October 2025 Newsletter

Top ESG and sustainability stories for October 2025.

EU continues to debate Omnibus package

In mid October, the EU Legal Affairs Committee reached a political agreement on the CSRD/CSDDD Omnibus package, significantly narrowing the scope of both directives, raising thresholds for CSRD to 1,000 employees and €450 million turnover, and for CSDDD to 5,000 employees and €1.5 billion turnover. Then, later in the month, the European Parliament rejected the proposal by a narrow vote (of just nine votes in a secret ballot) sending the proposal back for renegotiation. The rejection highlights deep divisions on the topic, with some arguing the proposal didn’t go far enough, while others felt it went too far. The lack of transparency adds another layer of complexity. A revised position will be voted on at the 13 November plenary, with the goal of finalising legislation by year-end.

CARB delays final rules and publishes emissions template for SB253

The California Air Resources Board (CARB) has delayed initial rulemaking for its new climate reporting regulations (SB 253 and SB261) to Q1 2026, citing extensive public feedback and ongoing discussions on covered entities. CARB also released a draft template for reporting Scope 1 and Scope 2 greenhouse gas emissions under SB 253. This is intended to help streamline compliance and its use is voluntary for the 2026 reporting cycle. The template covers organization details, third-party assurance confirmation, inventory boundary approach, and emissions data. Scope 1 and 2 reporting begins in 2026 for fiscal year 2025, with Scope 3 reporting starting in 2027. CARB will finalize reporting processes later this year.

FCA to regulate ESG rating providers

The UK government has finalized legislation to bring ESG ratings providers under the regulatory oversight of the Financial Conduct Authority (FCA). This marks the first time ESG ratings will be formally regulated in the UK. The move aims to improve transparency, reliability, and comparability in ESG assessments. The FCA will consult on detailed rules by the end of 2025, focusing on four key areas: methodology transparency, governance, systems and controls, and conflict-of-interest management. The regulation will apply to both UK-based and overseas providers serving UK clients, with enforcement beginning in June 2028.

Demand for climate resilience tech could create a $1 trillion opportunity – says McKinsey

McKinsey reports that demand for technologies supporting climate resilience and adaptation could create a $1 trillion investment opportunity by 2030. Rising human and financial impacts from climate disasters such as droughts, storms, and wildfires underscore the urgency for resilience solutions. In 2024, the U.S. experienced 27 billion-dollar climate disasters, triple the historical average, and global losses reached $162 billion in the first half of 2025. This trend signals growing market interest in infrastructure, asset protection, and operational adjustments to mitigate climate risks. Private capital is expected to play a pivotal role in scaling these technologies, according to the report.

Exxon uses First Amendment in legal action to stop California climate regulations

ExxonMobil has filed a federal lawsuit against California challenging the climate disclosure laws, SB 253 and SB 261. Exxon argues the regulations violate First Amendment rights to free speech, claiming they “stigmatize” companies and “compel” them to adopt the state’s preferred ideological climate narrative. Exxon further claims the rules are costly and burdensome especially for larger companies, and criticises the use of the GHP Protocol framework which focuses on absolute emissions rather than emissions intensity, and does not take account of avoided emissions.

NZAM proposes weaker signatory requirements

The Net Zero Asset Managers (NZAM) initiative has announced it will issue a revised “commitment statement” to signatories before the end of the year. This follows a suspension of its core activities in January and a full review prompted by diverging global regulatory pressures. The new statement will allow signatories to opt in or out within three months, after which NZAM will re-publish its signatory list. While the content of the updated commitment remains undisclosed, the move reflects NZAM’s effort to remain “fit for purpose” amid political scrutiny and shifting expectations, particularly from U.S.-based asset managers. Expected changes include the removal or optionality of specific net zero target requirements and removal of the requirements for firms to make an explicit commitment to align investments with net zero by 2050. Story 1 Headline

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