16 Dec, 2025
December 2025 – ISSB nature disclosure plans, EU sustainability reporting simplification, Brazil’s sustainable taxonomy
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 Energy Horizons presents key developments to sustainability regulations and standards from around the world.
In this month's update covering Nov. 1-Dec. 16, we look at the International Sustainability Standards Board’s plans to focus on nature risks, a provisional deal to cement the simplification of the EU’s sustainability reporting rules and Brazil’s adoption of its sustainable finance taxonomy.
INTERNATIONAL
TNFD issues recommendations to improve collection of nature-related data
The Taskforce on Nature-related Financial Disclosures (TNFD) on Nov. 6 released eight recommendations for market participants to improve the availability and quality of nature-related data:
- Developing a set of nature data principles to enhance data quality.
- Creating a set of metadata standards to accompany the principles.
- Harmonizing licensing and usage agreements to reduce time and cost for market participants in accessing nature data.
- Creating a Nature Data Public Facility (NDPF) to provide open access to nature data.
- Establishing mechanisms for companies to provide their own nature data to the NDPF.
- Forming a new international institution, a Nature Data Trust, to generate additional funding for data collection and operating the NDPF.
- Creating a nature data measurement protocol to provide market participants with common measurement methodologies for a core set of nature-related dependency and impact metrics.
- Developing a universal data collection and sharing protocol to streamline the sharing of company data on nature-related impacts and dependencies across value chains.
The TNFD said it will work with partners to establish the creation of the Nature Data Trust and to launch the NDPF.
ISSB plans to develop nature-related guidance, disclosure standards
The International Sustainability Standards Board (ISSB) on Nov. 7 announced it will focus on nature-related risks and opportunities, drawing on the work of the TNFD to create new standards like its general sustainability standard and its climate disclosures standard, IFRS S1 and IFRS S2. On the same day, the TNFD said it planned to complete all technical work in progress, including the development of additional sector guidance, by the third quarter of 2026. The ISSB said it will agree on its approach to nature-related disclosures in the coming months. It will decide whether to develop new thematic or industry-based standards, amend existing standards or to develop new guidance. The decision will be subject to a public consultation. The ISSB said it expects to publish a draft of nature-related disclosure requirements by the UN’s COP17biodiversity conference in October 2026.
EUROPE
EU legislators strike deal on simplifying sustainability reporting rules
European Parliament and EU member state negotiators on Dec. 9 agreed to reduce sustainability reporting and due diligence requirements for companies as part of the European Commission’s simplification effort. Under the informal agreement, reporting under the Corporate Sustainability Reporting Directive (CSRD), which requires firms to disclose standardized environmental, social and governance information, would apply to companies with more than 1,000 employees and net annual revenue of more than €450 million. The European Commission’s initial proposal was to raise the minimum employee count to 1,000 from 250 but maintain the revenue threshold at €50 million. Sector-specific reporting would become voluntary. They also agreed to raise the overall reporting threshold for companies subject to the Corporate Sustainability Due Diligence Directive (CSDDD), which sets a due diligence duty for companies to prevent adverse impacts on human rights and the environment across their supply chains, to 5,000 employees and €1.5 billion in net annual revenue. As originally passed, CSDDD sets the threshold at 1,000 employees and net global revenues of €450 million.
EU banking regulator finalizes guidelines on environmental scenario analysis
The European Banking Authority on Nov. 5 published its final guidelines on how banks should use environmental scenario analysis to help them manage environmental risks, including climate-related risks. The guidelines are designed to complement ones issued in January 2025 on how banks should manage environmental, social and governance risks. They are based on EU rules on capital requirements and guide banks in integrating environmental risks into their stress-testing frameworks so that they can assess the short-term financial impacts of environmental risks and ensure adequate capital and liquidity levels. The guidelines also aim to help banks in developing resilience analysis so they can evaluate how medium- to long-term environmental risks impact their business models, strategies and risk profiles. The guidelines will apply from Jan. 1, 2027.
EU lawmakers reach agreement on methodology for transport emissions
The European Parliament and Council of the EU, made up of government ministers of the 27 Eu member states, on Nov. 5 reached a provisional agreement on a single EU methodology for calculating greenhouse gas (GHG) emissions from transport services. The methodology is based on an ISO global standard, both for freight and passenger transport services. The standard establishes global common rules for transport services and emission principles, which consider all GHG emissions generated during the entire process of fuel production, from extraction to its use by transport services, the Council said. The new rules do not oblige transportation companies to report GHG emissions, but should they decide to do so, they will need to use the methodology provided. The Council and Parliament still need to approve the preliminary agreement. The new rules would apply four and a half years after its publication and entry into force.
