Emperor Sustainability Briefing 30.07.2026

Issue #26

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Devil in the detail

Sometimes, we need to dig beyond the headlines to get to the full picture – something of a theme in this edition of the Briefing. While the IEA has forecast another global rise in power sector emissions, a big driver of this is temporary emissions from clean tech build-out. Although the EU is set to weaken its emissions system, it’s also proposing a better mechanism for driving money into decarbonisation. And while the UK’s new leader may have an open mind for oil and gas, he remains a vocal advocate for the potential of the green economy.

It’s a reminder that progress in sustainability is rarely just two steps forward, one step back, but a movement across many fronts at once. We hope you enjoy your stroll through the Briefing this morning!

In this briefing…

ESRS-40a – CSRD review

California simplification – ETS weakened

EU EV charging – PFAS ban

North Sea oil and gas – IEA emissions rise

Clean investment – Green charcoal

Stories

Regulation and frameworks

Updated ESRS for non-EU companies now released

The EU’s CSRD legislation requires non-EU companies with significant EU activities to report at the Group-level from FY28, although this reporting will be lighter than full CSRD. To be in scope, a non-EU company needs to make over €450mn in revenue in the EU, and also have an EU subsidiary with over €200mn in revenue. EFRAG, the EU’s standards creator, has now released the latest draft of these non-EU standards, termed ESRS-40a.

A note on naming: the non-EU CSRD standards were originally titled N-ESRS, then ESRS-TC. Based on this latest release, EFRAG looks set on calling them ESRS-40a, which is a bit less intuitive – but is probably what we should all call them for now!

ESRS-40a will ask companies to only report on company impacts, rather than on financial risks and opportunities, meaning that only one half of the double materiality approach – the impact half – will have to be reported on. This will reduce burden and also take away some of the difficult financial quantification elements. Companies may also be able to report only on EU-related Group impacts, rather than having to report CSRD for its global operations. 

A 100-day consultation is now open. We’re currently helping companies understand their strategy for CSRD reporting, and what 40a might mean for them. Do get in touch if you’d like a chat on this, and a viewpoint on what your approach could be!

EFRAG review of CSRD reporters puts climate and transition plans in focus 

EFRAG, the EU’s sustainability standards creator, has issued its annual review of sustainability reporting. Key findings this year include climate remaining the dominant sustainability topic, with 99% of companies identifying Climate Change as material, and 69% disclosing a climate transition plan – up from 55% the previous year.

Most non-climate environmental topics continue to gain prominence too, with Pollution, Water, Biodiversity and Circular Economy as material topics all rising by around 5%. Furthermore, social topics remain highly significant, with 99% of companies identifying Own Workforce as material and 69% citing Workers in the Value Chain and Consumers and End Users. Importantly, reporting across a wider set of environmental and social impacts continues to grow in sophistication.

California to limit Scope 3 reporting to key categories

The California Air Resources Board (CARB) has limited its mandatory reporting requirements for Scope 3 emissions after companies expressed concerns about cost and data availability. CARB is the regulator in charge of SB253, which requires companies with revenues greater than $1 billion that do business in California to report annually on their scope 1, 2 and 3 emissions. Importantly, this will also impact non-US companies with operations in California.

After first pushing back the deadline for mandatory reporting to November this year, CARB has now limited initial reporting to just five of the fifteen scope 3 categories. These are categories: 1 (purchased goods and services), 3 (fuel), 5 (waste), 6 (business travel) and 7 (employee commuting). Notably, this excludes some of the most challenging categories, such as 11 (use of sold products).

These allowances are stated to be primarily down to data availability and cost challenges. However, given that many large companies internationally already collect and report these emissions, many will suspect that CARB’s weakening of SB 253 is partially a concession to the broader landscape, given the anti-sustainability political environment in the US. 

Shortlist

Pictet has raised over $250 million for a new environmental solutions fund, targeting companies developing solutions in areas including electrification, waste, and environmental services.

Qantas has successfully completed a 19-hour flight from France to Melbourne, using its new ultra long-distance aircraft – which could ultimately reduce total travel emissions from long trips. 

EU

EU ETS likely to be weakened, with plans to drive funds into decarbonisation investment.

After months of argument and speculation, the European Commission has now released its Emissions Trading System (ETS) review, which as anticipated proposes greater reliefs for industry. The review recommends a slowing of the overall speed of emissions reductions demanded by the system, meaning greater emissions allowances – and therefore lower costs – for exposed companies in high-emitting sectors. The Commission has argued that these changes would still ultimately align with the EU’s 2040 climate target of a 90% reduction in emissions against 1990 levels. 

The broader context for these changes is the current energy crisis caused by the conflict in Iran, which has resulted in calls from EU companies for the bloc to take action to reduce costs and increase competitiveness. 

One of the original aims of the ETS was that the financial ‘allowances’ afforded by the system would then be reinvested into decarbonising technologies, with some in the EU hierarchy expressing frustration this year that companies had not gone far enough to make this a reality. In response, the Commission has also proposed as part of its review a requirement for Member States to spend 50% of national ETS revenues on investments in industrial decarbonisation technologies. 

