ESG Corner- February 2025

27, February 2025

IN THE NEWS

This section focuses on key developments globally, in the US, India, and the Middle East. It dissects the most recent news and analyzes its potential to influence regional landscapes, businesses, and consumers. Uniqus provides insights into how these developments may shape current market dynamics and set the stage for future opportunities and challenges.

Global

1. IAASB and IESBA Release New Standards and Guidance Aimed at Improving Sustainability Reporting and Assurance Practices

The International Auditing and Assurance Standards Board (IASB) and International Ethics Standards Board for Accountants (IESBA) have introduced new global standards and guidance to improve sustainability reporting and assurance practices. The new standards establish universal guidelines for assurance and ethics, which can be applied to sustainability information prepared under a variety of suitable sustainability reporting frameworks. In addition to providing a unified global approach for trustworthy sustainability information, these new and revised standards assist with tackling challenges like fraud, greenwashing and non-compliance with laws and regulations. The guidance will assist organizations in meeting the growing demand for comprehensive and reliable sustainability information which aligns with global efforts to enhance the quality of reporting on ESG issues, ultimately strengthening the overall integrity and impact of sustainability practices. The new standards, ISSA 5000 for assurance engagements and IESSA for ethical practices, will come into effect starting December 15, 2026. To help with the transition, the IAASB and IESBA will provide resources like webinars, guidance materials, and feedback channels to facilitate a seamless implementation process.

2. IFRS Guidance for Disclosing Climate- Related Information

The IFRS Foundation has released a new guide to assist companies implementing the ISSB standards, focusing initially on climate-related disclosures in accordance with the IFRS S2 standard. The guidance is designed to help organizations apply the ISSB standards (IFRS S1 and S2), introduced in 2023, to report on climate risks and opportunities. More than one dozen jurisdictions around the world have adopted the standards on a voluntary or mandatory basis. The ISSB introduced “reliefs” when creating the standards, allowing companies to focus on a specific area at a time. The released guidance focuses on this first “relief” , the climate-first transition relief, as investors have expressed a great amount of interest in receiving disclosures regarding climaterelated risks and opportunities. This allows companies the opportunity to focus primarily on climate-related information, allowing additional time to follow with other sustainability topics. The released guidance addresses materiality considerations, metrics, target disclosures, and relevant technical factors, such as timing and location of reports. While the publication supports companies in implementing the standards, it also supports investors seeking valuable information needed to evaluate climate-related risks. As a result of recent stakeholder feedback, the ISSB has proposed new amendments to the IFRS S2 standard which include scaling back disclosures of Scope 3 Category 15 GHG emissions to financed emissions.

3. European Commission Unveils Competitiveness Compass Plan

The EU’s new “Competitiveness Compass” roadmap outlines measures to simplify sustainability reporting, enhance technological leadership, and drive the EU’s productivity forward by concentrating on crucial topics such as innovation and decarbonization. The Compass outlines thirty-eight measures that are to be completed over the next two years. One of the first initiatives is an Omnibus package to streamline and simplify regulations like the CSRD, CSDDD, and the EU Taxonomy. One of the measures in the Omnibus package is targeted at smaller businesses, with proposed goals of reducing reporting burdens by 25% for all companies, and 35% for small-and-medium enterprises. The roadmap also sets out to create a new definition for small mid-cap categories, lessening exposure to complex and extensive reporting and minimizing the impact on supply chains. The Competitiveness Compass plan is also intended to address the EU’s Clean Industrial Deal, the proposal of an Industrial Decarbonization Accelerator Act and a Circular Economy Act.

4. The Taskforce on Nature-related Financial Disclosures

The Taskforce on Nature-related Financial Disclosures (TNFD) continues to receive market feedback on its sector- specific guidance for managing and reporting on nature-related issues. The TNFD recently released a second round of sector specific guidance aimed at supporting companies globally. The TNFD is in the process of evaluating the commentary submitted on the draft guidance and making amendments before submitting the final document. The guidance is aimed at providing industries with more information on reporting requirements specific to their company, eliminating uncertainties and questions by tailoring the information specific to each industry.

