Key news in this edition:
- Net Zero Banking Alliance dissolves following mass departure of major banks.
- EU taxonomy rulings clarify scope of sustainable activities.
- Companies rethink how ESG fits in corporate governance.
Editorial
The past month has shown a continuation of the opposing forces that have been defining the ESG sphere in the recent times. On one side, voluntary and internal initiatives are losing momentum, as shown by the collapse of the Net Zero Banking Alliance and major companies in the UK scaling back ESG committees and diversity roles. On the other side, regulatory and legal efforts are still visible. The EU’s Taxonomy Day rulings confirmed the Commission’s authority to decide what qualifies as sustainable, giving clarity, yet reopening old debates about credibility. In Australia, the ASIC case against Fiducian shows that regulators are becoming more assertive, with greenwashing claims now tested in court rather than just public opinion.
Elsewhere, the focus has turned to funding and delivery. At the Second Africa Climate Summit in Addis Ababa, leaders pledged to mobilise USD 50 billion a year in climate finance through new regional vehicles such as the Africa Climate Innovation Compact and the African Climate Facility. Together with corporate projects like Barclays’ enhanced weathering investment and Apple’s forest restoration initiative, these developments point to steady progress in delivery and evidence that while ESG is being redefined, it is not standing still. Voluntary action and regulation continue to pull in different directions, influencing how companies define and deliver on their sustainability goals.
Net Zero Banking Alliance dissolves following mass departure of major banks
On 3 October, the Net Zero Banking Alliance (‘NZBA’) was disbanded with immediate effect, following a vote to transition from a “member-based alliance to establish its guidance as a framework”.
The NZBA was established in 2021 by the United Nations Environment Programme’s Finance Initiative, with the aim of encouraging banking institutions to tailor their investments to have smaller carbon footprints, in order to achieve net zero emissions by 2050. The dissolution of the NZBA follows a mass exit of several major banks in the United States including JPMorgan Chase, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs. The move coincided with the re-election of Donald Trump, which, over several months has seen a largescale departure from pro-ESG initiatives and the rollback of climate-related policies.
The dissolution of the NZBA is a reflection of the growing uncertainty around the current status and commitment towards sustainability, particularly in the financial sector, which is global by nature. According to the Bankers Association for Finance and Trade (‘BAFT’), the disbanding of the NZBA illustrates the “difficulty of establishing single standards that are flexible enough to accommodate the many bank operating models and regional variances on sustainability goals”. This sentiment reaffirms one of the long-standing challenges that remains a key barrier to the success of global ESG measures, the lack of standardization in sustainability metrics.
While the decision has raised concerns about the banking sector’s commitment to addressing the impact of global warming, many seem to question if the NZBA and similar financial alliances have brought any real impact to climate action. At the height of its success, the NZBA had almost 150 members and had committed to include emissions from their lending or investment portfolios in their reporting to increase accountability beyond their direct operations. These efforts were supported by frameworks and scenario planning tools used to assess climate-related risk and decarbonization efforts. However, the evidence that banks have contributed to actual emissions reductions and real economy transformation remains limited and unverified.
So what?
The dissolution of the NZBA and other financial alliances continues to raise concerns on the future of the role of banks in addressing the climate crisis and driving sustainability efforts. Although the guidance and norms set by the NZBA will remain publicly available, the impact of its dissolution cannot be understated. What remains clear is the crucial role that government and regulators will need to play to drive meaningful change.
[Contributor: Boitumelo Mogale]
EU taxonomy rulings clarify scope of sustainable activities
On 10 September 2025, the General Court of the European Union dismissed two closely watched challenges against the European Commission’s sustainable finance taxonomy — the classification system that defines which economic activities can be marketed as environmentally sustainable for investment purposes.
