A Regulatory Field Guide
- Christopher lee
- Jul 14
- 5 min read
Our ESG Regulation Analyst Luciano Asinelli explains the current global regulatory changes, updates and takes a view on regulation intensity worldwide.
Key Takeaways
EU delays major ESG directives: CSRD and CS3D reporting deadlines pushed to 2028–2029 under the “stop-the-clock” measure.
SBTi, ISSB, and TNFD scale global ambition: New consultation, roadmap tools, and campaigns launched ahead of COP30.
Stricter ESG labels and naming rules in Europe: France’s ISR label reform and ESMA’s fund naming guidance drive reclassifications.
Asia-Pacific accelerates standard adoption: Japan, Hong Kong, and Australia finalise disclosure frameworks aligned with ISSB.
Latin America gain regulatory traction: Award recognition and cross-border discussions signal momentum.
SEC pulls back in the US: The Commission halts defence of its climate disclosure rule amid legal pressure; US Congress pushes back on EU ESG rules.
Global Developments
SBTi Launches Draft Corporate Net-Zero Standard V2
March 18, 2025
The Science-Based Targets initiative (SBTi) released a draft of its Corporate Net-Zero Standard Version 2 for public consultation. This version aims to refine criteria for corporate net-zero targets, emphasising transparency and accountability in emissions reductions. Stakeholders are encouraged to provide feedback during the consultation period, which remains open until June 1, 2025.
ISSB Roadmap Development Tool Released
Date: March 26, 2025
The International Sustainability Standards Board (ISSB) launched a Roadmap Development Tool to assist jurisdictions in planning the adoption of ISSB standards. This tool is designed to facilitate the integration of sustainability disclosure standards into national regulatory frameworks.
TNFD Expands Adoption Ahead of COP30
Date: March 10, 2025
The Taskforce on Nature-related Financial Disclosures (TNFD) commenced its next global adoption campaign in preparation for COP30 in Belém. The campaign focuses on encouraging organisations to incorporate nature-related risks and opportunities into their financial disclosures.
IOSCO Issues ESG Assurance Recommendations
Date: March 2025
The International Organisation of Securities Commissions (IOSCO) published a report on ESG assurance, guiding on improving the reliability and comparability of ESG-related disclosures. The report emphasises the importance of high-quality assurance processes in enhancing investor confidence.
Europe
CSRD & CS3D Delayed Under Stop-the-Clock Directive
Date: April 3, 2025
The European Parliament approved a temporary suspension, known as the 'stop-the-clock,' on the implementation timelines for the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). This pause aims to provide companies with additional time to prepare for compliance
CSRD: Wave 2 companies report by 2028 (FY2027); Wave 3 by 2029 (FY2028).
CS3D: Applies to large companies from 2028 (FY2027).
ESMA Naming Rule Forces ESG Fund Rebrands
Date: January 3, 2025
The European Securities and Markets Authority (ESMA) implemented a rule requiring funds with ESG-related names to meet specific sustainability criteria. A recent analysis indicates that over half of the funds will need to either adjust their investment strategies or change their names to comply with the new regulation. The end of the transition period is the 21st of May, after which companies will have to comply with the guidelines.
SFDR Review in Progress
Date: March 2025
The Sustainable Finance Disclosure Regulation (SFDR) continues to evolve, with recent discussions focusing on addressing existing challenges and exploring future developments. Key areas of attention include improving data quality, enhancing clarity in disclosure requirements, and aligning with global standards. The SFDR Level 1 (entity-level) review is expected to take place before mid-2025.
FCA Proposes SDR Rules for Portfolio Management
Date: February 18, 2025
The UK's Financial Conduct Authority (FCA) has provided an update on extending the Sustainability Disclosure Requirements (SDR) to portfolio management. This update outlines the proposed approach and seeks feedback from stakeholders regarding the implementation process.
France Overhauls ISR Fund Label
Date: April 2, 2025
Following an intense consultation period, the French government has now completed its reform of the ISR (Investissement Socialement Responsable) fund label.
From March 2025, ISR-labelled funds must exclude fossil fuel companies and demonstrate clear, measurable environmental or social impact, making it stricter than before. The ISR have integrated SFDR PAIs as reference metrics. This reform aligns the French label more closely with EU Taxonomy principles, SFDR Article 9 standards and the UK SDR labelling regime, leading to a wave of fund reclassifications to meet the new criteria.