5. Science Based Targets initiative (SBTi)

The SBTi previously announced revisions would be made to its Corporate Net Zero Standard. A draft was expected to be released for consultation in 2024, however the organization has stated the first public consultation would now be scheduled no earlier than March 2025. There is also expected to be a second consultation at a later date. New Expert Working Groups and two rounds of consultation highlight SBTi’s commitment to ensuring adequate feedback from various stakeholders. The SBTi’s delays and revisions to its Corporate Net Zero Standard highlight its commitment to ensuring that requirements set out in the Standard are “effective and actionable, without compromising on ambition, ” ensuring that companies continue to set targets.

Uniqus’ POV

The EU has recently released several guidance documents aimed at improving transparency, streamlining compliance, and advancing corporate sustainability efforts. The IAASB and IESBA have introduced global standards to enhance sustainability reporting, focusing on assurance and ethical considerations. The IFRS has issued guidance for companies prioritizing climate-related disclosures aligned with ISSB standards. The EU’s “Competitiveness Compass” aims to simplify sustainability reporting and support green industry initiatives by reducing regulatory burdens and fostering innovation. The TNFD and SBTi also continue to make amendments and revisions based on stakeholder commentary and feedback.

As reporting timelines approach and companies begin to gather data to ensure preparedness with reporting requirements, the EU continues to receive pushback. Although certain requirements may continue to evolve, companies should proactively assess their readiness to meet these regulatory objectives and develop a strategy to ensure preparedness.

US

1. Climate Disclosure Bills Reintroduced in New York

New York has reintroduced climate disclosure bills which would require large businesses to report on greenhouse gas emissions and climate risks, resembling the California Climate Laws introduced in 2023. Bill 3456, The Climate Corporate Data Accountability Act, mandates reporting on Scope 1 and 2 greenhouse gas emissions starting in 2027, covering emissions from the prior fiscal year, and Scope 3 emissions to be reported the following year. The Bill states that Scope 1 and 2 emissions require limited assurance in the first reporting period, with reasonable assurance beginning in 2031. Additionally, a bill requiring climate-related financial risk reporting was introduced, aligning with global frameworks like the TCFD. Bill 3697 states that by January 1, 2028, and every two years after that, “covered entities, ” meaning “any business entity formed under U.S. law with total annual revenues exceeding USD 500 million in its prior fiscal year and that does business in New York, ” is required to disclose a climate-related financial risk report. While the climate bills are in the early stages, they are intended to avoid duplicative efforts by aligning with other reporting requirements such as those introduced by the IFRS.

2. U.S. State-Led Commitment to Paris Agreement Goals

Following the recent withdrawal of the United States from the Paris Agreement, the US Climate Alliance, a group of twenty-four US states, submitted a letter to the UN Climate Chance Executive Secretary, confirming their commitment to the Paris Agreement goals to limit global warming and reduce greenhouse gas emissions. The Paris Agreement’s primary objective is to curb the increase in global temperature to below 2 degrees Celsius above preindustrial levels, and ideally to below 1.5 degrees. Governors from the twenty-four states expressed their dedication to achieving targets to reduce GHG emissions at least 50% – 52% by 2030, on a 2005 basis, and by 61% – 66% by 2035.

3. Investment Stewardship Policy Updates by Large Asset Managers

Two of the world’s largest asset managers, BlackRock and Vanguard, have recently made changes to voting policies and engagement priorities with respect to governance, compensation, sustainability, and shareholder engagement, effective January 2025.

Uniqus’ POV

Amid shifting federal policies, the US is demonstrating state- led climate action. After California’s introduction of climate laws in 2023, New York has recently introduced its own climate disclosure bills, closely aligned with those in California. While New York’s climate bills are centered around reporting Scope 1, 2, and 3 emissions, they take into consideration global frameworks to eliminate duplicative efforts. By aligning with frameworks and organizations such as TCFD the IFRS’s ISSB standards, companies can begin to prepare for compliance with climate disclosure regulations in California and New York. Furthermore, following the US’s withdrawal from the UN’s Paris Agreement, a number of states have announced their continued commitment to meeting emissions reduction targets outlined in the Agreement.

