June 2025 — Australia's taxonomy, UK’s draft sustainability disclosure standards, EU consultation on waste reduction and the circular economy

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 launch of Australia’s sustainable finance taxonomy, the UK’s draft disclosure standards based on those of the International Sustainability Standards Board, and an EU consultation related to regulation overseeing waste reduction and improvements to the circular economy. 

INTERNATIONAL    EUROPE   ASIA PACIFIC    UNITED STATES AND CANADA

INTERNATIONAL

ISSB releases guidance on transition plan disclosures

The IFRS Foundation on June 23 published guidance on how companies should consider transition plans when reporting under IFRS S2, the International Sustainability Standards Board (ISSB)’s climate-related reporting standard. Although IFRS S2 does not require companies to have a transition plan, it does require them to provide material information on climate-related risks and opportunities, including how they are mitigating and adapting to climate-related transition and physical risks. The guidance outlines ways of embedding transition planning into a company’s strategy. It explains that companies should disclose whether they have a strategy for the transition to a low-carbon economy, including adjusting business models to make them more resilient to climate-related physical risks. It also sets out guidance on disclosures about entities’ climate-related transitions, including what metrics and targets to use. And it provides information on how specific sectors should tackle transition planning. For example, it encourages the oil and gas sector to report on its capacity and production of low-carbon products over the short to medium term. 

Basel Committe publishes disclosure framework for climate-related financial risks

The Basel Committee, the primary global standard setter for prudential banking regulation, on June 13 published a framework for the voluntary disclosure of climate-related financial risks. Under the framework, banks can report qualitative information on how they are handling climate-related risks in terms of their governance, strategy and risk management. They should also provide qualitative information on their management of transition,  physical and concentration risks. In terms of transition risks, the disclosures should include banks’ exposures and financed emissions by sector; real estate exposures in the mortgage portfolio by energy efficiency level; and emission intensity per physical output and by sector. Banks would also be required to report on their exposure to physical risks. The disclosures would only be mandatory when required by national legislators at a jurisdictional level. The Basel Committee’s members include 45 central banks and regulators from 28 jurisdictions around the world.

EUROPE

European Commission launches consultation on regulation to reduce waste

The European Commission on June 12 launched a consultation on implementation of its Ecodesign for Sustainable Products Regulation (ESPR) aimed at improving the sustainability of products on the EU market and encouraging their circularity, recycling, durability and energy performance. Under the regulation, businesses are required to disclose information on unsold consumer products that they dispose of. The implementing regulation proposed by the Commission sets out how companies should disclose that information; how the information will be verified; and what products will be subject to the regulation. Companies subject to the Corporate Sustainability Reporting Directive (CSRD) may provide on their website a link to their CSRD report, clearly mentioning that it contains information on discarded unsold consumer products. The consultation closed on July 10. The ESPR prohibits the destruction of unsold apparel, clothing accessories and footwear, but provides for the creation of draft delegated regulation that would allow exemptions for certain products. The Commission on June 30 opened another consultation on the draft delegated regulation  that would allow exemptions from destroying unsold textiles under the ESPR. The exemptions would apply for health and safety reasons; damage to products that cannot be repaired in a cost-effective manner; for products that do not comply with EU or member state legislation; and for counterfeit products, among other things. That consultation runs until Aug. 11.

EU adviser seeks to reduce sustainability reporting data points by more than half

The European Financial Reporting Advisory Group (EFRAG), which serves as technical adviser to the European Commission, on June 20 announced  that it would reduce the number of data points required by the European Sustainability Reporting Standards (ESRS) by more than 50%, as part of a revision requested by the European Commission. The Commission asked EFRAG to revise the standards as part of its omnibus proposal to simplify sustainability regulations, including the CSRD. The ESRS are the standards used by companies subject to the CSRD. EFRAG said it is focusing on six aspects of the reporting standards to meet the omnibus proposal’s goal of reducing the reporting burden on European companies, including simplifying the double materiality assessment, improving the conciseness of sustainability statements and enhancing interoperability with other sustainability reporting standards, among other things. The revisions will be open for public comment until the end of September and will be presented to the Commission by Nov. 30.

UK publishes draft proposals for adoption of global sustainability standards

The UK government on June 25 published draft UK-specific standards based on the ISSB’s two sustainability standards. The proposals are aligned with IFRS S1, which requires the disclosure of sustainability-related financial information, and IFRS S2, the ISSB’s climate standard, but include several differences. Companies subject to the UK standards would have a two-year delay to report all climate-related risks and opportunities, including Scope 3 emissions, instead of the one-year delay under IFRS S2. Companies would also not have to report using the Sustainability Accounting Standards Board’s standards, which form an integral part of the ISSB’s standards for industry-specific disclosures. In addition, the UK draft standards do not set any dates for reporting, with effective dates to be set out in “relevant legislation or regulation.”  

