More than half of insurance supervisors and regulators (58%) that responded to a United Nations Development Programme (UNDP) survey said they have incorporated climate-related risks into their regulatory capital framework, with a further 30% of them planning to do so in the future. However, 84% of respondents have not yet included climate-related transition risks as part of this, although the UNDP noted that this is on the table for some. Respondents took different views about what constituted inclusion of climate-related risks, with some saying that they could only be accounted for if they contained evidence-backed calibration and others taking a less stringent approach. Respondents highlighted a several challenges that they faced when accounting for climate-related risks in their capital frameworks, ranging from the lack of historical data on climate-related risks to the limited availability of high quality and granular sustainability-related data. They also cited difficulties in quantifying financial losses, including attributing defaults to climate risk. The UNDP received responses from 31 Sustainable Insurance Forum members, representing 82% of its membership. 

The Securities and Exchange Board of India (SEBI) has introduced a new mandate requiring listed companies to provide disclosures related to the ‘Green Credit Program’ under the Business Responsibility and Sustainability Reporting (BRSR) framework. In a recently issued circular, the board said that listed entities and their top 10 value chain partners, determined by the value of purchases and sales, must now disclose green credit figures starting from FY 2024-25. The changes, based on recommendations from an expert committee and public consultations, were approved by SEBI in December 2024. To reduce compliance costs and facilitate sustainability verification, the regulator now allows listed entities to opt for either ‘assessment’ or ‘assurance’ for BRSR core metrics. Additionally, new key performance indicators focus on job creation in smaller towns, business openness, and wages paid to women, among others. The rollout of mandatory assessment or assurance follows a phased approach, applying to the top 250 entities in 2024-25, top 500 in 2025-26 and top 1000 in 2026-27. SEBI has deferred the requirement for ESG value chain disclosures by one year to provide listed entities and their partners additional time to establish measurement and reporting systems. Under the revised rules ESG disclosures for the value chain will be voluntary for the top 250 listed entities from FY 2025-26, while from FY 2026-27 assessment or assurance for these disclosures will also be voluntary

The advisory body of the European Commission (EC) – the Platform on Sustainable Finance (PSF) – has responded to a consultation on amendments to the Taxonomy Regulation. The body said it is in favour of simplifying the taxonomy’s reporting requirements in line with its own suggestions, which would reduce corporate reporting burdens by a third. It would also introduce a simplified green asset ratio, a more practical approach to ‘do no significant harm’ criteria, and measures to help SMEs access sustainable finance, said the PSF. However, the platform said it is “concerned” about the “significant reduction” in reporting scope suggested by the EC. It said that the Commission should instead focus on aligning the scope of taxonomy reporting with the original scope of the Corporate Sustainability Reporting Directive. For non-SME companies below the 1,000-employee threshold, reporting should be focused on the most essential standards, including taxonomy alignment, the PSF said.

China’s Ministry of Ecology and Environment has confirmed that steel, cement and aluminium will be incorporated into its national carbon Emissions Trading Scheme (ETS). According to the ministry, these three industries cover roughly 1,500 sites around the country, and will increase the covered emissions from 5 billion tonnes to 8 billion tonnes, expanding the proportion from 40% to 60% of total national carbon dioxide equivalent (CO2e) emissions. Climate think tank Transition Asia said that, since the price of carbon is far cheaper in China than in Europe, there are “important questions” about what carbon price heavy industry in China would consider meaningful as the ETS expands. According to figures quoted by Transition Asia, China’s carbon price was US$14 per tonne of CO2 in 2023, compared to more than €100 (US$108) per tonne in the EU. To make the expanded ETS a success, Transition Asia recommended regularly reviewing high carbon benchmarks as heavy industry accelerates investment, increasing the stringency of intensity benchmarks and introducing auctions for allowances rather than free allocation. 

The US Securities and Exchange Commission (SEC) has voted to end its ongoing defence of rules requiring companies to disclose climate-related financial risks. “The goal of [this] Commission action and notification to the court is to cease the Commission’s involvement in the defence of the costly and unnecessarily intrusive climate change disclosure rules,” said the SEC’s Acting Chairman Mark Uyeda. The rules were adopted in March 2024 and introduced an extensive special disclosure regime for publicly listed companies on their associated climate-related risks. States and private parties have been challenging these rules ever since. In a letter to a court in the Eighth Circuit which was presiding over litigation, the SEC confirmed that the SEC’s counsel is no longer authorised to advance any arguments in defence of the disclosure rule, with the Commission yielding any oral argument time back to the court. This follows Uyeda’s warning in February that he would be looking to delay and potentially roll back the disclosure rule.