ESG+ Newsletter – 12 February 2026

EU sets world’s first voluntary standard for permanent carbon removals

The European Commission has adopted the first set of methodologies under the Carbon Removals and Carbon Farming Regulation, creating the world’s first voluntary standard for certifying permanent carbon removals, Eureporter reports. The framework establishes clear guidelines for three distinct activities that permanently remove CO2 from the atmosphere:   

• Direct air capture with storage  
• The capture and storage of biogenic emissions  
• Biochar carbon removal  

Projects using these methods can now apply for EU certification, with the first approvals expected in the coming months. The aim is to provide clarity for companies and investors, reduce greenwashing risks, stimulate investment in carbon removal technologies, and support the EU’s goal of reaching climate neutrality by 2050. The regulation will now be reviewed by the European Parliament and the Council before formally entering into force, potentially setting the stage for a new age of reputable, validated carbon removal efforts.  

AI opportunities and risks for sustainable investors  

Investment manager Nuveen has released a guide for sustainable investors on navigating AI’s opportunities and ESG risks, as reported by  ESGDive. Beyond traditional areas such as power and data centres, the report highlights AI investment opportunities in biodiversity solutions, including ecosystem regeneration, water conservation and sustainable landscaping, as well as smart technologies that improve efficiency in energy, water and cooling for data centres. Sustainable investors should also consider social impacts, including data privacy and trust, energy affordability and labour markets. Companies’ strategies for developing and retaining a workforce that can leverage AI, while remaining adaptable to reskill in areas less suited to automation, are particularly important. Governance factors also matter, including regulatory compliance and geopolitical risks such as national security concerns and technology supply chain vulnerabilities. Given its wide-ranging economic, environmental, social and governance implications, AI is expected to remain a key theme in investor-company engagement throughout 2026.  

MSCI states that 38% of emissions trajectories aligned with global climate goals 

A newly released report from MSCI, the most recent version of their Transition Finance Tracker, found that just 38% of global listed companies’ emissions trajectories are aligned with global climate goals. According to an article from ESG Today covering the report’s release, only 12% of companies’ emissions trajectories align with limiting global warming to 1.5°C or less, and only 38% of companies’ trajectories align with limiting global warming to 2°C or less. In general, developed economies have the lowest temperature increase trajectories, with Italy, Germany, France, and Japan all projecting increases of less than 2.5°C. Developing economies tend to have more significant temperature increase trajectories, with Saudi Arabia, Indonesia, India, and China all projecting increases greater than 4°C. While the misalignment between corporate emissions trajectories and global climate goals is worrisome, the MSCI report indicated “a significant increase in ambition within companies’ climate goals.” In 2025, 19% of companies had a Science Based Targets initiative (SBTi)-approved emissions reduction target, up from 14% in 2024, signaling increased corporate efforts to reduce emissions and stem temperature rises.  

UK IA argues for outcome focused stewardship landscape 

As reported by Financial News London, the UK Investment Association has called for a realignment of the UK stewardship landscape, highlighting concerns that the current framework burdens investors and may weaken the UK’s market competitiveness. The IA argues that excessive reporting demands and an overemphasis on voting metrics present risks if diverting resources from value-creating engagement. By shifting stewardship toward outcome-focused practices, embedding clearer mandates, and increasing transparency on investment tradeoffs, the IA aims to improve long-term value creation. As the proxy voting and stewardship world undergoes significant changes, the IA is the latest to point to potential changes that could enhance the attractiveness of public listings. In response, companies should be prepared for more focused engagement from asset managers, as well as providing proof points in reporting on how engagement with investors has been incorporated into Board deliberations and governance-related decisions.  

Turkish ISSB reporting shows continued use of double materiality

A recently released joint study by the University of Oxford and the London School of Economics suggests that firms required to report under the International Sustainability Standards Board (ISSB) may continue to apply a double materiality lens in their disclosures, Responsible Investor reports. The study assessed the disclosures of 319 Turkish companies, all of which are mandated to report in line with ISSB standards from 2024, making Turkey the first jurisdiction to enforce the disclosure.

The study found that 24% of BIST 100 issuers applied a double materiality methodology, with 18% of the broader sample adopting the same approach. These findings likely reflect the voluntary basis on which firms have reported sustainability disclosures in previous years, such as under the GRI framework. Additionally, 73% of Turkish issuers disclosed a transition plan.

ICYMI

• The Science Based Targets initiative (SBTi) has launched an updated draft of its Automotive Sector Net-Zero Standard for a second public consultation, as it strives to finalise the standard by Q3 2026, Edie reports.