Asia-Pacific
Australia Publishes Reporting Guidelines
Date: March 31, 2025
The Australian regulator issued a new guide to assist companies in preparing for mandatory sustainability reporting starting as soon as 2025 for phase-in Group 1 companies. The guide outlines reporting requirements, timelines, and best practices to facilitate compliance and enhance transparency, supporting companies in integrating sustainability considerations into their corporate reporting frameworks. ASIC (Australian Securities and Investments Commission) AASB standards are fully aligned with TCFD guidelines, ISSB/IFRS metrics and SASB industry-specific standards.
Singapore Exchange Regulation (SGX RegCo) Reports Modest Progress
Date: March 11, 2025
Singapore Exchange Regulation (SGX RegCo) and the Centre for Governance and Sustainability (CGS) released a review indicating modest progress among issuers in climate-related disclosures. The report emphasises the need for continued efforts to improve the quality and comprehensiveness of climate reporting, encouraging issuers to enhance their sustainability disclosure practices.
Japan Issues First ISSB-Aligned Standards
Date: March 5, 2025
Japan's Sustainability Standards Board of Japan (SSBJ) issued its first set of sustainability disclosure standards, aligning with the ISSB guidelines. These standards aim to enhance the consistency and comparability of sustainability information disclosed by Japanese companies, facilitating better decision-making by investors and stakeholders. Prime-listed companies are given a two-year voluntary compliance period before such rules become mandatory as early as March 2027.
Hong Kong Launches HKFRS Sustainability Standards
Date: March 4, 2025
Hong Kong published the Hong Kong Financial Reporting Standards (HKFRS) Sustainability Disclosure Standards, providing a framework for companies to report on sustainability-related risks and opportunities. The standards are designed to align with international best practices, such as ISSB/IFRS metrics. The HKFRS Sustainability Disclosure Standards have an effective date of 1 August 2025.
Latin America
2025 Spotlights Regional Regulatory Efforts
Date: March 21, 2025
At the International Bar Association's 2025 conference in Lima, legal and financial experts highlighted key developments in sustainable finance across the region.
Discussions focused on growing ESG disclosure requirements, climate risk integration in financial supervision, and the evolution of green bond markets in countries like Brazil, Chile, and Colombia. The event marked a strong push for harmonised ESG reporting frameworks across Latin America, echoing international trends.
Sustainable Finance Awards Celebrate Leaders
Date: March 4, 2025
Global Finance Magazine's Sustainable Finance Awards 2025 honoured institutions in Latin America for their contributions to sustainable finance. Notably, BTG Pactual and Bancolombia received top honours for their initiatives in green bonds and impact investing, showcasing a growing emphasis on climate-aligned financial innovation.
The awards reflect the region’s move to innovative green finance.
Africa
South Africa: Advancing ESG Frameworks and Climate Finance
Date: January 5, 2025
Mandatory ESG Reporting on the Horizon in South Africa. The country is moving towards mandatory ESG and carbon-neutral strategy reporting. While not yet compulsory for the 2025–26 fiscal year, legislation is anticipated soon in 2026, aligning with frameworks like the King Code and Johannesburg Stock Exchange (JSE) sustainability guidelines.
Pan-African Initiatives and Recognitions
Date: February 5, 2025
GRI and ASEA Collaboration: The Global Reporting Initiative (GRI) and the African Securities Exchanges Association (ASEA) have partnered to promote GRI-aligned sustainability disclosure practices across African capital markets, including capacity-building workshops and the development of ESG reporting guidelines.
United States
SEC Suspends Defence of Climate Rule
Date: March 27, 2025
The U.S. Securities and Exchange Commission (SEC) has voted to cease defending its 2023 climate disclosure rules in court, effectively halting the implementation of requirements for companies to disclose climate-related risks and greenhouse gas emissions. This decision reflects a shift in regulatory priorities under the current administration.
US Senate Bill Opposes EU ESG Enforcement Abroad
Date: March 12, 2025
Senator Hagerty has introduced legislation aimed at protecting U.S. businesses from what is perceived as overreach by European regulators. The proposed bill seeks to limit the extraterritorial impact of EU sustainability regulations on North American companies.
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