May 2025 Newsletter

Here is our latest selection of sustainability stories from May 2025.

EU continues to debate CSRD

The European Central Bank (ECB) has warned the EU against oversimplifying proposed changes to the Corporate Sustainability Reporting Directive (CSRD). While the ECB supports reducing compliance burdens, it notes that the level of cuts proposed in the Omnibus package could undermine financial stability, hinder climate goals, and limit the availability of sustainability data for investors. Meanwhile EU Ombudsman Teresa Anjinho has launched an investigation into the EU Commission’s approach to the Omnibus package. A group of eight civil society organizations alleges that the Commission acted undemocratically and failed to follow the proper process which should have included a public consultation and impact assessment on the draft legislation. Finally, a survey carried out by #WeAreEurope (including over 1,000 responses across 26 countries) revealed strong support for CSRD in its original format by European companies. 61% expressed satisfaction with the CSRD framework, while only 25% supported the Omnibus proposal to reduce CSRD’s scope and 51% called for major changes to the proposed package. Businesses expressed frustration at the ongoing debate, with the majority calling for clarity and guidance not weaker rules.

FCA pauses plan to extend SDR to portfolio managers

The FCA has paused its plan to extend Sustainability Disclosure Requirements (SDR) and investment labels to portfolio managers. Despite broad industry support, the FCA cited the need for more time and clarity on implementation challenges. Feedback highlighted concerns about applying naming rules, aligning with other sustainability regulations, and practical use of labels. Originally proposed in April 2024, the extension aimed to enhance transparency in wealth and portfolio management. The FCA now believes it is “not the right time to finalise these rules”, opting instead to reassess and ensure firms are ready for effective implementation.

EU Call for Evidence on revisions to SFDR

The European Commission has launched a Call for Evidence to support its review of the Sustainable Finance Disclosure Regulation (SFDR). The Commission acknowledged failings with the SFDR such as unclear definitions, overlapping rules, and limited data availability. The review aims to simplify the SFDR framework and tackle these challenges to enhance the framework’s effectiveness, and reduce operational burdens. The review also considers how SFDR interacts with other EU sustainable finance rules. This is the final consultation before legislative proposals are expected in Q4 2025.

Younger investors continue to support sustainable investing, according to survey

A recent Morgan Stanley survey revealed that 80% of Gen Z and Millennial investors plan to increase their allocations to sustainable investments in the coming year. This surge in interest is said to be driven by strong confidence in the financial performance of sustainability-focused strategies and a growing desire to support positive environmental and social outcomes by younger people. The survey, which included 1,765 active individual investors with more than $100,000 in investable assets globally, found that despite political pushback on ESG, younger generations remain interested in sustainable investing, with 99% of Gen Z and 97% of Millennial investors expressing interest.

Coca-Cola changes labels in response to greenwashing accusation

Coca-Cola has agreed to revise its recycling claims on plastic bottles following a greenwashing complaint by the European Consumer Organisation (BEUC). The company will replace misleading labels making statements like “100% recycled plastic” with more accurate versions clarifying that only parts of the bottle, e.g. “excluding caps and labels, are made from recycled materials”. Coca-Cola also committed to removing green imagery that could mislead consumers about the environmental impact of its packaging. These changes follow voluntary engagement with the EU’s Consumer Protection Cooperation network and aim to ensure marketing materials do not overstate sustainability claims.

If you’d like to know more or discuss any of these topics please get in touch.