23 June, 2026
June 2026 — Brazil removes mandatory sustainability reporting requirements, EU proposes bank stress testing for climate risks, European commission consults on due diligence rule
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 May 22 to June 22, we look at Brazil’s decision to remove requirements for mandatory sustainability reporting, the EU banking regulator’s proposal to include climate-related risks in bank stress tests and the European Commission’s consultation on guidelines for its due diligence rule.
INTERNATIONAL
Draft framework for social-related financial disclosures released
The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) on May 26 released its first draft framework to guide businesses and financial institutions in how to report on topics related to inequality, employee well-being and human rights. Under the framework, businesses would be expected to disclose material information about impacts, dependencies, risks and opportunities related to people. They would also have to disclose information on how people-related risks may affect broader social and financial systems. The TISFD said the framework aligns with the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD) and supports convergence with other global standards including those of the International Sustainability Standards Board (ISSB), the Global Reporting Initiative (GRI) and the European Sustainability Reporting Standards (ESRS). A consultation period on the framework runs until July 31. The final version of the framework will be published in 2027.
International standard setter launches transition standard for financial institutions
International standard setter International Organization for Standardization (ISO)on June 4 issued a net-zero transition planning standard for financial institutions designed to support banks, insurers and asset managers in their transition to a carbon-neutral economy. The standard’s requirements and recommendations aim to help financial institutions develop and maintain transition planning objectives in line with the Paris Agreement’s 1.5 degrees C warming limit. The standard also seeks to establish “robust” policies and processes that financial institutions can integrate into their activities, ISO said. It can be applied globally, including by financial institutions in emerging market and developing economies, and recognizes challenges they may face with regards to local regulations and data availability.
EUROPE
UK regulator proposes removing TCFD-related product reporting requirements
The Financial Conduct Authority on June 5 proposed removing product-level reporting requirements for asset managers, life insurers and pension providers based on the TCFD reporting framework. Under current rules, firms must produce product-level reports that include data on carbon metrics and climate scenario analysis. Under the proposed new rules, retail investors would receive relevant information on how material climate risks could affect a product’s financial performance, and institutional clients would be able to request key emissions data from firms, but this would no longer need to be published in full reports. The FCA said the proposals aimed to give investors more clarity on how climate physical risks could affect investment performance, while reducing unnecessary costs to firms. It estimated the proposals could save firms around £20 million annually. A consultation period on the proposals is open until July 13.
Bank of England to include transition-related financial risks into collateral framework
The Bank of England (BoE) on June 11 announced plans to adjust its collateral eligibility framework to include climate-related transition risk. It said it is revising how it calculates “haircuts,” or value discounts, on corporate bonds issued by companies exposed to financial risks related to the transition to a net-zero economy. The BoE said it would apply the haircuts to protect it against financial risks from bond issuers “in relevant sectors” that can be exposed to potential financial risks connected to the net-zero transition. It added that bonds issued by thermal coal mining companies will not be eligible as collateral. The changes will come into effect on Oct. 31, 2026.
European bank regulator to integrate climate-related risks in EU bank stress tests
The European Bank Authority (EBA) on June 11 launched a consultation on its draft templates and methodology for its 2027 EU-wide bank stress test, which will require reporting on climate-related risks for the first time. The EBA said a specific climate module will assess how banks would be affected by certain transition risks over a three-year horizon and physical risks over a one-year period. The module will focus on institutions’ exposures to non-financial corporations and to real estate, reflecting the materiality of these portfolios with regard to transition and flood risks. The EBA said banks would have to apply climate transition and flood scenarios in conjunction with the adverse macro financial scenario of the 2027 stress test. It said the climate assessment will not affect the core stress test results but would mark an important step in embedding climate considerations into prudential supervision. A total of 63 banks from the EU and Norway will participate, representing 75% of the EU banking sector, the EBA said.
