Welcome to the February edition of the Sustainability Watch newsletter. This month, we delve into the latest regulatory highlights across North America, the EU, South America, and the APAC region. In North America, we explore the contrasting sustainability regulations in the United States and Canada, including California's Climate Reporting Law and Canada's diversity reporting proposals. The EU's efforts to simplify sustainability reporting and the ongoing debates around ESG regulations are also covered. South America's regulatory landscape remains relatively quiet, with minor developments in Peru and Brazil. Meanwhile, APAC sees significant advancements in renewable energy and green finance, with notable reforms in China and Japan. Stay informed on these critical updates and more in this comprehensive overview of global sustainability initiatives.
Europe
EU’s Platform of Sustainable Finance publishes its Simplifying the EU Taxonomy to Foster Sustainable Finance report that has aimed at reducing corporate reporting burden by mandating OpEx KPIs as voluntary disclosures, introducing simplified Green Asset Ratio, helping SMEs to access sustainable finance, and many more to simplify reporting templates. EU Commission’s European Commission's Work Programme 2025 has set out key strategies, action plans and legislative initiatives that will complement the functioning of CSDDD and CSDR. International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) have collaborated to develop fit for purpose and interoperable global baseline standards namely ISSA 5000 and IESSA. On the other hand, the Financial Conduct Authority of the UK has published its 2025 Adaptation Report to focus on the climate change challenges faced by financial firms and the adjustments needed to manage climate risk.
North America
Regulations and initiatives in North America reflect the contradictions and power struggles inherent in this new geopolitical scenario. In the United States, regulatory developments around sustainability have been divided between executive orders, which typically end regulations that are pro-environment or pro-social, and initiatives undertaken by states not aligned with the current national administration, such as California’s Climate Reporting Law. In Canada, the situation is similarly mixed, with proposals to exempt the financial sector from disclosing financed emissions, while mandating the reporting of diversity at the board and top management levels.
South America
South America has been notably quiet throughout the entire month of February, with no major new regulations or initiatives in the areas of environmental or social issues. However, there have been minor developments, such as a new regulation in Peru and Brazil’s collaboration with Germany on environmental protection through a €25 million agreement. Additionally, controversy arose when the Argentine government used derogatory terminology to describe individuals with disabilities in a resolution published in the nation’s Official Gazette. This slow progress in the region’s socio-environmental regulatory landscape could be attributed to the caution of countries due to the slowdown in sustainability issues in major markets such as the United States and the European Union, as well as the summer holiday period for parliaments in Chile, Argentina, and Colombia.
APAC
Apart from the continuous improvement in renewable energy planning, China and Japan has commenced institutional reforms in other areas of environmental conservation. Japan revised policies on air pollution and waste disposal while China focuses on green finance, including carbon credit trading.