Switzerland puts revision of corporate climate disclosures on hold

Switzerland’s Federal Council on June 25 announced a pause in its revision of rules related to corporate climate disclosure. The Council said  the revision was “broadly welcomed” during the consultation phase, but cited calls for implementation to be paused until the Council had approved ongoing revision of sustainability reporting in Switzerland’s Code of Obligations. The proposed revisions on climate disclosures aimed to expand the number of companies subject to disclosure requirements to 3,500 from 300. They also sought to bring Switzerland’s climate disclosure rules in line with international standards and rules, including the EU’s CSRD, which the European Commission is proposing to amend.  Switzerland’s Federal Council said it would take further steps when amendments to the CSRD are finalized, but by no later than early 2026.

EU supervisory bodies publish draft guidelines on sustainability stress testing

Three European supervisory bodies on June 27 published draft guidelines setting out how banking and insurance regulators should integrate environmental, social and governance risks into financial stress tests for the banking and insurance sectors. The European Securities and Markets Authority, the European Banking Authority and the European Insurance and Occupational Pensions Authority are proposing to harmonize methodologies used by banking and insurance supervisors and create a common framework for developing sustainability-related stress testing standards throughout the EU’s financial system. The draft details guidance on the design, organization and governance of sustainability-related stress testing, including the need for qualified personnel, data collection and management systems that support access to high-quality sustainability-related data and appropriate timelines for scenario analysis. A consultation is open until Sept. 19, 2025. 

ASIA-PACIFIC

India publishes regulatory framework for sustainability-related debt 

The Securities and Exchange Board of India on June 5 published requirements for debt securities that are labeled social bonds, sustainability bonds or sustainability-linked bonds and are listed or proposed to be listed on the stock market. Issuers may only use these labels if projects financed by the debt bond issue are in line with global standards such as the International Capital Market Association Principles or the Climate Bonds Standard, which both have established voluntary guidelines for sustainable bond issuance. India’s framework sets out initial disclosure requirements and post-listing obligations for issuers, who will also have to appoint an independent third-party reviewer for their sustainability-related bond issues. The framework also defines what type of projects social bond funds should be used for, including affordable basic infrastructure such as clean water and sanitation, affordable housing, access to essential services such as health and education, employment, and food security.

Australia launches sustainable finance taxonomy

The Australian Sustainable Finance Institute (ASFI) on June 17 announced the launch of the country’s sustainable finance taxonomy, designed to provide financial institutions and businesses with a framework to assess the sustainability of economic activities and invest in projects that will help reduce emissions and achieve net-zero goals. ASFI said the taxonomy would boost investor confidence in low-emissions investment claims, reduce the risk of greenwashing, and improve the comparability of investment products and sustainability disclosures. ASFI, an industry group that has been working with the Australian government to create the taxonomy, said it would start implementation of the taxonomy through a pilot phase with a group of financial institutions. 

Singapore publishes draft guidance on use of voluntary carbon credits

Singapore’s National Climate Change Secretariat (NCCS), Ministry of Trade and Industry (MTI), and Enterprise Singapore on June 20 released draft guidance aimed at steering companies in using carbon credits in their decarbonization plans as part of the island state’s strategy to promote a high-integrity carbon market. Under the voluntary framework, companies subject to carbon taxes would be able to use carbon credits that comply with Article 6 of the Paris Agreement, which oversees carbon markets, to offset up to 5% of their taxable emissions. The draft guidance would also require companies to disclose the role of carbon credits in their decarbonization strategy as part of Singapore’s climate reporting requirements, which are based on ISSB standards. The draft guidance also aims to boost supply of high-quality Article 6 carbon credits through Singapore’s Carbon Project Development Grant, which provides support for leading project developers to originate early-stage Article-6 carbon projects. A consultation on the draft closed on July 20. 

UNITED STATES AND CANADA

SEC withdraws proposed rules for sustainability-related disclosures

The US Securities and Exchange Commission on June 12 announced its decision to withdraw rules proposed in June 2022 that would have required fund managers to provide extra information about their environmental, social and governance investment practices. The proposed rules aimed to tackle greenwashing, or making an investment product sound more sustainable than it actually is, by creating a comparable and consistent regulatory framework to help investors make informed decisions about their sustainable investments. The SEC also decided to withdraw a proposal made in July  2022 that would have revised rules about the submission and resubmission of shareholder proposals. The SEC said it no longer intended to issue final rules on the proposals and it would submit new rules should it decide to “pursue future regulatory action” in either area. In March 2025, the SEC said it was stepping back from defending climate disclosure rules published in March 2024 in ongoing litigation against the rules, which had been paused shortly after they were finalized to allow legal challenges to proceed.

Canada publishes final guidelines on environmental claims by businesses

Canada’s Competition Bureau on June 5 issued guidelines to help businesses comply with amendments to the country’s Competition Act designed to stop companies from making misleading environmental claims about their products. The amendments became law on June 20, 2024. The guidelines include six principles to ensure compliance with the amendments. Under the principles, companies’ environmental claims about their products should be truthful, and not false or misleading; environmental benefits of a product and performance claims should be adequately and properly tested; comparative environmental claims should be specific about what is being compared; environmental claims should avoid exaggeration; environmental claims should be clear and specific and not vague; and environmental claims about the future should be substantiated and have a clear plan. Penalties for breaching the law can reach up to C$10 million for a first violation, and up to C$15 million for any subsequent violation, or three times the value of the benefit derived from the deceptive conduct, or 3% of the corporation’s annual worldwide gross revenue, the Competition Bureau said.