ESG+ Newsletter – 09 October 2025

Reasons for optimism in corporate climate action 

In the Financial Times, Florian Berg, Principal Research Scientist and Lecturer at MIT Sloan, argues that despite recent setbacks, there are reasons to remain hopeful about corporate efforts to tackle climate change.  Recent challenges include banks leaving the Net Zero Banking Alliance (NZBA) (more below) and the lowering of decarbonisation targets, while the Net Zero Asset Managers (NZAM) alliance has suspended operations. In the US, these moves have been driven by political pressure, which has threatened antitrust lawsuits against financial institutions participating in green alliances. Globally, concerns have also been raised about the impact of climate commitments on economic outputs and competitiveness.  

Yet progress made over the past decade is unlikely to be undone. As set out in the Financial Times, the Carbon Disclosure Project has found that the number of companies reporting on climate change increased from 4,968 companies in 2014 to over 22,400 in 2024; and companies are likely to remain reluctant to disclose rising carbon footprints year on year. Another major milestone has been the publication of reporting standards by the International Sustainability Standards Board (ISSB). So far, 37 jurisdictions have adopted or plan to adopt them. Although the US Securities and Exchange Commission dropped plans for mandatory climate-risk disclosures, 47 per cent of public firms in the US still referenced climate change in their 2024 annual filings. Meanwhile, asset managers increasingly integrate ESG data, as demonstrated by ESG provider revenues, which have grown from $245 million in 2016 to $1.56 billion in 2024 according to Opimas.   

While some firms may retreat, corporate climate reporting and ESG integration by investors have created momentum that will be hard to reverse. With a number of companies and investors becoming less vocal about their climate efforts or preferring to use broader terms such as “resilience” (as discussed in the Wall Street Journal earlier this year), the actual level of  efforts to take action climate-related activity may be even greater than what public disclosures or studies currently indicate, a term becoming known as Greenhushing. 

Greenhushing response to climate sceptics

Once associated with avoiding claims of greenwashing or environmental non-compliance, Greenhushing is now coming about on the back of potential backlash from climate-sceptical politicians and consumer. Greenhushing refers to companies quietly getting on with decarbonisation efforts without vocally disclosing extensive details about it. Semantics have changed, with companies seeing significant risk in carbon reduction efforts. Bloomberg explores implications for carbon capture and storage companies in the US, increasingly facing pressure from climate sceptics on the right and nature/environmental justice champions on the left. Bloomberg suggests the “best way forward is to explain to people what’s in it for them” beyond preventing uncontrolled climate change, but adding the potential upside in terms of economic progress and job security. As turbulence in the ESG and sustainability space continues, managing risks around disclosures remains high – balancing the need to show effective risk management on climate while avoiding blowback from those all too willing to critique companies perceived to be overly vocal on efforts to pursue decarbonisation efforts over the short, medium and long-term.  

Net-Zero Banking Alliance ceases operations

The Net-Zero Banking Alliance (NZBA), the UN-backed banking sector coalition dedicated to advancing global net zero goals, has announced it will cease operations. ESG Today reports that following a vote of its members, the organisation will transition from a member-based alliance and instead, published guidance for climate target setting for banks as a framework. The NZBA had experienced rapid expansion following its founding in 2021, growing from 43 banks to over 140 by 2024; however, since then, growing pressure, particularly from US politicians, led to a considerable number of departures throughout 2025. While on the face of it, the latest announcement by the NZBA may appear to be a significant blow to collective climate action, it could also be viewed as an evolution and recalibration of banking efforts to address the risks related to climate change. Responsible banks will still be expected by their stakeholders to improve their climate risk management and drive positive economic and social impact while demonstrating progress through detailed disclosure. 

Government shutdown latest challenge for US clean energy 

With the federal government shutdown now surpassing one week, guidance and permitting for clean energy projects could be delayed, according to ESG Dive. Clean energy developers are awaiting the IRS’s regulatory guidance on foreign entities of concern (FEOC) provisions, which is expected to come in the following weeks, but will likely be delayed especially if the shutdown reaches the two-week mark. The Internal Revenue Service’s (IRS) functions typically continue normally if the shutdown is less than two weeks, but other agencies may be impacted at a more rapid pace. In addition to the FEOC delay, the Departments of Treasury, Interior, and Energy’s day-to-day operations are at-risk as they are likely to begin halting operations, following their actions during the last 2018-2019 government shutdown. For example, the Environmental Protection Agency (EPA) will stall all new grants, permits, and interagency actions during the shutdown. The Bureau of Land Management (BLM) will cease permitting for oil, gas, transmission infrastructure in addition to pausing new leasing for energy and minerals. It is difficult to predict the end of the shutdown, but as it lengthens, agencies’ energy tasks and guidance could be further impacted.  

EU plans further review of sustainable finance framework 

Responsible Investor reports that the EU Commission has announced delays and warned of further revisions to a series of sustainable finance regulations. These recent changes are separate from the executive’s sustainability Omnibus released earlier this year.  

The new delays, dubbed the “kill list” by EU observers, focus on two legal texts that set out technical and implementation details to the core rules of level 1 EU acts, with the goal of further reducing administrative red tape. The proposed changes would impact the EU’s Sustainable Finance Disclosure (SFDR), the ESG ratings Regulation, EU Green Bond Standards, sustainability requirements under Solvency II, and most notably the European Sustainability Reporting Standards (ESRS).    

ICYMI 

• Despite the consistent focus on ESG and sustainability from across the political spectrum, RTE.IE reports on renewable energy generation overtaking coal as an energy source for the first time, potentially heralding a “crucial turning point” in the shift towards cleaner power.  
• According to Sustainability Online, US logistics firms are reducing their focus on sustainability, with only 7-11% of firms surveyed identifying it as a primary concern for their business.
• ESG Today covers the latest example of anti-greenwashing regulation, with the Ministry of Trade and Industry’s Competition and Consumer Commission of Singapore (CCS) this week issuing guidance for companies in navigating quality-related claims when marketing their products.