ESG+ Newsletter – 11 December 2025

Climate & nature reporting holds firm as DEI-linked language slips in US filings

As reported by Sustainable Views, the Institute for Sustainable Finance issued a survey last week assessing the use of sustainability-related language in US corporate filings in 2024 vs 2025. The study found that the use of DEI-related words reduced by 25% in 2025, likely due to political and legal changes following President Trump’s re-election. Despite a drop off in the use of DEI-linked words, the use of keywords associated with nature and climate remained “largely stable” between 2024 and 2025. The report claims that this may be reflective of investor expectations, environmental regulation and the materiality of climate risk. The findings of the report indicate that some ESG topics may be viewed by companies as optional when political views change, whereas others may be less responsive to changing sentiment. The difference between the use of DEI- and climate-related language in US filings also indicates considerations beyond policy and politics, highlighting the influence of established capital market practices and reputational considerations.  

Investor pressure on AI governance rises while mandatory disclosure still lags

Investor scrutiny of corporate AI practices is accelerating, even as U.S. regulators hold back on imposing new disclosure mandates. According to Responsible Investor, Connecticut’s state pension funds are preparing to engage dozens of companies on ensuring a “just AI transition,” pressing boards to address workforce impacts, bias risks, and governance gaps tied to rapid AI deployment. The initiative reflects a growing push from institutional investors to link AI strategy with long-term social and financial stability. At the same time, federal policymakers are signalling hesitation. As Bloomberg Law reports, SEC Chair Mark Uyeda Atkins has rejected calls for mandatory AI-related reporting, arguing that existing disclosure rules already capture material risks. The stance leaves companies to navigate rising investor expectations without a standardised framework, widening the gap between market pressure and regulatory requirements.   

Glass Lewis issues final update to its benchmark voting policy 

A few weeks after ISS, leading proxy advisor Glass Lewis published its benchmark proxy voting policy for 2026. This represents the final update to this policy as Glass Lewis recently announced that in 2027 it will shift from a single “house view” to four voting perspectives, ranging from management-aligned to sustainability-focused – a key development recently analysed by FTI Consulting’s governance team.  

As reported by GovernanceIntelligence, the most substantial changes to Glass Lewis’ benchmark voting policy concern US companies and focus on governance rights, shareholder proposals and pay-for-performance assessments. Notably, the policy highlights that amendments limiting the ability to submit shareholder proposals, or maintain majority voting may prompt recommendations against the governance committee chair or, in some cases, the entire committee.   

Another significant change is the shift to a scorecard-based pay-for-performance model, intended to provide a more nuanced assessment of the alignment between executive remuneration and company performance. The scope of this model has also been broadened to cover companies listed on major Continental European and UK exchanges. These developments, and more, were explored at FTI Consulting’s annual Governance & Activism event held in Dublin at the end of last month. Key takeaways from the discussions are now available on our website.

Deal agreed on EU sustainability reporting obligations

More than 80% of European companies will have sustainability reporting obligations significantly reduced following a deal reached in the EU on Monday, Politico reports. The coalition of the centre-right European People’s Party (EPP) and the far right within the EU proved pivotal in finalising the deal. This concludes a nearly yearlong debate on sustainability reporting in the EU, resulting in a move that will seek to cut “administrative red tape” for European companies. The main outcome of the deal is that the scope of both CSRD and CSDDD has drastically narrowed. CSRD reporting now applies only to companies with at least 1000 employees and 450m euro in net turnover, while CSDDD applies only to companies with at least 5000 employees and 1.5b euro in net turnover. Transition plans have also been removed from CSDDD, which further reduces what in-scope companies must prepare. 

ICYMI

• The green economy reached $5 trillion in 2024 and is on track to hit $7 trillion in 2030, making it one of the world’s fastest growing markets despite recent geopolitical pressure, ESG Dive reports.
• ESG Today highlights findings from LinkedIn’s Green Skills Report 2025, which indicates that workers with green skills are being hired far faster than the wider job market, as demand continues to outpace supply.