The first case was brought by Austria, with support from Luxembourg and Greenpeace, contesting the Commission’s decision to include natural gas and nuclear energy in the EU taxonomy as “transitional” activities that can contribute to climate mitigation under certain conditions. Austria argued that the inclusion breached the EU’s climate obligations and the “do no significant harm” principle, claiming that nuclear waste and fossil fuel reliance could not be reconciled with sustainability. The Court rejected those arguments, ruling that the Commission had not exceeded its powers and was entitled to exercise discretion in balancing environmental and energy policy goals.
The second case, filed by ClientEarth, challenged the inclusion of forest biomass and bioplastics production under the taxonomy. The NGO argued that such activities cause significant environmental harm and should not qualify as sustainable investments. The Court again sided with the Commission, finding that the delegated act’s criteria were consistent with existing EU law and that the taxonomy’s role is to guide transparency, not to impose funding restrictions.
Together, the rulings confirm the legality of the Commission’s pragmatic approach to defining “green” activities. France and several Central and Eastern European member states welcomed the decision as recognition of nuclear energy’s contribution to decarbonisation and energy security. Austria and Luxembourg, meanwhile, have indicated plans to appeal, calling the judgment a setback for climate integrity.
So what?
The rulings give legal clarity for investors and governments but also highlight divisions within the EU. By allowing gas and nuclear to stay in the taxonomy, the Court has confirmed a more flexible view of what counts as sustainable, which could direct new investment into energy transition projects. However, this broader definition risks weakening the taxonomy’s credibility, and may put more pressure on investors to prove that their “green” activities genuinely support climate goals.
[Contributor: Dominik Wilk]
Companies rethink how ESG fits in corporate governance
Recently, several major UK-listed companies, including consumer electronics group Currys and luxury fashion brand Burberry, disbanded their high-level ESG and diversity committees and leadership roles. The moves follow the 2024 revision of the UK Corporate Governance Code, which removed all explicit references to environmental, social and governance matters. The latest changes appear to mark a turning point in how British companies approach sustainability at the board level.
While some firms, including Currys, have said they remain committed to sustainability despite the absence of a formal oversight structure, the dissolution of these committees signals a broader rethink of corporate priorities. Some boards argue that ESG is now sufficiently embedded across their business units and that separate committees are unnecessary duplication. Others see it as a practical response to investor fatigue, political backlash, and the growing costs of disclosure and compliance. Whatever the reasoning, the shift highlights how the ESG agenda is becoming less visible in formal governance, even as public expectations remain high.
So what?
With UK regulatory expectations on ESG softening, companies seem to be recalibrating how they manage sustainability, weighing cost and simplicity against stakeholder trust and transparency. The coming months will show whether folding ESG oversight into existing committees leads to more meaningful integration or simply leaves firms more exposed to reputational and regulatory risk.
[Contributor: Haddie Hamal]
USD 50 billion annual climate finance commitment for Africa
On 10 September 2025, at the close of the Second Africa Climate Summit, a climate change-focused conference supported by the African Union, African leaders formally adopted the Addis Ababa Declaration on Climate Change and Call for Action, a declaration of their renewed commitments to mobilise funding and encourage cooperation in the continent’s fight against climate change. The declaration has yet to be published to the general public, however based on the information shared at the adoption ceremony, it reportedly confirmed the launch of the Africa Climate Innovation Compact and the African Climate Facility, two climate-focused financing vehicles established under the initiative of Abiy Ahmed, the incumbent prime minister of Ethiopia (2018-present). These vehicles have been committed to mobilising USD 50 billion annually in climate finance, aiming to deliver 1,000 Africa-led solutions to climate change challenges by 2030.
The declaration also reportedly confirmed additional commitments made by local and international financing partners for Africa. These included the signature of a Cooperation Framework between several African financial institutions, including the African Development Bank, African Export-Import Bank, and the Africa Finance Corporation, to operationalise the existing Africa Green Industrialisation Initiative, a cooperative initiative backed by USD 100 billion in financing, to support green industrialisation projects in energy-intensive industries. The government of Denmark reportedly committed USD 79 million for agricultural transformation projects, and the government of Italy reaffirmed a previous pledge of USD 4.2 billion to the Italian Climate Fund, 70 percent of which is dedicated to Africa.