The proposals also include changes specific to the aviation, maritime transport, and waste sectors –  you can read a full summary here. 

EU charging network growth outpaces EV uptake 

Europe's public EV charging network is expanding faster than the number of electric vehicles using it, according to new analysis from clean transport advocacy group Transport & Environment (T&E). The research found that the EU had around 1.1 million public charging points by the end of 2025, with every member state except Malta exceeding the charging-capacity requirements set out under the Alternative Fuels Infrastructure Regulation (AFIR). Across the bloc, charging capacity is now estimated to be 180% above the minimum target. 

T&E also found that 79% of the EU's core road network now meets the bloc's ultra-rapid charging requirements, suggesting that concerns over a shortage of public chargers may be easing. The organisation argues that attention should now shift towards reliability, price transparency and ease of use, rather than continued rollout, as the more pressing levers for encouraging EV adoption. 

The findings challenge a common assumption that charger availability is the primary barrier to EV uptake in Europe. For clients in transport, automotive and energy, this suggests the centre of gravity is moving from infrastructure build-out towards user experience and demand-side support. It's a useful reminder to check whether sustainability strategies and communications on EV transition still reflect where the real barriers now lie. 

Policy

‘Major victory’: Sweden bans ‘forever chemicals’ before EU does 

Sweden has beaten the usually frontrunning EU to the punch on per-and-polyfluoroalkyl substances (PFAS), which it now plans to ban in everyday products. PFAS are a group of more than 10,000 synthetic chemicals that take thousands of years to naturally degrade, earning the name ‘forever chemicals.’ The ban extends to clothing, cosmetics, kitchen utensils, and other everyday products where there are working alternatives.  

With the ban coming into effect from the start of 2028, the legislation is a taste of things to come across Europe, with the EU expected to present legislative proposals on PFAS in 2027. 

Energy

Andy Burnham to back North Sea oil and gas

The new UK Prime Minister Andy Burnham is reportedly keen to “move quickly” to increase North Sea oil and gas production, marking something of a turn from previous leader Keir Starmer’s position. The controversial Jackdaw and Rosebank projects may be given approval within the next few weeks, in a move likely to draw ire from the green wing of the party. While Labour had promised not to issue new licenses for drilling, these two projects could potentially be greenlit as their licenses were issued during the previous government. 

Mr. Burnham has been generally ambivalent towards climate change action during his political career. He has been both a vocal advocate for the green economy and for the importance of net zero, while also stating that he has an “open mind” towards further North Sea drilling. This early move may give us something of an indication as to his position: while action on climate change is important, imperatives around a volatile energy market and cost-of-living pressures may well take priority. Companies will have to wait to see if the complexity of his position ultimately results in changes to corporate sustainability regulation. 

IEA: Global power generation emissions to rise 1% in 2026

The International Energy Agency (IEA), who produce some of the most widely used energy data and forecasts, has predicted that total global power emissions will rise in 2026 – as they did in 2025. This statistic tells a mixed story. While much of the rise is down to countries switching to coal to insulate from gas price shocks, and increased manufacturing activity, switches to clean tech such as heat pumps, EVs and electrified industrial processes have also contributed to this rise. Taking a broad view, it’s anticipated that these clean tech switches will eventually create significant reductions in emissions, as more of the world’s electricity systems become decarbonised.

As many companies use IEA data to underpin their quantifications on sustainability, you may want to review if this new forecast affects your position. On a brighter note, the IEA’s new report confirmed that total generation of renewable energy rose sharply once again this year. Taken as a whole, renewables are on track to become the world’s largest source of electricity generation in 2026, overtaking coal.

Finance

Clean energy investment and demand grow despite NY data centre ban

Investment in climate solutions continues to accelerate, but the policy landscape continues to remain fragmented. In the first half of 2026, climate-tech funding has surged, driven largely by rising demand for low-carbon power from energy-hungry data centres. 

Simultaneously, the UN-backed Green Climate Fund unlocked an additional $4 billion of capacity to finance climate investments, signalling continued institutional support for the net-zero transition. Yet, in a contrasting move, New York became the first US state to impose a moratorium on new data centre development over concerns about energy and environmental impacts. 

The conflicting developments highlight an increasingly polarised global sustainability landscape, where capital continues to flow into clean growth opportunities even as policymakers take diverging approaches to managing their consequences.

Corporate

Rio Tinto looks into swapping coal with biomass charcoal 

Mining giant Rio Tinto has signed a five-year offtake agreement with Australia-based SuperChar, a developer of plant-based green charcoal. Developed from biomass using rapidly-growing bana grass as a feedstock, trials have shown that the charcoal could replace up to 30% of the coal used in refinery boilers. Set to be in use at Rio Tinto’s alumina refineries, the coal substitute could prove to be an innovative way to replace a portion of fossil fuel usage in a notoriously hard-to-decarbonise sector – although the project is currently at a relatively early stage. 

One Number: £1.15bn 

The amount the UK economy lost during the June heat wave, according to research from the London School of Economics and Political Science (LSE). As heat waves become more regular due to climate change, companies and governments will have to reckon more closely with the size of the impacts they create. One researcher commented: “Our findings point to a country that remains insufficiently adapted to the changing climate.”

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.