Emperor Sustainability Briefing 07.05.2026

Issue #20

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Foot on the pedal

While having targets for net zero and meeting those targets are certainly two different things, we were pleased to see a recent study finding that four out of five companies globally were either maintaining or accelerating their climate goals, from a hefty sample size of over 3,500 firms across geographies. 

There’s now a depth and maturity to decarbonisation efforts which counters more short-term narratives around pullback – and even in a more pointedly anti-ESG atmosphere such as the US, this Briefing features some green shoots of progress in NYC and California. Meanwhile, the IFRS issues an important update on its approach to nature reporting, and France publishes a consolidated national plan for meeting its climate targets.

Contents

ISSB nature – SBTi update

EUDR simplified – EU circularity

France’s plan – US update

Stories

Regulation and frameworks

IFRS to develop non-mandatory Nature-related disclosure requirements

The ISSB is proceeding with developing its proposed nature-related disclosures, but has revealed that these will take the form of a Practice Statement providing guidance on nature reporting – instead of, for instance, a mandatory ‘S3’ standard. ‘Practice Statement’ is the IFRS’ usual terminology for a non-mandatory piece of guidance.

The Statement will be treated as supplementary to S1 and S2, with any nature-related risks and opportunities expected to be reported on within the S1 standard. As ISSB chair Emmanuel Faber put it: “Providing material nature-related disclosures is not optional; IFRS S1 already requires that. A Practice Statement will guide companies on how to provide such disclosures.”

The IFRS has said a first draft will be released in October. While we don’t expect it to incorporate the full depth of the Taskforce on Nature-related Financial Disclosures (TNFD) framework, the IFRS name checks TNFD in its announcement, meaning it’s safe to assume it will draw in part on the framework’s principles and approaches. Therefore if you’re currently considering a nature approach informed by TNFD or the LEAP framework, this will likely align with (or at least not contradict) the ISSB’s eventual stance.

SBTi issues urgent update to reduction methodology

SBTi, the decarbonisation target standard setter, has issued an urgent update to its ‘Absolute Contraction Approach’ (ACA) methodology in order to bring current rules more closely into alignment with the rules of its upcoming V2.0 standard. In a nutshell,, the ACA has been altered so that companies setting targets from now (i.e. 2026 onwards) are not overly penalised for ‘starting late’ by having to meet an unrealistically steep near-term decarbonisation trajectory.

Importantly, targets validated under the earlier ACA remain aligned, so you won’t have to immediately re-set your target because of this. However, given the speed of the update, companies who are either in the process of setting a target in 2026 or 2027, whether a first-time or renewed target, will see this new approach applied to their targets – which could materially change commitments. Any companies currently using ACA should also review the changes, as they will likely affect the rate of decarbonisation expected of you in future years once you renew.

EUDR simplified, but largely maintained

Updates to the EU deforestation regulation (EUDR) have been announced following a review. While the law has not been reopened for substantial alterations, as some had feared, leather has been removed from the scope, while soap and instant coffee have been added. The regulation is still on track to be introduced from the beginning of 2027.

The Short List

Liverpool FC have become the first football club to be awarded the Food Made Good Standard certification, and targets 100% of food waste recycled by 2030

Aviva Investors has launched a large-scale afforestation project in Colombia in collaboration with a partner, funded by Aviva’s own Carbon Removal Fund

Octopus Energy Generation signs a deal claiming to remove 50 million tonnes of carbon from the atmosphere over the next 40 years

Policy

EU Circular Economy Act: Ikea, Philips, Lego, more share requests

The EU’s Circular Economy Act, due for publication this year, has a broad range of goals for the circular economy: including establishing a single market for secondary raw materials, increasing recycled material supply, and boosting demand for recycled materials. The Ecodesign and ‘right to repair’ regulations were successful results of the previous Circular Economy Action Plan, which this new Act now looks to build on.

12 signatories, including Ikea, Philips, Lego and H&M, have published a letter to the EU Commission identifying priorities for the upcoming law – including economic incentives for making circular business models cost-competitive, and the development of finance solutions. The Act is set to be finalised later this year, and we’ll bring you updates on this potentially influential piece of legislation in future Briefings.

France publishes plan to end fossil fuel usage by 2050

The French government has published a national roadmap for transitioning away from fossil fuels, with some analysts claiming it represents one of the most detailed energy transition plans published by a country yet. While the plan doesn’t launch any new commitments, it brings together national targets across electrification, renewables, and transport into a phased approach – including an end to oil by 2045. For companies with French operations underway with their own transitions, the plan will be taken as a welcome sign of continued national momentum and support. France24 provides a useful summary of the key targets underlying the plan.

Latest from the US: New York pensions; California disclosures; White House on DEI

There have been a few stories out of the US in the past month on ESG and sustainability, which we’ve gathered together for you. New York City’s pensions system celebrated that funds had successfully cut portfolio emissions by nearly 50% on the way to their 2040 net zero goals, while also putting BlackRock and Fidelity on notice for not being aligned with NYC expectations. As some of the original ESG rows in the US had occurred over red state pension funds’ adherence to ESG principles, NYC’s pension progress is a reminder of the stark contrast in views within the country.

Over on the west coast, litigation – led by ExxonMobil – continued to hamper California’s legislation on TCFD-like disclosures for companies. As California has long been a ‘trendsetter’ for environmental standards in the US, the challenge is being treated as something of a test case for environmental transparency, not least as the legislation would capture over 3,000 companies. While outcomes are still unclear, many believe the appeals court will rule in favour of California.

At a federal level, things are a bit more predictable. The White House’s own ‘2026 Economic Report of the President’ has claimed that ‘systematic misallocation’ of capital towards green investments, such as climate & DEI-related investments, have reduced the U.S. GDP by $98bn - $196bn between 2016-23. While the White House’s position on ESG remains negative, the opposing push at a state level means that the US remains a dynamic on sustainability, with signs of both progress and pushback.

One Number

4 out of 5

A Cambridge study found that four out of five forest protection projects from which carbon credits were sold successfully delivered on their forest protection goals. However, credits were also found to have been oversold relative to the decarbonisation created. A professor involved in the study commented: “A key take-home message is that 'bad credits' do not necessarily mean 'bad projects'.”

To discuss any of these topics in more detail or speak to one of our Sustainability team about how to better your corporate sustainability efforts, email [email protected] -we'd love to hear from you.