Similar to amendments and refinements being made to global regulations, revised voting principles by large institutional investors in the US highlight a nuanced approach to corporate governance that incorporates flexibility and adaptability. As the SEC’s recent policies shift power from investors to corporate boards, these measures make it more challenging for shareholders to propose resolutions on ESG issues. Therefore, asset managers like Vanguard and BlackRock are cautiously updating their approaches to engagement with investee companies on environmental, social, and governance topics to balance regulatory requirements, shareholder interests, and long-term financial value creation.

India

1. Accelerating Climate Action: India’s Path to Sustainable Growth and Global Leadership

India is at the forefront of global climate action, setting ambitious goals to combat climate change while fostering economic growth. The nation aims to reduce its emission intensity by 45% from 2005 levels by 2030 and increase its non-fossil fuel power capacity to 50%. Despite nearing its capacity target, with non-fossil fuel sources making up about 45% of installed capacity, actual electricity generation from these sources remains low at around 23%, signaling significant opportunities for growth. Vulnerable sectors like agriculture, which significantly contribute to GDP, highlight the critical need for robust climate resilience and adaptation strategies. To bridge the gap between current achievements and necessary climate goals, India is pushing for stronger Nationally Determined Contributions (NDCs) and strategic investments, particularly in sustainable agriculture and circular economy initiatives. This dual focus not only aims to mitigate environmental impacts but also to secure long-term economic stability, making India a beacon for other developing countries in the climate crisis battle.

Uniqus’ POV

The urgency and complexity of the climate crisis require not just national commitment but also a global collaborative effort. India’s steps towards significant climate action serve as a model for other developing nations, balancing economic growth with environmental sustainability. However, the disparity between current achievement and the targets set by the Paris Agreement suggests a need for more aggressive policy enforcement and innovative financing solutions. The integration of private equity in sectors like waste management and renewable energy can catalyze these transitions. As we move forward, fostering robust public-private partnerships will be pivotal in scaling up efforts and achieving more comprehensive and sustainable outcomes. These actions are not just beneficial for the climate but also offer lucrative opportunities for ESG-focused investors looking to contribute to meaningful, impactful change.

2. Financing the Future: Navigating India’s Renewable Energy Challenges in the Wake of Global Banking Withdrawals

India’s ambitious renewable energy targets face significant financial hurdles following the withdrawal of key global banks from the Net-Zero Banking Alliance (NZBA). This retreat threatens the sourcing of approximately 40% of the financial backing required to achieve India’s goal of mobilizing USD 1 trillion by 2030 for renewable projects. Prompted by rising legal and political challenges and greenwashing accusations, this banking exodus poses a critical threat to India’s objectives to install 500GW of non-fossil fuel power by 2030 and to reach net-zero emissions by 2070. With domestic banks historically reticent to fund renewable ventures— public and private banks have only contributed 1% and 19%, respectively, to renewable financing since 2016—the need for India to cultivate resilient and innovative alternative financing strategies has become more pressing.

Uniqus’ POV

The withdrawal of international financial support places India’s renewable energy sector in a precarious position, risking the delay or cancellation of pivotal projects and potentially undermining the country’s climate commitments. The dependence on these now-dwindling external funds highlights the urgent requirement for India to diversify its financing approaches. It is crucial for India to tap into alternative financial instruments such as green bonds, and to seek funds from international bodies like the World Bank and the Asian Development Bank. Simultaneously, there is a substantial need to incentivize domestic financial institutions and attract private investment to fill the gap left by the exiting banks. By reinforcing financial policies and enhancing domestic funding capabilities, India can take steps to not only meet its ambitious renewable energy goals but also strengthen its role as a resilient leader in the global transition to sustainable energy. This shift towards more reliable and controlled financial strategies will prove essential in maintaining momentum towards India’s extensive climate objectives.

3. Himachal govt forms carbon credit panel to explore additional revenue stream

The Himachal Pradesh government has established a Carbon Credit Committee, chaired by the Additional Chief Secretary of Forests, to delve into the carbon market and generate new revenue streams for the state. This ten- member committee will assess both international and domestic carbon markets, aiming to tailor carbon credit strategies specifically for Himachal Pradesh. Announced by Chief Minister Sukhvinder Singh Sukhu, the committee’s mandate includes identifying potential projects, integrating carbon credits into state programs, and forming guidelines for project developers and traders.

