EU Financial Regulators Release Guidelines for Integrating ESG Risks into Stress Tests
Europe’s three primary financial regulatory agencies, the European Supervisory Authorities (ESAs) announced the publication of their finalized Guidelines on environmental, social, and governance (ESG) stress testing, aimed at enabling national regulators to integrate ESG risks into their supervisory stress tests for banks and insurance companies.
The ESAs include the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA), and the European Insurance and Occupational Pensions Authority (EIOPA).
According to the ESAs the new guidelines are designed to establish common standards for embedding ESG risks into stress testing methodologies across the EU’s financial system, ensuring that competent authorities consistently integrate ESG risks into their national supervisory stress testing activities, and encompass the integration of ESG risks into existing frameworks, as well as new complementary assessments for measuring the impact of ESG risks under adverse scenarios.
EU Parliament Backs Simplified Sustainability Reporting and Due Diligence Rules
The European Parliament has approved a provisional agreement with EU governments to simplify sustainability reporting and due diligence rules, reducing obligations for fewer companies to enhance competitiveness.
Equitable Earth Raises USD 14.7 Million to Scale Nature-Based Carbon Certification
Equitable Earth has secured EUR 12.6 million (approximately 14.7 million USD) in seed funding to advance its certification standard for high-integrity, nature-based carbon projects. Funding supports expansion of a global standard for high-integrity conservation and restoration projects
Paris-based carbon standards platform Equitable Earth has raised €12.6 million (approximately USD 14.7 million) in a new financing round, strengthening its efforts to expand certification for nature-based carbon projects. The funding will be used to scale the company’s certification program and accelerate the deployment of trusted standards across global carbon markets.
Founded in 2020, Equitable Earth was established to create a globally consistent certification framework for conservation and restoration projects. Its standard is designed to ensure that certified projects deliver verifiable climate benefits alongside positive outcomes for biodiversity and local livelihoods.
The program has received formal approval under the Core Carbon Principles of the Integrity Council for the Voluntary Carbon Market, positioning it among a limited group of high-integrity frameworks recognized in voluntary carbon markets.
Canada to Introduce Sustainable Investment Taxonomy in 2026
On December 12, 2025, the Government of Canada announced the next phase in developing a sustainable finance taxonomy to support investment alignment with net-zero goals. The Government of Canada announced the appointment of the Canadian Climate Institute to lead the development of a new sustainable investment taxonomy, with plans for the initial categorization system to identify green and transition investments to be released by the end of 2026.
The announcement follows an initial commitment by the prior Canadian government in 2024 to launch a sustainable investment taxonomy to be developed and operated by third-party organizations, with the new government formalizing those plans in its 2025 budget, released last month.
The announcement comes as several countries have instituted, or are in the process of developing sustainable finance taxonomies for their own jurisdictions, including China, Australia, the EU, Singapore, Hong Kong, and India, although the UK recently announced that it has decided not to proceed with plans for its own green taxonomy. The Canadian statement said that the new taxonomy will be voluntary and will be aligned with and broadly compatible with other taxonomies and frameworks around the world.
ISSB Issues Targeted Amendments to IFRS S2 to Support Implementation
The International Sustainability Standards Board (ISSB) has issued targeted amendments to the greenhouse gas (GHG) emissions disclosure requirements in IFRS S2 Climate-related Disclosures.
The International Sustainability Standards Board (ISSB) has issued targeted amendments to greenhouse gas (GHG) emissions disclosure requirements in IFRS S2 Climate-related Disclosures in response to specific application challenges that were identified as companies started to apply the Standard.
The amendments are based on feedback from the ISSB’s consultation earlier in the year. These changes provide relief and clarifications to support companies in applying the Standard while keeping investor information in focus and minimizing disruption to jurisdictions that are in the process of adopting or otherwise using ISSB Standards.
The amendments are effective for reporting periods beginning on or after 1 January 2027, with early application permitted.
GRI Opens Public Consultation on Updated Labour Standards Focused on Workforce Rights
The Global Reporting Initiative (GRI)has launched a public consultation on updated Topic Standards for workers’ rights, covering GRI 414 (Workers in Business Relationships), GRI 409 (Forced Labor), GRI 408 (Child Labor), and GRI 407 (Freedom of Association and Collective Bargaining).
Announced on International Human Rights Day, December 10, 2025, the consultation period runs until March 9, 2026, following approval by the Global Sustainability Standards Board (GSSB). These revisions address ongoing global labor challenges, such as worker poverty, informal employment, gender disparities, and persistent child and forced labor, while responding to demands for enhanced value chain accountability.
Proposed changes expand disclosures on due diligence, incident reporting, grievance mechanisms, worker engagement, and remediation across operations and business relationships. This final phase of the GRI Labor Project builds on prior consultations and involves a technical committee with tripartite representation. Global webinars are scheduled for December 16, 2025, and February 18, 2026.
China Releases Corporate Climate Reporting Standard
China has introduced its first unified corporate sustainability disclosure standard, aligning with global ESG trends and aiming to enhance transparency and environmental accountability among businesses.
China’s Ministry of Finance, alongside several other of the country’s ministries, central bank, and regulators, announced the release of its new “Corporate Sustainable Disclosure Standard No. 1 – Climate (Trial),” a new standard, aligned with the IFRS Foundation’s climate reporting standard, aimed at enabling companies to report on climate-related risks, opportunities, and impacts to support China’s green development goals.
While the new standard is being positioned by the Ministry of Finance as a trial document and applied initially as voluntary, the ministry said that it will expand its application over time to more companies and eventually to the implementation of mandatory climate-related disclosures.
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