August 2025 — EU Circular Economy Act, Singapore delays implementation of climate reporting requirements, UK draft transition finance guidelines

Regulation is shaping the sustainability agenda and changing the way companies do business in different jurisdictions, but keeping pace with constant regulatory updates has become a mammoth task for businesses and investors. In this recurring series, S&P Global Sustainable1 presents key developments to sustainability regulations and standards from around the world.

In this month's update, we look at the EU’s proposed Circular Economy Act, Singapore’s delay in implementing climate reporting requirements and the UK’s draft transition finance guidelines.

INTERNATIONAL    EUROPE   ASIA-PACIFIC

INTERNATIONAL

ISSB publishes guidance on disclosing future sustainability-related financial impacts

The International Sustainability Standards Board (ISSB) on Aug. 18 published guidance for companies on how to disclose short, medium and long-term anticipated financial effects of sustainability-related risks and opportunities under its two sustainability-related reporting standards. It explains how companies are expected to consider sustainability-related risks and opportunities in their financial planning, such as future investments in energy-efficient equipment. Under the standards, companies are expected to report historical, current or forward-looking information available at the time of reporting, including forecasts of future conditions, without “undue cost or effort,” the ISSB said. The guidance also asks firms approach disclosure in a way that is “commensurate with the skills, capabilities and resources available to the company.” That would ensure that reporting requirements are proportionate to a company’s circumstances and enable companies to develop the necessary skills to improve disclosures over time, the ISSB said.

EUROPE

European Commission launches consultation on Circular Economy Act

The European Commission on Aug. 1 launched a consultation and a call for evidence on its proposed Circular Economy Act, designed to promote more sustainable production, circular economy business models and decarbonization. The act is due to be adopted in 2026 and would establish a single market for secondary raw materials, increase the supply of high-quality recycled materials and stimulate demand for these materials in the EU, the Commission said. The legislation will seek to ensure collection and recycling of electronic waste;  less than 40% of electronic waste is recycled currently, the Commission said in a call for evidence. It will also aim to simplify, digitalize and expand extended producer responsibility schemes and mandate criteria for the public procurement of circular goods. A feedback period is open until Nov. 6.

UK financial regulator to simplify sustainable reporting for asset managers and insurers

The UK Financial Conduct Authority (FCA) on Aug. 6 announced plans to streamline and enhance its sustainability reporting framework for asset managers, insurers and pension providers following a review of climate disclosure rules that were finalized in 2021. The rules require firms to disclose climate-related information in line with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. The review showed that some disclosures “may be too complex” for retail investors, the FCA said. In addition, firms found it challenging to provide quantitative data to support forward-looking disclosures, such as scenario analysis, but were generally able to report on backward-looking data, the FCA said. The TCFD has since been absorbed into the ISSB, and firms have also asked for clarity on the future of the UK’s climate disclosure rules, the FCA said. As a result of the feedback, the regulator said it would simplify disclosure requirements, promote alignment of its rules with international standards and improve the “decision-usefulness” of reporting, building on the UK’s Sustainable Disclosure Requirements, which would enhance confidence in the market and reduce greenwashing.

EU banking regulator issues “no-action letter” on sustainability rules for banks

The European Banking Authority (EBA) on Aug. 6 issued a “no-action letter” for national banking regulators, requesting them not to enforce disclosure requirements for banks on their environmental, social and governance risks, in light of proposals by the European Commission to simplify sustainability reporting rules. The EBA has also undertaken a consultation on amending its own disclosure requirements but said it would finalize its amendments once EU legislators come to an agreement on the simplification of frameworks such as the EU Taxonomy and the Corporate Sustainability Reporting Directive. Both regulations determine banks’ disclosure requirements. The EBA also published its EBA ESG Dashboard, which evaluates banks’ exposure to climate-related risks. It found a stable risk landscape for European lenders, which the EBA said reflected “the long-term horizon of climate-related risks and the gradual pace of change in banking portfolios.”

UK publishes draft guidelines on transition finance

The Transition Finance Council, launched in February 2025 by the UK government and the City of London Corporation, on Aug. 18 published draft guidelines designed to mobilize transition finance for high-emitting sectors. The guidelines, which will be voluntary, apply across sectors, asset classes and geographies, including emerging markets, the Council said. They focus on financing to companies, rather than projects or activities, as feedback to the Council has shown there are greater flows of global finance at an entity-level than project or activity level, the Council said. They propose a series of principles and factors setting out minimum expectations to help stakeholders define what credible transition finance is. The guidelines can be used in conjunction with standards such as those issued by the ISSB. The Council will incorporate feedback as well as additional asset class-specific content and case studies in a second consultation to be held later in 2025.

ASIA-PACIFIC

Australia opens consultation on guidance for climate-related transition planning 

The Australian Treasury on Aug. 15 opened a consultation aimed at establishing guidelines designed to support companies in their climate-related transition planning. The guidance would encourage companies to align their transition planning with international standards such as the IFRS Transition Planning Taskforce Disclosure Framework. It would outline what policies and regulations companies should consider in their decarbonization and adaptation strategies. It also would set out what metrics and targets companies should use in terms of transition planning and how companies should approach transition planning with regards to their supply chain and other sectors. The consultation ran until Sept. 24. The government aims to publish the guidelines, which are voluntary, by the end of 2025. They are one of the priorities of Australia’s Sustainable Finance Roadmap, published in June 2024, which sets out how the country aims to implement sustainable finance reforms.

Singapore pushes back deadlines for some climate reporting requirements

Singapore's Accounting and Corporate Regulatory Authority and Singapore Exchange Regulation on Aug. 25 announced a delay in implementing some climate reporting requirements for some companies due to an “uncertain global economic landscape” and to give smaller companies more time to prepare for climate disclosures. Companies listed on the Straits Times Index (STI), Singapore’s blue-chip index, will continue to report on climate-related disclosures as of financial year 2025, while other listed companies with a market capitalization of at least S$1 billion will report as of financial year 2028 instead of financial year 2025, and listed companies with a market capitalization of less than S$1 billion will report as of financial year 2030. Reporting on Scope 3 emissions, which are those that occur up and down a company’s value chain, remains mandatory for STI constituents as of financial year 2026 but becomes voluntary for other listed companies. All listed companies will continue to report Scope 1 emissions, which come from direct operations, and Scope 2 emissions, which are indirect emissions primarily derived from purchased energy, as of Jan. 1, 2025. External limited assurance for Scope 1 and Scope 2 emissions will be mandatory for all listed companies as of financial year 2029 instead of financial year 2027.

China to create national carbon trading market by 2030  

The Chinese government on Aug. 25 announced plans to establish a national carbon trading market based on a cap-and-trade system with both free and paid allocations by 2030. The country currently has eight pilot emission trading systems in place. It also said it would introduce absolute emission caps for industries with relatively stable emissions by 2027. It also plans to complete the creation of a national voluntary greenhouse gas (GHG) emission reduction trading market aligned with international standards by 2030. It also said the national carbon emissions trading market, which currently covers the power generation, steel, cement, and aluminum sectors, would expand to include all high-emitting industries and that a voluntary GHG emission reduction trading market would expand to cover all major sectors by 2027. The country currently has a voluntary market called the China Certified Emission Reductions.