June 2025 Newsletter

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

UK Consults on Sustainable Finance Standards and Requirements

The UK government has launched three sustainable finance consultations including on the new UK Sustainability Reporting Standards (UK SRS), on climate transition plan requirements and on sustainability assurance. All will be open until 17th September, with final rules expected later in 2025.

The UK SRS is based on the ISSB standards for sustainability and climate-related disclosures. The new standards include drafts that align with ISSB’s S1 (general sustainability-related) and S2 (climate related) but include six amendments, aimed at a specific UK context. The consultation seeks views on the costs and benefits of implementing the standards.

The consultation on climate transition plans seeks views on how the government should mandate transition planning and what guidance would be needed to help firms align.

The government is also seeking views on a proposal to introduce a disclosure regime to help firms report sustainability-related financial disclosures against frameworks including the UK SRS, European Sustainability Reporting Standards (ESRS) and ISSB Standards.

EU debates SFDR categories

European regulators are divided over a proposed “ESG collection” category within SFDR. The European Commission’s recent consultation included a proposal from the EU Platform on Sustainable Finance to introduce three fund categories: sustainable, transition, and ESG collection.

The ESG collection category would cover funds that integrate ESG factors but don’t meet stricter sustainability criteria. Spain’s CNMV supports this broader category, suggesting it include exclusion-based and improvement strategies, while France’s ADEME prefers tighter standards and proposes a separate “climate solutions” category. In contrast, Germany’s BaFin, Austria’s FMA, and the Netherlands’ AFM oppose the ESG collection idea, citing risks of vague definitions and inconsistent disclosures. They advocate for clearer, enforceable categories. Concerns include potential data overload and complexity. The European Commission will use the consultation feedback to guide an impact assessment and possible SFDR revisions later in 2025.

Investors continue to back sustainability

A recent BNP Paribas survey of 420 institutional investors representing $34tr in AUM across 29 countries found that investors are continuing to pursue sustainable investment despite the ongoing political backlash. An overwhelming 87% of respondents said their ESG goals remain unchanged, and fewer than 3% plan to scale back. However, many are adopting a more discreet approach – nearly half of the group retaining their commitments said they had become less vocal about their plans due to reputational concerns.

The survey highlights a shift from broad ESG frameworks to more targeted thematic strategies, such as climate resilience, biodiversity and social equity. Notably, 49% of investors reported plans to increase allocations to energy transition assets and 46% said they will invest in low-carbon assets and divest from high-carbon assets. The survey also reports that private capital managers are increasingly supporting ESG and sustainability.

J.P. Morgan reports massive opportunity for European asset managers in sustainable investment

A recent report by J.P. Morgan highlights a $11.7 trillion opportunity for European asset managers to align with asset owners’ growing demand for sustainable investing. The report emphasises that asset managers who embed sustainability in their investment processes are best positioned to capture this capital shift. And notes recent examples including The People’s Pension (TPP) which redirected £28 billion  from State Street to Amundi and Invesco on account of their alignment with its climate priorities as well as CalSTRS which awarded $450 million to Nordea and $150 million to Ninety One, also based on their sustainability commitments.

The report also highlights that the US backlash could be a positive for European asset managers and suggests that regulations such as SFDR 2.0 could help to drive the European sustainable finance market, which it believes will become more targeted, thematic, and performance-driven.

BlackRock returns to Texas

BlackRock has been removed from the Republican blacklist which barred the asset manager from managing pensions in the state of Texas and claimed it had prioritized ESG at the expense of its fiduciary duty. The decision is being claimed as a victory by both sides with Republican state officials and the oil and gas industry celebrating the win over so-called “woke capitalism”. The ban was initiated in 2022 and claimed BlackRock had “boycotted” the fossil fuel industry by virtue of its affiliation with groups like the Net Zero Asset Managers initiative and Climate Action 100+, which the asset manager has now left.  

Meanwhile BlackRock continues to offer ESG-labelled funds and employs a large number of responsible investment specialists.

SEC abandons anti-greenwashing rules

The SEC has withdrawn its proposed anti-greenwashing disclosure rules for ESG-labelled investment funds. Originally introduced in 2022, the rules aimed to bring transparency and consistency to ESG fund marketing by requiring detailed disclosures in fund prospectuses, annual reports, and adviser brochures. These included standardised formats and GHG data for environmentally focused funds. The change in direction is consistent with a wider pattern that seeks to distance the SEC from the agenda initiated by former Chair Gary Gensler under the Biden Administration.

More companies reject anti-DEI proposals

Shareholders at Walmart and Netflix have overwhelmingly rejected proposals aimed at reversing diversity, equity, and inclusion (DEI) initiatives, with less than 1% support for the measures at each company’s 2025 annual meetings. This follows similar recent rejections at companies including Apple, Amazon, Deere, and Goldman Sachs, Levi Strauss, and Disney.

Proposals made by the Conservative think tank the National Center for Public Policy Research (NCPPR) urged companies to scrap DEI programmes following the Supreme Court case against Harvard and claimed that companies needed to go further in “eliminating” rather than “repackaging” DEI policies. Both companies responded by recommending voting against the proposal and noting their continuing support for DEI.

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