ESG+ Newsletter – 13 November 2025

ISSB announces global disclosure requirements for nature   

The IFRS Foundation’s International Sustainability Standards Board (ISSB) has announced plans to develop global disclosure requirements for nature-related risks and opportunities, responding to growing investor demand for greater transparency on biodiversity and ecosystem impacts, ESG Today reports. Building on its existing sustainability (IFRS S1) and climate (IFRS S2) standards launched in 2023, the ISSB will determine over the coming months whether to create a new standalone standard or integrate new guidance into its existing framework. The work will draw heavily on the Taskforce on Nature-related Financial Disclosures (TNFD) framework, whose recommendations – now adopted by more than 730 companies and financial institutions – provide a structured approach for assessing nature-related dependencies and impacts. Following the announcement, the TNFD said it would pause new technical work to support the ISSB’s process. The ISSB aims to release an exposure draft of its proposed nature-related disclosure requirements by late 2026, ahead of the UN Biodiversity COP17.   

Leaked documents signal streamlined SFDR

Responsible Investor reports that a leaked copy of the proposed changes to the SFDR regulation includes scrapping entity-level Principal Adverse Impacts (PAI), cutting the formal definition of a sustainable investment, and introducing three product categories in place of the previously used articles 6, 8, and 9.   

The leaked document noted that the definition of sustainable investment added uncertainty about whether an investment would align with it, resulting in “widespread divergence in practical application“. Investors will welcome the dropping of PAI disclosures, as the changes will allegedly save over 56 million euros a year in administrative burden. Under the new structure, Article 7 will apply to transition funds, Article 8 to funds integrating sustainability factors, and Article 9 to those with a sustainability objective. All will be prohibited from investing in companies expanding fossil fuel capacity, with indicators based on PAIs and aligned with the revised CSRD.  

Europe left carrying the climate burden as major emitters skip COP30  

As reported by Euronews, the leaders of the United States, China, and India, the world’s three largest emitters, will skip this year’s COP30 climate summit in Belém, Brazil, leaving Europe to shoulder much of the global climate agenda. While Beijing and New Delhi are sending lower-level representatives, Washington is sitting out entirely, a move that underscores waning U.S. engagement in international climate diplomacy.  

For the European Union, the absence of these major polluters intensifies pressure to uphold its climate commitments even as domestic priorities shift toward defence spending and economic resilience. European Commission President Ursula von der Leyen reaffirmed the bloc’s pledge to remain the world’s largest provider of climate finance, noting €42.7 billion in 2024 contributions. Still, with developing nations calling for over $1 trillion annually, the funding gap remains vast. Environmental advocates urge the EU to sustain its leadership, warning that credibility in global climate cooperation is at stake. The retreat of the world’s biggest emitters highlights a widening divide in climate responsibility, and signals a future where Europe’s role as the principal financier of global climate action may prove increasingly unsustainable.  

UK sustainability assurance standards released

The UK’s Financial Reporting Council (FRC) has released International Standard on Sustainability Assurance (UK) 5000, a new framework setting out requirements for conducting assurance engagements on sustainability reporting, as covered by ESG Today. The standard mirrors the global benchmark developed by the International Auditing and Assurance Standards Board (IAASB) and is designed for use across various reporting frameworks, including those from the EU, ISSB, GRI, and ISO. Its introduction comes as the UK government considers making sustainability reporting mandatory through the new UK Sustainability Reporting Standards. While adoption of the standards will be voluntary, the FRC states it aims to improve the quality, credibility, and consistency of sustainability information. 

Despite the back and forth over the merits of sustainability – and associated reporting – the new standard continue to place an emphasis on rigorous and credible sustainability reporting in the UK, aligning with international assurance practices. By ensuring sustainability data meets consistent and trusted verification standards, businesses can support better investment decisions, and competitively position themselves as the UK seeks to promote itself as a sustainable investment hub. 

IA sets 2026 pay priorities and launches new consultation initiatives

On 12 November 2025, the Investment Association (IA) issued its annual letter to remuneration committee chairs, outlining key expectations for the 2026 AGM season and announcing new initiatives to strengthen the shareholder consultation process. 

Following last year’s significant revision and simplification of its Principles of Remuneration, no further changes will be made for 2026. The IA’s guidance instead focuses on improving implementation and disclosure. Remuneration committees are urged to provide company-specific justifications for material changes in pay, rather than generic explanations. Any benchmarking exercise should be clearly detailed, including peer selection and explanations for differences in size, complexity, performance and the types of pay schemes used by peers. The letter clarifies that hybrid pay schemes should generally be reserved for businesses with substantial US exposure or those competing globally for talent. 

For 2026, IA members emphasise the need to demonstrate a clear link between pay and performance, in line with lessons from the 2025 AGM season documented in a previous FTI report. With inflation and economic uncertainty still affecting households, investors expect companies to explain how they balance executive reward with outcomes for employees, customers, and other stakeholders. Non-executive director (NED) pay should reflect time commitment, role complexity, and experience. In line with updated FRC guidance, the IA supports a portion of NED fees being paid in shares, while reiterating that performance-related pay remains inappropriate for independent NEDs. 

In a notable development, the IA announced two initiatives to enhance shareholder consultation: a directory of IA member contacts to facilitate engagement, and the re-establishment of collective meetings, allowing companies to consult a broader group of investors. Further details on both measures will be published shortly.