ESG Monthly News Update: February 2025
ESG Shifts in February 2025: Regulatory Changes and Implications for Corporate Strategy and Reporting
We’re only two months into 2025, and significant ESG developments have already brought crucial implications for corporate reporting, compliance, and strategy. The ongoing evolution of climate-related disclosure rules continues to shape corporate practices, with regulatory shifts such as the SEC’s recent decision to withdraw its climate risk disclosure rule. This change highlights the growing tension between compliance obligations and the business community’s resistance to broad climate-related reporting.
At the same time, the European Commission just introduced the "Simplification Omnibus," proposing significant changes to the Corporate Sustainability Reporting Directive (CSRD). These revisions aim to reduce the regulatory burden on businesses by limiting mandatory sustainability reporting to firms with over 1,000 employees, thereby excluding approximately 80% of companies previously covered. Small and medium-sized enterprises (SMEs) would also have the option to decline data requests from larger corporations seeking compliance assistance. While these adjustments address concerns about competitiveness, they have raised debates about the potential impact on transparency and the EU's broader sustainability objectives.
Additionally, the SBTi’s focus on climate action and investments a company takes that fall outside of its direct operations and supply chain (e.g., carbon credits, carbon removal technology) raises questions about the long-term sustainability of offset strategies. This shift challenges businesses to balance transparent emissions reductions and reliance on external mitigation activities.
As our February news roundup highlights, 2025 is shaping up to be a turning point—where businesses must balance adaptation with accountability to evolving ESG regulations and compliance frameworks, ensuring strategic alignment with sustainability reporting and goals to remain competitive in a rapidly changing market. Because of these ESG shifts, businesses must decide whether to see the changes as an opportunity to lead or a reason to pull back. Our advice is for organizations to take a proactive approach which will better position them for long-term resilience.
At Summit Strategy Group, we help you navigate these changes and create a resilient, sustainable future. Contact us today.
Contributor Spotlight: Brandon Suchan
Brandon Suchan is a Manager of ESG Consulting at Summit Strategy Group, where he helps clients navigate their sustainability journey by conducting greenhouse gas emissions inventories, developing ESG reports, and crafting strategic plans. With a background in data collection, analytics, and corporate sustainability, Brandon drives brand value through impactful storytelling and communication, leveraging both quantitative and qualitative insights.
What We Read in February 2025
What's inside the EU's 'Simplification Omnibus' on sustainability rules
Reuters, February 26, 2025
The proposed revisions would limit mandatory sustainability reporting to EU-headquarted companies with more than 1,000 employees and EUR 50 million in revenue through sales, significantly reducing the number of businesses subject to these requirements by about 80%. This change would ease compliance burdens for smaller businesses but potentially limit transparency in corporate sustainability efforts.
Under the new proposal, small and medium-sized enterprises (SMEs) would have the right to refuse data requests from larger corporations that need sustainability information to meet their own reporting obligations. This change seeks to prevent excessive administrative strain on SMEs but could create challenges for larger companies trying to ensure compliance across their supply chains.
Only companies that exceed the 1,000-employee threshold would be required to report on their alignment with the EU’s sustainable finance taxonomy—a classification system that defines environmentally sustainable economic activities. This revision raises concerns about reduced visibility into corporate sustainability practices and investment decisions.
SBTi pushes back timeline for new corporate net zero standard
ESG Today, February 13, 2025
The Science Based Targets initiative (SBTi) has delayed the release of its updated Corporate Net-Zero Standard 2.0 draft. First scheduled for the end of 2024, the consultation process will now start no earlier than March and will be followed by a second public consultation later.
The SBTi's revision of its Corporate Net Zero Standard has sparked controversy, particularly over plans to expand the use of carbon credits for Scope 3 emissions. Following backlash, the organization is revisiting this approach under new leadership.
Expert working groups will be established to consult on key topics like Scope 2 emissions, Beyond Value Chain Mitigation (BVCM) activities, including carbon credits, and data quality. The process aims to allow companies to update their commitments without duplicating previous efforts.
SEC announces it will not defend climate disclosure rule
The Hill, February 11, 2025
The SEC announced it will not defend a rule requiring public companies to disclose climate-related risks and emissions. Acting SEC Chair Mark Uyeda criticized the rule, calling it flawed and harmful to markets.
The rule, finalized in March 2024, mandated emissions disclosures when relevant to investment decisions, but it was a compromise from a 2022 proposal that would have required broader emissions reporting. The rule was set to take effect in 2026 for large firms.
The SEC move marks the latest by the Trump administration to unwind the Biden administration’s rules on environmental and energy policy, including the suspension of the $5 billion electric vehicle charger program funded under the Bipartisan Infrastructure Law.
US businesses hold steady on support for Paris Agreement even after cozying up to Trump
Trellis, February 3, 2025
Despite President Trump's renewed withdrawal from the Paris Agreement, corporate support for climate action remains strong, with close to 3,000 businesses backing the "America Is All In" campaign.
Companies are maintaining climate commitments due to long-term planning and policies like the Inflation Reduction Act, which boosts clean energy investments, particularly in Republican-held areas.
Many firms are strategically timing public statements, aiming for impactful moments like COP30, while staying committed to science-based targets and renewable energy goals.
Global air travel surges while switch to clean jet fuel lags
Bloomberg, February 11, 2025
Global air travel surged to record levels in 2024, but sustainable aviation fuel (SAF) adoption remains low, accounting for just 0.3% of fuel consumption—far below industry targets.
Airlines face challenges meeting the 10% SAF target by 2030 due to high costs, limited supply, and increasing travel demand, which could negate emission reduction efforts.
New regulations and incentives may drive demand, but skepticism persists about the industry's capacity to produce and use enough SAF to meet climate goals.