Uniqus’ POV

The new Carbon Credit Committee signifies Himachal Pradesh’s proactive approach to leveraging carbon markets for economic and environmental benefits. This strategic initiative not only aims to boost state revenue through carbon credits but also positions the state as a leader in sustainable environmental management. By aligning its development goals with environmental conservation, Himachal Pradesh sets a benchmark for other states, illustrating how economic growth and environmental stewardship can coexist effectively.

4. Budget 2025’s role in strengthening governance and boosting climate- resilient development in India

India is actively addressing the challenges of sustainable development and climate resilience as it progresses towards its vision of ‘Vikasit Bharat’ by 2025. The government is enhancing governance and building robust infrastructure to shield ecosystems and communities from climatic threats. With the ambitious goal to mobilize USD 2.5 trillion by 2030 in accordance with the Paris Agreement targets, India is focusing on developing climate-resilient infrastructure and leveraging cutting- edge technologies in the agriculture and energy sectors. These efforts are bolstered by substantial international financial support, including from the Green Climate Fund, to help reduce the nation’s carbon footprint and enhance its climate resilience.

Uniqus’ POV

India’s commitment to sustainable growth and climate adaptability is clearly articulated in its 2025 budgetary allocations and policies. By fortifying institutional frameworks and securing the necessary funding, the country is proactively transforming its approach to tackle climate change through adaptation and mitigation. This strategy not only aligns with global sustainability and climate commitments but also cements India’s position as a leader in integrating economic development with environmental stewardship. The detailed and proactive climate action plans offer valuable insights and opportunities for ESG investors, showcasing India as a model for other nations striving to harmonize economic aspirations with ecological sustainability.

5. Upholding Integrity: SEBI’s Focus on Greenwashing

Concerns about greenwashing in Indian corporations were highlighted at the FICCI ESG Summit. Misleading disclosures in Business Responsibility and Sustainability Reporting (BRSR) reveal a gap between claimed and actual environmental impact, especially in the manufacturing and automotive sectors. SEBI issued a circular on “Dos and don’ts relating to green debt securities to avoid occurrences of greenwashing” in February 2023. Issuers of green debt securities must ensure that funds are used only for projects that meet the regulatory definition of “green” and continuously monitor their environmental impact. They must avoid deceptive terminology, assess negative externalities, prevent misrepresentation of certifications, and report any deviations from planned fund use, with potential early redemption if necessary.

Middle East

1. Oman’s new renewable energy policy to drive new investments in energy storage

Oman’s Ministry of Energy and Minerals introduced a new policy framework known as the “Electricity Self- Generation, Direct Sales, and Wheeling Policy, ” which is designed to promote the growth of integrated renewable energy capacity, including generation, transmission, and crucially, energy storage. The new policy framework aims to address the energy challenges of Oman’s energy infrastructure by enabling the deployment of economically feasible battery storage infrastructure. The policy defines electricity storage as the conversion of electrical energy into another form for storage and later reconversion for direct consumption or grid delivery. The policy outlines two categories of developers who stand to benefit from these initiatives—the selfgenerators who invest in renewable energy capacity for captive consumption, and the developers who are eligible to invest in renewable energy capacity

Uniqus’ POV

The Electricity Self-Generation, Direct Sales, and Wheeling Policy has immense potential to improve energy efficiency, diversify energy sources, and ensure grid reliability in the Sultanate, through a collaborative approach involving the government, private sector and individuals in the energy sector. The policy is a transformative step in Oman’s energy sector, providing a comprehensive regulatory framework that supports the implementation of self-generation and direct sale projects. There has been an absence of energy storage technologies in Oman, notably due to the high costs involved, however, the new policy seeks to establish the deployment of economically feasible battery storage infrastructure, and for costs to be recouped from large consumers benefitting from such investments. The new policy is expected to contribute to achieving an ideal mix of energy resources to sustain Oman’s energy requirements over the next 15 years.

2. GCC countries pledge USD 100 billion for renewable energy to reduce emissions by 20% by 2030

The Gulf Cooperation Council (GCC) countries have announced a historic USD 100 billion investment in renewable energy by 2030. This move is part of a broader strategy to transition to clean energy and reduce carbon emissions. The investment will stimulate the acceptance of clean energy, including renewables, nuclear energy and hydrogen, and align with international climate agreements stemming from convenings such as COP summits. It is important for GCC countries to take active measures in climate mitigation strategies, policy changes, and technologies needed to accelerate the region’s energy transition.

