Breaking news – Sustainable Finance- March 2025

What’s new in sustainable finance?
📢 Omnibus package
The European Commission has introduced a set of proposals aimed at simplifying EU regulations in several areas, including sustainability reporting, due diligence, the carbon border adjustment mechanism (CBAM), and investment programs.
Key takeaways:
➡️ CSRD
• Exclude 80% of companies previously covered (those with less than 1,000+ employees and up to €450M turnover)
• Postpone some reporting requirements until 2028
• Cancel future sector-specific standards requirements
➡️ Taxonomy
• Introduce financial materiality threshold and reduce data points requirements by 70%
• Voluntary Taxonomy reporting for companies in the future CSRD scope
• Simplification of DNSH criteria
➡️ CSDDD
• Postpone sustainability due diligence requirements for large companies until 2028
• Limit due diligence focus to direct business partners
• Reduce reporting frequency from annually to every 5 years
• Ease requirements for SMEs and small mid-caps
➡️ CBAM
• Exempt small importers (mainly SMEs and individuals)
• Simplify rules for remaining CBAM companies
• New proposal for CBAM scope extension in 2026
🔜 Next Step
The proposal is now with the European Parliament and the Council for review and approval. The changes to CSRD, CSDDD, and CBAM will take effect after agreement and publication in the EU Official Journal. 
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📢  PCAF Upcoming Guidance on Avoided Emissions Reporting
The Partnership for Carbon Accounting Financials (PCAF) is preparing to release guidance on the reporting of avoided emissions for financial institutions.
Key aspects of the forthcoming guidance include:
➡️ Counterfactual Scenarios: Recommending a conservative and realistic approach for comparisons
➡️ Data Quality & Assurance: Establishing standards for reliable data and calculation methods
➡️ Annual Updates: Encouraging yearly clarifications on the delivery of expected avoided emissions
This guidance will aim to provide clarity and consistency in the reporting of avoided emissions, supporting better transparency in the financial sector’s climate-related claims.
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📢 Upcoming Changes to ESG Indexes in Line with ESMA Guidelines 
In response to new rules from the European Securities and Markets Authority (ESMA), many index providers are adjusting their methodologies and renaming ESG-related indexes to meet compliance requirements.
🗒️ Key highlights:
➡️ New naming guidelines: Funds using sustainability-related terms must meet Paris-aligned or Climate Transition Benchmark (CTB) exclusion criteria 
➡️Some providers are introducing custom solutions to comply with the new standards 
➡️Funds may need to rebrand or revise their investment policies 
➡️These changes take effect in May, with March as the final opportunity for quarterly rebalancing

📢 New Science-Based Ocean Goals
The SBTN initiative has launched its first science-based ocean goals for seafood value-chain, helping businesses integrate the latest science into strategies for more sustainable and resilient marine supply chains.
Key objectives:
🐟 Avoid and reduce overexploitation: Focus on wild fisheries to prevent reliance on overexploited stocks and improve the health of marine ecosystems.
🌊 Protect marine habitats: Minimize the impact of fishing and aquaculture on critical marine and transitional habitats that are essential for biodiversity.
🦈 Reduce risks to endangered species: Limit harmful effects on endangered and protected marine species, vital to maintaining ecological balance. .
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