So what?
The Second Africa Climate Summit indicated a continued commitment from African leaders to find locally-developed and contextually appropriate responses to climate change, which will be the position African leaders bring to COP30, set to be held in November 2025 in Brazil. These commitments illustrate that African governments are committed, at least in rhetoric, to advancing their climate change responses and strategies, although it remains to be seen whether this will translate into implementation. The declaration noted that Africa needs over USD 3 trillion to meet its climate-related goals by 2030, but received USD 30 billion between 2021 and 2022, illustrating the significant gap between the supply and demand of climate finance on the continent. However, the Summit and the declaration have provided an opportunity for African leaders to commit to a common agenda ahead of COP30, which observers hope will help to present a unified voice and stronger negotiating stance at the international conference.
[Contributor: Emma Shewell]
ASIC sues asset manager over ESG misrepresentation
On 3 October 2025, the Australian Securities and Investments Commission (‘ASIC’), the financial services regulator in Australia, announced the launch of civil penalty proceedings in the Supreme Court of New South Wales against Fiducian Investment Management Services Limited (‘FIMSL’), an Australian asset management firm. ASIC alleges that FIMSL engaged in misleading and deceptive conduct relating to its ESG fund, which operated from 2015 to 2024.
Specifically, ASIC alleges that while the ESG fund’s Product Disclosure Statement (‘PDS’) promised investors a fund which would avoid harmful investment activities with robust monitoring of portfolio exposure, such controls were not implemented. Despite investor complaints that the fund held investments in multiple mining and petroleum companies, contrary to the PDS, ASIC alleges that neither the investments nor the PDS were altered. The regulator criticised FIMSL for failing to ensure that claims regarding sustainability were supported when taking advantage of investor interest in ESG investments. ASIC is now seeking monetary penalties and adverse publicity orders, whereby FISML would be compelled to publicise information regarding its alleged wrongdoing.
So what?
The case against FIMSL follows a pattern of heightened regulatory action against alleged greenwashing in the asset management industry over the last few years, with high profile examples of firms facing substantial fines in multiple jurisdictions. The need to ensure that sustainability claims are paired with robust monitoring and due diligence is likely to remain an important consideration for businesses promoting ESG initiatives in the coming years.
[Contributor: George Corr]
Barclays and Apple announce new carbon removal initiatives
On 1 October 2025, Barclays signed its first-ever carbon removal agreement with UK-based project developer UNDO, which specialises in enhanced rock weathering – a process that speeds up the natural breakdown of silicate rock to capture and store CO₂. The project will remove over 6,500 tonnes of carbon dioxide by spreading crushed rock across 10,000 acres of farmland in Ontario, Canada. As the rock reacts with CO₂, it locks carbon into soil and water for the long term while also improving soil health. The deal follows Barclays’ 95-percent cut in Scope 1 and 2 emissions by the end of 2024 and supports its broader ambition to reach net zero by 2050.
At the same time, Apple has launched a new forest restoration project in California’s Gualala River Forest, partnering with The Conservation Fund to protect and sustainably manage coastal redwood forests. Apple will receive verified carbon credits as the forest regrows, supporting biodiversity and local communities. The project is part of Apple’s Restore Fund, created in 2021 with Conservation International and Goldman Sachs to scale carbon removal solutions globally. To date, the fund has supported more than 20 conservation and regenerative agriculture projects across six continents as Apple works towards carbon neutrality across its value chain by 2030.
So what?
Both initiatives point to a growing convergence between nature-based and engineered carbon removal approaches. Apple’s forest investments and Barclays’ enhanced weathering deal may look very different, but together they reflect a shift from pledges to tangible delivery, and from offsetting to durable carbon storage. As more companies step into this emerging space, they help give more legitimacy to a market still defined by pilot projects and fragmented standards. The challenge now is ensuring these early efforts scale fast enough to make a measurable dent in global emissions.
[Contributor: Federico Ingretolli]