Uniqus’ POV

The GCC region accounts for 23.2% of total global oil production and contributes 1.5 billion tonnes of CO2 annually, accounting for around 4% of global emissions. However, these countries are facing increasing climate risks such as water scarcity and rising sea levels, with temperatures expected to rise by 2.5°C by the end of the century. The USD 100 billion investment for renewable energy will help the region transition from oil dependency. The investment will go a long way in actualizing climate benefits. This endeavor serves as a call to action for other regions to join and increase their fight against climate change through funding and resource facilitation.

3. Integrated Transport Centre (Abu Dhabi Mobility) publishes handbook on Environmental, Social, and Governance Maturity in maritime sector

Integrated Transport Centre (Abu Dhabi Mobility), part of the Department of Municipalities and Transport (DMT), has published its inaugural reporting handbook on Environmental, Social, and Governance (ESG) Maturity in the maritime sector, which is set to become an essential guide for sustainability within the maritime ecosystem. The handbook introduces an ESG framework for the maritime sector designed to provide guidance on embedding sustainability into maritime operations to aid the sector on its sustainability journey by aligning with both national and international sustainability objectives. At the core of the publication lies a comprehensive overview of ESG maturity within Abu Dhabi’s maritime sector, including a detailed evaluation of the sector’s current ESG practices and performance, strategies for integrating sustainability into daily maritime operations, and examples of initiatives that align with broader sustainability goals.

Uniqus’ POV

Abu Dhabi’s maritime sector is navigating towards a sustainable future. This handbook underscores the sector’s commitment to fostering a fundamental practice of sustainable practices and processes. Adherence to this handbook will enable companies in the maritime sector to produce transparent and credible reports on their environmental, social, and sustainability performance, thereby strengthening transparency, building stakeholder trust, and advancing efforts to protect the marine environment for current and future generations. All relevant stakeholders in the maritime sector are encouraged to join in this journey, leveraging this handbook as a guide to elevate the collective ESG maturity of the sector.

IN-DEPTH ANALYSIS

This section delves deep into a significant ESG development, offering comprehensive insights and a nuanced perspective. We break down the critical facets of this development, analyzing its implications for businesses, investors, and regulators. Our in-depth analysis clarifies the potential impact on global markets and how this change may influence strategic decisions across sectors. Join us as we explore this development, shedding light on the opportunities and challenges in the evolving ESG landscape.

Decarbonizing the Agrifood System: A Strategic Imperative for Sustainable Growth

October marked the close of this year’s CDP disclosure cycle for corporate environmental submissions – with a scoring deadline of 9 October 2024 and the reporting window closing on 30 October 2024. The latest CDP disclosure cycle brought many significant changes to the reporting process, such as CDP’s questionnaire format, submission portal, and scoring methodology – although the revamped reporting process also challenged many companies. For example, respondents were confused about how to best gather and submit information against the novel questionnaire format and scoring methodology. CDP had also extended its scoring deadline multiple times, as respondents complained of frequent and last-minute technical issues with the submission portal.

Uniqus helped many clients report to the CDP this year, guiding them through these hurdles. Despite the obstacles reporting companies face during this year’s reporting cycle, Uniqus expects CDP’s changes to enhance the quality of environmental-related financial disclosures provided by businesses moving forward.

In Conversations with ESG Pioneers

Zee Entertainment Enterprises Limited (ZEEL) is a leading content company offering entertainment content to diverse audiences. With a presence in over 190 countries and a reach of more than 1.3 billion people around the globe, ZEE is among the largest global Media and Entertainment (M&E) Companies across genres, languages, and integrated content platforms.

Mr. Singh has 22 years of diverse experience spanning across global investor relations, ESG, and broad- ranging business operating roles. He has worked with Zee Entertainment, Flipkart, Tata Communications, and Firstsource Solutions in various leadership roles. Currently at Zee Entertainment, he is responsible for leading company’s ESG agenda and investor relations, spearheading the engagement with the investor and analyst community, proxy firms and rating agencies. He has completed his MBA from the Indian Institute of Technology (IIT) Madras in 2003.