European Commission launches consultation on due diligence rule
The European Commission on June 12 launched a consultation on developing implementation guidelines for the Corporate Sustainability Due Diligence Directive, which requires companies to prevent, end or mitigate their adverse impact on human rights and the environment in their operations and throughout their supply chain. The Commission said it plans to issue guidelines that give companies practical information on fulfilling their due diligence obligations, provide information to the relevant authorities in member states on enforcing the directive and explain to stakeholders how to pursue their rights. The guidelines will also apply to companies and other stakeholders in non-EU countries that have supply chains linked to companies subject to the directive, the Commission said. The consultation seeks information on what policies are the most relevant for incorporating due diligence in corporate governance policies, what tools are the most successful in identifying risks and the challenges in assessing negative impacts. The consultation ends July 24.
LATIN AMERICA AND THE CARIBBEAN
Brazil removes requirements for mandatory sustainability reporting
Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), on June 1 published amendments to its securities law removing requirements for listed companies to disclose sustainability-related information on a mandatory basis. Under the amendments, companies that choose to report sustainability information must use Brazil’s reporting standards, which are based on the International Sustainability Standards Board’s two sustainability-related disclosure standards. Companies that choose not to do so must explain why they have not used the standards. Those that do provide sustainability reports are required to do so for a three-year consecutive period. Should a company decide to stop reporting, it must disclose its decision in the fiscal year before it ends reporting. Brazil adopted the standards Jan. 1, 2024, and issued rules on Oct. 29, 2024, to make the standards mandatory from Jan. 1, 2026, with the first sustainability reports due in 2027.
UNITED STATES AND CANADA
US SEC proposes repeal of federal climate disclosure law
The US Securities and Exchange Commission on May 29 proposed rescinding the federal climate disclosure rules that were passed under the Biden administration. While the rules were adopted in March 2024, they were initially held up by lawsuits and did not go into effect. In 2025, the SEC under new leadership announced it would not defend the rules in court. The SEC said the rules are “overly burdensome and costly” and “exceed the scope of the agency's statutory authority.” Removing the rules would restore “a materiality-focused approach to securities regulation,” it added. However, the state of California has two climate disclosure rules, and while a court blocked the climate-related financial risk disclosure rule in November 2025, the rule requiring emissions disclosure is in effect with a reporting deadline of Aug. 10, 2026.
Canada proposes legislation strengthening forced labor ban
The Canadian government on June 12 proposed legislation that would strengthen the country’s import ban on goods produced with forced labor. The country introduced an import ban in 2020 to meet its obligations under the Canada-United States-Mexico Agreement, a free trade agreement, and the proposed act would establish a standalone legislative framework, the government said. The proposed legislation would allow Canada to establish a list of high-risk goods, identified by region, entity, or individual; set requirements for importers of certain high-risk goods to provide enhanced supply chain tracing information to customs authorities; prohibit goods identified as high-risk from import when mandatory information requirements are not met; improve coordination and information-sharing among federal organizations to support enforcement; and create a cost-recovery model when importers are found to have imported goods produced using forced labor.
ASIA-PACIFIC
Cambodia unveils new guidelines for sustainability-related debt issuance
The Securities and Exchange Regulator of Cambodia on May 29 launched new guidelines on issuing sustainability-related debt. The new guidelines build on previous guidance on issuing green bonds published with the Asian Development Bank in 2022. The regulator said the framework will support the development of a high-integrity sustainable investment market and contribute to achieving Cambodia’s Sustainable Development Goals, based on the UN’s 17 Sustainable Development Goals aimed at eliminating poverty, improving health and education, reducing inequality and tackling climate change among other things.
Singapore regulator updates reporting guidance for sustainability-related funds
Singapore’s financial regulator, the Monetary Authority of Singapore (MAS), on June 10 updated disclosure and reporting guidelines for sustainability-related retail funds. Under the updated guidance, the prospectus of a fund should disclose any risks related to its investment strategy. A foreign prospectus must include a supplement summarizing the risks for Singapore-based investors. Fund managers are also required to report to what extent they undertake stakeholder engagement with the companies they invest in and when they would consider divestment. Information on stakeholder engagement should be included on a fund manager’s website or in a fund’s prospectus. The fund manager is expected to update investors on a regular basis, including information about voting records in sustainability-related company resolutions.
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.
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