ESG Ahead Brief
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BLOG Story
The original blog was published May 22, 2026 in LinkedIn by Veini Simolin.
The world of sustainability reporting is often convoluted. There are overlaps where it may be difficult to notice them, and things might not always be as clear cut as they initially appear. Different frameworks, views and ways of working compound to create a chaotic overall environment. In my view this is the main reason for ESG pushback, and the deregulation that we have seen follow that in the western world. My personal mission is to help bring clarity to this mess, and making this newsletter is one of the main ways that I organise ideas in this space. So, thanks for reading, and helping me be a better sustainability expert!
🇺🇸 This week I decided to get the bad news out of the way first. With news of yet more regression and corruption coming from the white house (see the “settlement” that Trump made with the IRS for more information) I wanted to bring attention to another poor decision made by the executive branch of the US government. Decisions like these tend to fly under the radar when the regime keeps on doing one outrageous thing after another. This however does not mean that these kinds of things are not important, and to me sustainability deregulation is as important a topic as any to talk about and bring attention to.
In short, the U.S. Securities and Exchange Commission (SEC) has sent a letter to the U.S. Court of Appeals, informing it of its plans to “reconsider” the corporate climate disclosure rules introduced by the Commission during the Biden administration. Luckily the process to reconsider the rules might be a lengthy one with time for public comment as well as legal justification for the possible changes.
“The climate reporting rules were adopted by the agency in 2024, under prior Biden-appointed SEC Chair Gary Gensler, establishing for the first time requirements for public companies in the U.S. to provide disclosure on climate risks facing their businesses, plans to address those risks, the financial impact of severe weather events, and, in some cases, greenhouse gas emissions originating from their operations.”
The commission has stated that it believes the rules are an overreach of the SEC’s authority, and that the costs outweigh the benefits. This position is of course difficult to justify in a world beset by increasing climate risk and uncertainty. We will see how the process progresses.
(https://www.esgtoday.com/sec-tells-court-it-plans-to-scrap-climate-reporting-rules/)
🌐 This post comes from Felix Hawkings. Go give him a follow. He has a lot of great sustainability content. This post is about the apparent disconnect between the globally adopted ISSB sustainability reporting rules and the EU sustainability reporting rules. The biggest point here is that the two frameworks are not actually that divergent, however the EU framework is much broader, especially because the EU operates on the double materiality principle, where topics are evaluated both on the financial materiality, as well as the materiality of the impact on people and the environment, whereas in the ISSB framework only the financial perspective is considered.
“The narrative around the EU and the ISSB has been framed in the market as regulatory divergence. But if you look at the actual interoperability between the frameworks, it is not divergence. ↳ We keep assuming the EU’s reporting rules are stricter. They aren’t. They are vastly broader. The ISSB operates on single materiality: How does the changing climate impact the company’s financial value? The EU demands double materiality: How does the company impact the physical world? ↳ Multinational companies are already used to dealing with fragmented tax codes and labour laws. They now have to build new internal reporting architectures that satisfy both regulatory philosophies. A unified global ESG baseline is fading. We are entering an era where companies must navigate a multi-jurisdictional compliance market, Proving financial resilience to the US and its environmental impact on Europe. Does the EU’s decision to consolidate and reduce specific data points mean we are getting more reporting, but less actual transparency? Sources: EU Commission and Green Central Bank”
🇨🇳 And another post from Felix Hawkings, to keep things balanced in my geopolitical criticism. After all it is not only the US that is responsible for the transition towards a more sustainable economy, China also has to play its part. This post is a bit of a double-edged sword. On one hand the new 15-year plan has a clear goal of delivering an overwhelming abundance of cheap clean energy, on the other hand there is no legally binding mandate for the country to phase out coal. This means that the responsibility of the transition is now on the shoulders of the Chinese industrial core. This might work, and show the west the way to decarbonisation, but there is the risk, that the transition is not as smooth as hoped. We shall see.
“China’s new 15th Five-Year Plan has just been launched. There is a massive coal loophole. The draft of the plan (2026-2030) has just been released. It reveals a geopolitical contradiction: Beijing is building the world’s largest clean energy infrastructure, while intentionally leaving a massive loophole for its emissions to keep rising. ↳ They are targeting 100 national-level zero-carbon industrial parks, doubling non-fossil energy over the next decade, and deploying 100 gigawatts of pumped hydro storage. ↳ Despite this historic green infrastructure rollout, Beijing actually weakened its carbon intensity reduction target to 17% (down from 18% in the previous plan). Crucially, they refused to set a hard, binding cap on absolute emissions. ↳ They actively walked back earlier commitments to rapidly phase down coal. If China’s GDP grows at its projected 4.5% annually, their absolute carbon emissions are structurally permitted to rise by up to 6% over the next five years. ↳ Western ESG frameworks demand immediate decarbonization through strict regulation, reporting, and fossil fuel restriction. China’s strategy is entirely different. They are choosing to out-build the problem betting that overwhelming the grid with cheap, scalable, clean tech will eventually crowd out coal organically, without ever having to sacrifice their short-term industrial security. We want the energy transition to be a synchronised, global phase-out of carbon. China is showing how it is more of an industrial arms race. If China successfully decarbonises by simply over-supplying cheap renewables until coal is economically obsolete, what does that mean for Western compliance reporting and carbon taxes?”
🏭 The funny thing about US politics is that even though there is a great deal of direct influence and co-operation between the largest companies and the central government there is still very often a mismatch in the goals and aspirations of both. The Trump administration has been trying to pressure companies into stopping ESG efforts, and to some success, but still many companies appear to see the value in their sustainability efforts.
Now notably Microsoft has announced their first carbon removal deal in a while signalling a clear intention to grow the sustainability of their operations. Notably Microsoft has been one of the largest buyers of carbon removals in the world, and it is an optimistic sign seeing them continue that trajectory. How much they will be buying carbon removals in the future remains to be seen. In any case this is a good reminder that in the midst of bad news Donald Trump still does not control everything in the world.