Europe considers swapping its standards for the international version
Carbon tariffs begin in Europe, and the UK will follow
New carbon accounting standards for products are on the way
Nature reporting matures
US climate skepticism at the highest levels
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Five years ago, the International Sustainability Standards Board (ISSB) launched at COP26 in Glasgow. Since then, ISSB has issued two standards - S1 for general sustainability reports and S2 for climate reporting. Adoption of these new standards has grown steadily, with ~36 jurisdictions that have adopted or are moving to adopt ISSB standards.
In the meantime, Europe was developing its own sustainability reporting standards (ESRS). While there are some similarities, there are also some major differences between these schemes. Multinational companies and others have complained that these differences lead to added cost and inefficiency.
None-the-less, Europe steadfastly held on to its own standards…until now.
In a surprise move, the European Commission is considering swapping its homegrown standards (ESRS) for the standards issued by ISSB.
This would be an enormous change in how companies report their sustainability data under the Corporate Sustainability Reporting Directive (CSRD). The biggest and most controversial change is that the ISSB standards are solely focused on financial materiality - referring to the sustainability issues that could substantially move the bottom line.
Europe’s standards used the more stringent “double materiality” test - meaning companies had to report sustainability issues that impact the company’s finances AND the issues that impact people and the planet.
ISSB Chair Emmanuel Faber, speaking at a recent EU Parliament event, offered a compromise approach: “reports written in a way to provide all financially relevant information clearly and not obscured by information that is provided for other users,” which would still “fully respect the double materiality principle.”
In other words, companies would use the ISSB standards to report on financially material issues and could choose to report their other impacts using other established standards from organizations such as the Global Reporting Initiative (GRI).
The move is backed by some German Members of the European Parliament. However, a French business group was skeptical, saying “New, fuzzy notions proposed by the ISSB could make CSRD reports more complicated for all European companies.”
After the massive simplification campaign last year, Ms. Loppata will inherit a delicate balance of ensuring the European standards deliver meaningful, decision-useful information while driving economic competitiveness. With this latest move, the stakes are even higher as thousands of companies are currently preparing their reporting strategies and now have significant uncertainty.
2. European Carbon Tariffs Take Shape
Europe’s carbon border adjustment mechanism (CBAM), the world's first emissions tariff, kicked in its pricing mechanism at the start of this year. Last week, Europe’s Taxation and Customs Union released the first CBAM certificate price for the first quarter. The price for Q1 is €75,36 per metric ton of CO2e (Carbon Dioxide equivalents) based on the average auction prices in the EU Emissions Trading System. In 2026, a new price will be recorded for each quarter, but in 2027, prices will be published weekly.
The UK is following Europe’s lead with new draft regulations for its own CBAM, expected to be applicable starting January 1st, 2027. The UK’s CBAM is designed to be interoperable with Europe's, covering the same products and at a similar cost. The new draft outlines how the UK plans to calculate and verify the embodied emissions of covered products and is open for consultation until May 21 2026.
3. New Standards to Measure Product Carbon Footprints
This week, the International Organization for Standardization (ISO), as part of its new partnership with the GHG Protocol, announced the launch of its working group for product-level GHG accounting standards. The new standard will create a globally consistent method to measure the carbon emissions associated with products and is aimed at enabling the implementation of carbon tariff schemes (CBAMs) around the world. ISO and the GHG Protocol will host a webinar on April 24th to share their progress on the product-level standard and harmonizing carbon accounting standards in general.
In related news, ISO issued an update to its Environmental Management System (EMS) standard (ISO 14001) this week. ISO 14001 is the most widely used EMS standard with more than 670,000 certified organizations worldwide. Recent research has shown that the adoption and use of ISO 14001 are directly linked to improved environmental performance and emissions reductions.
ISO Secretary-General Sergio Mujica said, “The new edition of ISO 14001 is smoother to implement, making it easier for organizations of all sizes to embed environmental management into their strategy, achieve tangible results, and demonstrate real impact.”
4. Nature Reporting Matures
Beyond climate reporting, nature seems to be the next area of focus. As this recent Reuters report shows, pressure is growing on companies to report their nature-related risks.
However, standard setters are still working out the kinks in how companies measure their nature impacts. A new discussion paper from the Taskforce on Nature-related Financial Disclosures (TNFD), the Science-Based Target Network (SBTN), and the Global Reporting Initiative (GRI) explores how these standards integrate nature metrics across assessment, disclosure, transition planning, and target setting.
They are also seeking public input on their proposals for embedding the recently finalized Nature Positive Initiative (NPI) nature metrics. You can provide feedback on the discussion paper by June 4th 2026.
5. Climate Consensus Questioned by US Leadership
US EPA Administrator Lee Zedlin (middle) and Treasury Secretary Scott Bessent (right)
Politicians in high cabinet positions in the Trump Administration have made it clear they do not believe the scientific consensus on climate change.
Environmental Protection Agency administrator Lee Zeldin, who was the keynote at a recent “climate realism” convention, focused his remarks on “energy dominance” and “cutting red tape” rather than environmental protection and public health. Treasury Secretary Scott Bessent, this week at a World Bank meeting, called climate change an “elite belief,” and questioned the scientific consensus of climate change, saying, “We are going through cycles, and I believe that it is very difficult to deconstruct the reasons around why anything changes.”
The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.
Other Notable News:
Corporate Climate Action
SBTi
Sustainability Regulations
Sustainability Research
Energy Transition
Global Weirding’
Notable Podcasts:
In this week’s edition of the Harvard Business Review’s The Climate Rising podcast, the hosts discuss Patagonia’s move into food. They talk to Patagonia Provisions General Manager Paul Lightfoot on the role of regenerative agriculture and sustainability in the new venture from the apparel company and how they want to use it as a testing ground to drive transformation in the food system.
In this week’s Outrage and Optimism podcast, the hosts explore reframing sea-level rise as a health risk more than a physical infrastructure risk. They ask if climate policy would be different if we reframed sea-level rise as a food insecurity, disease, or displacement issue.