REGULATORY WATCH

Regulation around ESG continues to evolve rapidly. This section summarizes some of the latest regulatory developments across critical global markets, including the US, EU, UK, India, and the Middle East. Our analysis captures the nature of the legislative changes or updates and our high-level assessment of broader implications on business practices and compliance strategies.

CSRD UPDATES

In recent weeks, significant developments have unfolded regarding the European Union’s Corporate Sustainability Reporting Directive (CSRD), a key regulatory framework to enhance corporate transparency in sustainability. These updates have far-reaching implications for EU-based organizations and international companies with regional operations in the EU.

1. European Commission’s Proposal to Simplify Sustainability Reporting:

On February 26, 2025, the European Commission has introduced a set of measures designed to streamline sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD). This initiative aligns with the EU’s broader goal of reducing administrative complexity while upholding corporate accountability in sustainability practices. As part of these efforts, the Commission has proposed several key revisions to the CSRD to ease compliance requirements for businesses without compromising transparency or reporting integrity.

2. Diverging Opinions Among EU Member States

The proposed changes have sparked differing responses among EU member states, with nations divided over the extent of the revisions:

a. Spain and Italy: Both nations advocate for maintaining robust environmental reporting regulations, though with differing approaches. Spain underscores the need to uphold corporate accountability in sustainability efforts, emphasizing the importance of transparent disclosures. Italy, while supporting strong reporting frameworks, has proposed extending reporting timelines and simplifying compliance requirements for small and mediumsized enterprises (SMEs) to reduce administrative burdens.

b. Germany and France: These countries favor more extensive modifications to the directive. Germany has recommended a two-year postponement of Corporate Sustainability Reporting Directive (CSRD) requirements, a move that would impact approximately 13,000 German companies. France, on the other hand, has proposed an indefinite delay for the due diligence component of the directive and a two-year deferral for CSRD compliance, reflecting broader concerns over regulatory complexity and implementation challenges

3. Reactions from Industry and Environmental Groups

a. Business Community Support: Several industry groups have expressed support for the proposed simplifications, asserting that these revisions will help reduce compliance costs and enhance the competitiveness of European companies in the global market. They argue that a more streamlined approach to reporting will allow businesses to allocate resources more effectively while maintaining compliance with sustainability regulations.

b. Environmental Concerns: Conversely, sustainability advocates have voiced concerns that these amendments could dilute corporate accountability and hinder progress toward the European Union’s climate and sustainability objectives. They caution that easing reporting obligations may reduce transparency and slow the momentum needed to achieve the EU’s long-term environmental and social governance goals.

Authors

Nirav Patel, Partner, ESG Consulting

Suddhwasattwa Mukherje, Partner, ESG Consulting

Dr. Elena Primikiri, Associate Partner, ESG Consulting

Matt Berner, Managing Director, ESG Consulting

Luv Nijhawan, Director, Clients and Markets

Nachiketa Das, Director, ESG Consulting

Sagnik Chakraborty, Manager, ESG Consulting

Tiphaine Delepine, Manager, ESG Consulting

Samuel Aisabokhae, Assistant Manager, ESG Consulting

Deborah Suares, Consultant, ESG Consulting

Rahil Shah, Associate Consultant, ESG Consulting

Ryan Kim, Associate Consultant, ESG Consulting

Kanishk Gomes, Associate Consultant, ESG Consulting

Topics in this article

ESG

Early Impressions

Ind AS 118, Presentation and Disclosure in Financial Statements (Exposure Draft)

Background In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements, aimed at enhancing the way companies communicate through their financial statements, particularly their financial performance through the Statement of Profit or Loss. Globally, IFRS 18...

FASBs’ Proposed Accounting Standard Update (ASU) (Sub-topic 350-40)

Background Under the existing guidance on accounting of cost incurred towards internal use software, FASB’s ASC Subtopic 350-40, illustrates various stages of development i.e. the preliminary project stage, the application development stage, and the post-implementation stage. Whether cost incurred need...

ESG Corner- April 2025

In the news This section focuses on key developments globally, in the US, India, and the Middle East. It dissects the most recent news and analyzes its potential to influence regional landscapes, businesses, and consumers. Uniqus provides insights into how...