After slashing Europe’s Sustainability Reporting Standards (ESRS) by more than 70%, the European Commission is finalizing the streamlined draft.  

The ESRS are the reporting standards required by Europe’s Corporate Sustainability Reporting Directive (CSRD). The European Financial Reporting Advisory Group (EFRAG) released the simplified standards late last year. This final draft maintains most of those changes, reducing the overall number of data points by 70% and thereby reducing compliance costs by 30%.  

 However, the Commission made some notable changes in three main themes: 

Another big revelation was that Europe rejected full alignment with the framework from the International Sustainability Standards Board (ISSB), an idea floated by the Commission a couple of weeks back.  

Public consultation ends June 3rd, and adoption is likely this year. 

Another simplification was revealed this week for Europe’s Deforestation Rule (EUDR). The beleaguered policy, which had already been delayed (twice), is meant to block imports of products (e.g., coffee, timber, cocoa, soy, cattle) produced on deforested land.

The new simplification exempts leather products and treaded tires from the list of covered goods. The move aims to support European industries and adds a certification system to reduce the need for due diligence and risk assessments.  

The timeline remains the same – meaning larger companies will have to comply starting December 30th, 2026, followed by smaller companies 6 months later.  

Anke Schulmeister‑Oldenhove of the WWF said, “We’re encouraged to see the EUDR finally moving from promise to practice. But now the EU must hold the line.” However, she adds that “Weakening the EUDR by exempting specific sectors would undermine the regulation’s credibility, make compliance more complex and enforcement less effective.” 

The comment period for the new EUDR simplifications is open until June 1st. 

Last year, the first global carbon tax for shipping under the “Net Zero Framework” gained a majority support of maritime nations and was expected to be adopted. However, at the last minute, it lost support due to the Trump Administration’s threatened tariffs on countries preparing to sign the pact.  

Now, after another unsuccessful meeting of the UN’s International Maritime Organization (IMO) in London last week, the deal is being pushed back to later in the year, and delegates are being asked to suggest alternative options.  

While the IMO Secretary-General Arsenio Dominguez said, “We are back on track, but we have to rebuild trust.” The Trump Administration is once again attempting to pressure delegates to block it. The US Federal Maritime Commission said, “The US will explore all potential remedial options to protect American consumers from a disputed and unneeded global carbon tax,” calling it a global version of Europe’s emissions trading system. 

The framework would require global shipping to reach net zero by 2050, and ships over 5,000 gross tonnage to pay a carbon tax. The majority of countries (55) still support it, claiming it is preferable to the growing patchwork of carbon pricing rules in Europe, the UK, and other nations.  

Shortly after Trump took office in 2025, the US Securities and Exchange Commission (SEC) dropped the legal defense of its climate reporting rule. Since then, the rule has been in limbo. Not quite alive, but not fully dead. This week, the SEC is putting the final nail in the coffin with the “Rescission of Climate-Related Disclosure Rules.”  

In contrast, California – the largest US economy – has moved forward with its climate disclosure mandate, which is broader in scope. The first California reports are due within 100 days.  

Another proposal revealed that the SEC plans to move from quarterly earnings reports for public companies to twice-yearly reporting. While the motive is deregulation, the move could enable climate actions that have longer return timelines. 

With no let-up in sight for the oil and gas crisis, clean-tech investment records continue to be smashed. In April, energy funds saw their largest net inflow of investment capital in more than 5 years. Charles de Boissezon at Société Générale said, “investors are pricing the cost of relying on imported fuels in a world that keeps springing geopolitical surprises,” adding that it was ironic that policy U-turns in the US have “actually been a tailwind.” 

One technology experiencing a surge is heat pumps, which joined EVs in recording record-breaking sales in the first three months of 2026. Sales are up by a third in Germany and by almost a quarter in France, indicating that consumers are looking to mitigate their exposure to energy price increases.  

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