Policy Digest: November 2025
This month’s regulatory developments reflect a dynamic intersection of climate diplomacy and regulatory simplification.
COP30 in Brazil highlighted global efforts to coordinate financial and central bank action on climate risk, while the EU continues its push to streamline ESG reporting through the Omnibus I reforms and the SFDR simplification package.
For banks, this could mean less granular ESG and sustainability data to work with, potentially complicating risk assessment, stress-testing, and strategic planning for climate-related exposures.
At the same time, initiatives like the EBA’s Environmental Scenario Analysis Guidelines and HKMA climate risk guidance reinforce the need for forward-looking risk integration and scenario analysis.
Across regions, evolving ESG reporting standards, taxonomies, and rating frameworks are reshaping supervisory expectations and investor requirements.
INTERNATIONAL
ICMA publishes Climate Transition Bond Guidelines
The Climate Transition Bond Guidelines (CTBG), released in November 2025 by the International Capital Market Association, provide issuance-level guidance to complement the entity-level recommendations of the Climate Transition Finance Handbook (CTFH).
They introduce a dedicated Climate Transition Bond (CTB) label to support financing and refinancing of projects critical to achieving the Paris Agreement, particularly for high-emitting issuers or sectors.
Key elements of the CTBG include:
- Guidance for identifying and financing credible climate transition projects, including definitions, safeguards, and an initial (non-exhaustive) list of eligible project categories.
- Recommendations for structuring climate-transition-themed sustainability-linked bonds (SLBs) issued by high-emission entities.
- Illustrative annexes that direct issuers to relevant taxonomies, official and market guidance, decarbonization pathways, transition roadmaps, and resources to prevent carbon lock-in.
EIB Launches Green Checker Tool for Sustainable Banking Projects
The European Investment Bank (EIB) has launched its Green Checker tool, extending its use beyond the EU to help banks and businesses identify projects eligible for green and sustainable financing.
The free, publicly accessible tool assesses project eligibility, estimates climate impact, and provides downloadable results including energy savings, emissions reductions, and alignment with the EU Taxonomy and EIB climate standards.
Originally created for financial intermediaries, the toolis now also aimed at SMEs and other businesses seeking to evaluate their projects and access green finance.
Announced at COP30 in Belém, Brazil, the expanded platform is available across regions, with simplified data requirements tailored to local markets.
The Green Checker supports the EIB’s broader push to scale sustainable finance under the EUGlobal Gateway, which targets up to €300 billion in investment between 2021 and 2027. Read more.
Central Banks and Finance Ministers Unite to Tackle Climate Risk
A new joint initiative has been launched at COP30 in Brazil to strengthen cooperation between central banks and finance ministries on managing the economic risks of climate change and accelerating the energy transition.
The platform unites the Network for Greening the Financial System (NGFS),representing 143 central banks, and the Coalition of Finance Ministers for Climate Action (CFMCA), comprising over 90 countries.
The initiative aims to deepen dialogue on how climate change affects the macroeconomy – shaping investment, debt planning, and financial stability – and to promote an orderly, economically sound transition.
It will support the development of shared tools, scenarios,and financing strategies, and will hold a series of climate-focused macroeconomic dialogues and high-level meetings in 2026.
Leaders emphasized the importance of coordinated action to strengthen analytical foundations and reinforce sustainable, resilient growth,even as the NGFS continues its work without the U.S. Federal Reserve. Read more.
EUROPE
European Banking Authority releases Final Guidelines on Environmental Scenario Analysis
The European Banking Authority (EBA) has published final Guidelines on environmental scenario analysis, complementing its ESG risk management guidance.
The Guidelines set out supervisory expectations for how banks should conductforward-looking environmental risk assessments, aiming to strengthen institutions’ ability to integrate such risks into decision-making.
The Guidelines are structured around two pillars
- Integration into stress-testing frameworks to assess short-term financial impacts and ensure adequate capital and liquidity.
- Resilience analysis to evaluate medium- to long-term implications for business models, strategies, and risk profiles.
These measures help banks embed environmental risk considerations into overall risk management and strategic planning, providing a consistent EU-wide reference.
The Guidelines will apply from 1 January 2027 and are grounded in the Capital Requirements Directive (CRD6) and Regulation (CRR3), forming part of the EBA’s sustainable finance roadmap. Read more.
SFDR 2.0: Amending Regulation Leaked
The European Commission’s leaked draft SFDR simplification package proposes majorre forms to sustainable finance rules, including a full overhaul of product categories, the removal of entity-level PAI reporting, and scrapping the current definition of “sustainable investment.”
Key changes include three new fund categories, replacing the current Article 8 and 9 ‘light’ and ‘dark’ green funds:
- Article 7– Transition: Funds investing ≥70% in assets with credible, measurablet ransition goals (e.g., SBTi-aligned or taxonomy-eligible).