European Commission proposes changes to sustainable finance product regulation
The European Commission on Nov. 20 proposed amendments to the EU’s Sustainable Finance Disclosure Regulation (SFDR), which requires fund managers to disclose sustainability-related risks in their portfolios. The proposals would remove the requirement for financial market participants to publish online what they consider to be the principal adverse impacts of their investment decisions on sustainability factors. The proposals would also significantly reduce product-level disclosures. They also aim to simplify the categorization system for financial products that make claims related to environmental, social and governance (ESG) issues or topics. The categorization system would include a sustainable category for products contributing to sustainability goals; a transition category for products channeling investments toward companies and/or projects that are not yet sustainable; and an ESG basics category for products that integrate ESG investment approaches but do not meet the criteria of two other categories. The new system would replace disclosures required under Article 8 and Article 9 of the SFDR. Those requirements had resulted in “significant uncertainty and issues of mis-selling and misuse of disclosures as labels,” the Commission said. The proposed amendments are subject to approval by EU government ministers and the European Parliament.
European legislators reach agreement on deforestation law
The European Parliament and the Council of the EU on Dec. 4 reached an agreement on the European Commission’s proposals to amend the EU Deforestation Regulation (EUDR), which aims to ensure that key goods placed on the EU market will not contribute to deforestation and forest degradation. Under the provisional agreement, the regulation will apply to large and medium-sized companies as of Dec. 30, 2026, instead of Dec. 30, 2025. There will also be a year delay in application for micro and small operators, who will be subject to the law as of June 30, 2027. Small companies will be required to submit a simple, one-time declaration in the EU Deforestation Regulation IT system instead of regular submissions. Downstream operators and traders will no longer be obliged to submit due diligence statements, with reporting obligations focusing on operators first placing the products on the market. Parliament and the Council must formally accept the amendments before they can come into force.
UK regulator issues sustainability reporting assurance standard
The UK Financial Reporting Council (FRC), which regulates auditors, accountants and actuaries, on Nov. 12 issued a sustainability reporting assurance standard for UK companies, investors and assurance providers. The International Standard on Sustainability Assurance (UK) 5000 is based on a global benchmark standard for sustainability assurance, developed by the International Auditing and Assurance Standards Board, the FRC said. It sets out requirements for conducting sustainability assurance and is applicable to both limited and reasonable assurance. UK assurance providers can use the standard on a voluntary basis. The FRC said the standard would establish a “consistent framework” for sustainability assurance in the UK. The move comes as the UK is developing sustainability disclosure standards based on the ISSB’s two standards.
UNITED STATES AND CANADA
California proposes reporting deadline for emissions disclosure law
California Air Resources Board (CARB) on Nov. 18 proposed a reporting deadline of Aug. 26, 2026, for companies reporting under SB-253, the Climate Corporate Data Accountability Act. The law requires public and private US companies that do business in the state and have annual revenues exceeding $1 billion to disclose their Scope 1 and Scope 2 emissions, or the emissions associated with their operations and with their purchased energy.. It also said companies will not be required to provide independent third-party assurance for their Scope 1 and Scope 2 emissions at a limited-assurance level for 2026 reporting. CARB also said companies would not be required to report in 2026 using a draft template published in October. Businesses operating in the state with more than $500 million in revenue are also subject to a climate-related financial risk rule as of Jan. 1, 2026, but implementation has been put on hold following a court injunction. An injunction was denied for SB-253.
LATIN AMERICA AND THE CARIBBEAN
Brazil adopts law on sustainable finance taxonomy
Brazil on Nov. 3 adopted a law on the creation of sustainable finance taxonomy ahead of COP30, the annual UN climate conference, which was held in Brazil. The taxonomy uses technical and scientific criteria to define a sustainable project or asset and sets goals on climate mitigation and adaption, as well as gender and racial equity. The Brazilian government said the taxonomy will guide companies on reporting and monitoring their sustainability information. To meet the taxonomy’s criteria, it said companies will have to adopt low-carbon technologies and promote racial and gender equity throughout their value chains. Taxonomies have been created in many jurisdictions around the world to drive investment into sustainable economic activities. Brazil proposed during COP30 a super taxonomy, which would aim to improve comparability between taxonomies in different jurisdictions.
ASIA PACIFIC
Japan’s securities regulator proposes mandating sustainability disclosures
Japan’s Financial Services Agency on Nov. 26 proposed mandating sustainability-related disclosures by listed companies under amendments to existing regulation on corporate reporting. A request for comment is open until Dec. 26. Companies would be required to publish sustainability reports based on the Sustainability Standards Board of Japan (SSBJ)’s three disclosure standards, which are aligned with the ISSB standards. Under the SSBJ’s requirements, companies with market capitalization of more than 3 trillion yen listed on the Tokyo Stock Exchange’s Prime Market would be required to start publishing sustainability reports for the fiscal year ending March 2027. Companies with market capitalization of between 1 trillion and 3 trillion yen would be required to begin publishing reports for the fiscal year ending March 2028, and those with a market capitalization of between 500 million and 1 trillion yen would begin for fiscal year 2029.
This piece was published by S&P Global Sustainable1 and not by S&P Global Ratings, which is a separately managed division of S&P Global.
This list is not exhaustive, and information is current as of the publication date. If there are additional significant regulatory developments we should cover going forward, please reach out to Jennifer Laidlaw at jennifer.laidlaw@spglobal.com. We welcome feedback.