [2] Corporate Sustainability Due Diligence Directive
3. EFRAG [3] European Financial Reporting Advisory Group
4. VSME [4] Voluntary Sustainability Reporting Standard
5. SMEs [5] Small and medium-sized enterprises
6. SBTi [6] Science Based Targets Initiative
7. TPI [7] Transition Pathway Initiative
8. MQ [8] Management Quality
9. TAC [9] Technical Advisory Committee
10. ISSB [10] International Sustainability Standards Board
11. SDR [11] Sustainable Disclosure Requirements