- Article 8– Integration: Investments that integrate ESG factors and either outperform peers on sustainability indicators or show a strong, proven track record.
- Article 9 – SustainabilityObjective: ≥70% invested in“sustainable economic activities” (e.g., taxonomy-aligned assets, Paris-alignedbenchmarks, EU green bonds), with prohibitions on financing fossil-fuelexpansion.
Product-level PAI reporting would be streamlined to a smaller, more decision-useful set to improve investor clarity. Notably, the draft introduces an opt-out for products marketed solely to professional investors.
The proposal may still change before the expected November 19 release, and needs to undergo the full EU legislative process. Read more.
ESMA Sets Final ESG Ratings Standards to Boost EU Market Transparency
ESMA has finalized its Regulatory Technical Standards (RTS) for the EU's ESG Ratings Regulation (EU 2024/3005), which will apply from 2 July 2026.
The standards are designed to enhance the integrity, transparency and independence of ESG rating activities in the EU.
They introduce simplified authorization and recognition processes by reducing disclosure requirements, merging the relevant RTS, narrowing the scope of ownership information, streamlining employee disclosures and limiting integrity checks for senior management to a defined set of financial crimes.
The rules on separation of activities retain the requirement for physical separation of staff, but adopt a more flexible, principles-based approach.
The disclosure framework requires providers to explain their methodologies, assumptions, risk and impact coverage, and how they apply double materiality.
ESMA will submit the final RTS to the European Commission in October 2025 for adoption, followed by scrutiny from the European Parliament and Council ahead of full implementation in 2026. Read more
Omnibus Vote Narrows Scope of Sustainability Reporting in the European Union
On 13 November 2025, the European Parliament approved a negotiating mandate on the European Commission's "Omnibus I" proposal, which seeks to amend the CSRD and CSDDD.
The mandate, backed by a coalition of right and far-right groups, reduces the scope of the directives compared to the Commission's proposal and removes the obligation for climate transition plans under CSDDD.
The vote highlights ongoing tensions in the European Parliament between efforts to streamline regulation and maintaining ambitious sustainability standards.
The Legal Affairs (JURI) committee will now enter trilogue negotiations with EU governments, aiming to finalize the legislation by the end of 2025. Read more
EFRAG to launch Draft Simplified European Sustainability Reporting Standards (ESRS) on 4 December 2025
EFRAG is set to unveil its Draft Simplified European Sustainability Reporting Standards (ESRS) at its upcoming conference on 4 December 2025, marking a significant step toward making sustainability reporting more accessible and proportionate for European companies.
The event will bring together leading figures from EFRAG, the European Commission, and the wider sustainability reporting community to discuss the technical foundations of the new draft standards and their implications for businesses across Europe.
The program includes presentations from EFRAG's expert teams, the launch of the ESRS Knowledge Hub, and keynote speeches by European Commissioner for Financial Stability, Maria Luís Albuquerque, and Patrick de Cambourg, Chair of the EFRAG Sustainability Reporting Board. Read more
UNITED KINGDOM
UK finalizes ESG Ratings Legislation
The UK Government has finalized legislation to bring ESG ratings providers under regulatory oversight, appointing the Financial Conduct Authority (FCA) as the supervisory and authorizing body.
The new regime adopts a principles-based approach aligned with IOSCO's 2021 recommendations, emphasizing transparency, due diligence, conflict-of-interest prevention, governance, and internal controls.
Both domestic and foreign ESG ratings providers operating in the UK must obtain FCA authorization from 2028.
The FCA is currently developing regulatory requirements and guidance, expected by year-end.
Notably, the UK framework distinguishes between the issuance and use of ESG ratings for investment purposes, requiring FCA authorization only when a rating is likely to influence an investment decision on a specified investment. Read more
UK FRC Publishes New Standard for Sustainability Assurance
The UK Financial Reporting Council (FRC) has published ISSA (UK) 5000, a new standard setting out general requirements for sustainability assurance engagements.
The standard aims to ensure quality and consistency for practitioners verifying sustainability reporting and aligns with the global benchmark issued by the International Auditing and Assurance Standards Board (IAASB) in November 2024.
While voluntary for UK assurance providers, the standard is intended to enhance the credibility of sustainability reporting, support informed investment decisions, and strengthen the UK's position as a hub for sustainable finance.
The move comes amid ongoing government consultations on mandatory sustainability reporting, UK Sustainability Reporting Standards (UK SRS), and assurance provider registration. Read more
AMERICAS
U.S. Banking Regulators Withdraw Climate Risk Management Principles for Large Banks
The U.S. banking regulators, the Federal Reserve (Fed), FDIC, and OCC, announced the withdrawal of the 2023 interagency Principles for Climate-Related Financial Risk Management for large financial institutions.
The principles, aimed at banks with over $100 billion in assets, provided guidance on managing physical and transition risks related to climate change.
The agencies stated that the principles are unnecessary, as banks are already required to have effective risk management practices under existing safety and soundness standards.
The decision, approved by five of seven Fed Board members, is part of a broader shift away from prior climate-focused policies, including the Fed's exit from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
Governor Michael Barr, who opposed the withdrawal, warned that revoking the principles ignores growing climate-related financial risks and undermines sound risk management practices. Read more
California pushes rulemaking on climate reporting laws to 2026
The California Air Resources Board (CARB) has pushed back the start of rulemaking for its new corporate climate reporting regulations to early 2026, after receiving extensive public feedback and continuing to refine which companies will be covered.
Originally slated for October 2025, the delay gives CARB more time to incorporate comments and finalize the framework. The new laws, SB 253 and SB 261, will require large U.S. companies doing business in California to disclose their Scope 1, 2, and 3 emissions and report on climate-related financial risks.
Reporting is still set to begin in 2026 for Scope 1 and 2 data, and 2027 for Scope 3, though CARB has signaled it will apply enforcement discretion in the early cycles.
To support companies preparing for the rollout, CARB also released a draft voluntary reporting template for Scope 1 and 2 emissions, open for feedback until October 27th. Read more
Brazil Establishes Sustainable Taxonomy
On November 3, 2025, Brazil established the Brazilian Sustainable Taxonomy (TSB) through Presidential Decree No. 12.705.
The framework classifies economic activities, assets, and projects that contribute to ESG objectives, based on scientific evidence, as part of Brazil's Ecological Transformation Plan.
The TSB aligns with the Paris Agreement, the Global Biodiversity Framework, UN conventions on desertification, and international and national legislation on human rights, labor, and equality. It applies across sectors including agriculture, energy, manufacturing, transportation, construction, and social services, and will be reviewed every five years. Read more
ASIA-PACIFIC
Hong Kong releases Annex documenting good practices on climate risk management
The Hong Kong Monetary Authority (HKMA)'s October 2025 guidance outlines good practices for banks in Hong Kong to manage climate-related risks.
It emphasizes integrating climate risk into overall risk management, governance, strategy, and risk appetite, while identifying and assessing both physical and transition risks across business lines.
Banks are expected to use scenario analysis and stress-testing to evaluate potential impacts and provide transparent disclosures on how climate risks are managed and could affect the institution.
Although the guidance is non-binding, it signals a supervisory priority and encourages banks to align with global standards while strengthening risk frameworks to support sustainable finance. Read more
Taiwan Financial Services Commission releases 4th edition of Sustainable Finance Indicators
The 4th edition of Taiwan's Sustainable Finance Evaluation Indicators for 2025 assesses 96 financial institutions, including banks, asset management firms, and life insurers.
The updated framework introduces new indicators covering the share of sustainable economic activities, the proportion of designated sustainability personnel holding sustainable finance credentials, and transition strategies in carbon-intensive sectors.
The 2025 edition underscores Taiwan's ongoing commitment to strengthening its sustainable finance ecosystem, using these indicators as a key tool to measure, benchmark, and accelerate progress across the financial industry. Read more
Securities and Exchange Commission of Thailand updates ESG Fund Requirements
The updated guidelines for the Thai Mutual Fund for Sustainability (Thai ESG Fund) broaden the scope of eligible sustainable assets to include investments in Real Estate Investment Trusts (REITs) and Infrastructure Funds (Infra Funds) that demonstrate strong sustainability or environmental performance, as verified by sustainability evaluators using internationally aligned standards.
This expansion aims to diversify investment opportunities and channel more capital toward sustainable sectors, supporting Thailand's broader economic development and transition to a greener economy. Read more
Other News & Resources
- Singapore's Competition and Consumer Commission publishes Guide on Quality-Related Claims. Read more
- ISO releases guidelines for standard ISO 17298: Biodiversity for organizations — Guidelines and Requirements. Read more
- GHG Protocol launches consultation on revised Scope 2 Guidance. Read more
- ISSB consultation on updating the SASB Standards and Industry Guidance, with comments open until November 30, 2025. Read more
- NZAM to relaunch in 2026 with reduced requirements, dropping the 2050 net-zero target for signatories. Read more
- ECB imposes first fine for failing to sufficiently identify climate risks. Read more
Podcast
Listen to our latest podcast with Asset Impact on the EBA Pillar 3 consultation and what it means for banks operating in Europe. Listen here
Events
Meet us at Horizon Deep Tech Summit in Madrid on 26-27 November, where Dr. Inna Amesheva will be speaking at a roundtable on "NextGen Capital: Unpacking Sustainable and Angel Investing Trends"
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