Role of regulatory support in climate goals

NEW ANALYSIS: Meeting European climate goals will require a stark contraction in fossil gas use. But in many countries gas grid planning is based on the assumption of infinite gas grid use. Despite the substantial implications for gas grid users and infrastructure, current grid planning does not adequately reflect this new reality. This misalignment poses a substantial barrier to the transition towards a sustainable energy system and underscores the need for more holistic planning. Alignment of energy infrastructure planning with other planning processes could better support climate and social goals. Regulations regarding heat planning, for instance, have significant consequences for gas grid infrastructure development, heating appliance regulations and consumer burdens. Infrastructure planning processes also do not yet address the support needed to ensure vulnerable energy users are able to fully participate in the transition to cleaner, more efficient technologies. Our study provides comprehensive information on the current state of the gas grid, its development, and the regulatory framework in selected European countries, and identifies current regulatory barriers for the phase-out of fossil gas. It concludes with recommendations on how Member States could better align energy infrastructure planning with the attainment of national and EU climate targets: - Adopt a national phase-out target and give energy regulators a net zero mandate. - Make the regulatory framework fit for the gas phase-out. - Adopt integrated heat and grid planning. - Plan future gas infrastructure based on realistic assumptions about future availability of zero-carbon heating technologies. - Track and collect harmonised data at the EU level. - Protect vulnerable customers. More in our Regulatory Assistance Project (RAP) & Oeko-Institut e.V. report released today.

This guide, created by Bank Indonesia and the Ministry of Maritime Affairs and Investment, introduces the Green Calculator, a carbon emission assessment tool aimed at assisting Indonesian businesses, especially in banking, to quantify and manage carbon emissions. Key Points: 1. Climate Change Impact on Economy: Climate change has driven global temperature rise, causing extreme weather and impacting economies worldwide. Indonesia, with its significant exposure due to its geography, faces projected annual losses of over IDR 100 trillion, potentially reaching 40% of GDP by 2050. However, adherence to the Paris Agreement could reduce this impact to 4%. 2. Indonesia’s Carbon Reduction Goals: Indonesia has committed to reducing GHG emissions by 31.89% (without external aid) or 43.20% (with aid) by 2030, aiming for carbon neutrality by 2060. Transitioning to a sustainable economy requires an investment of USD 281 billion by 2030, with non-public funding sources, especially banks, playing a crucial role. 3. Banking Sector’s Role: Banks are both crucial for financing and major contributors to emissions, due to the emissions tied to funded projects. To lower emissions, banks are encouraged to increase their low-emission financing portfolios. 4. Green Calculator Tool: Developed as a mobile app, the Green Calculator aids businesses in measuring emissions from fuel and electricity use, aligning with global GHG standards. Initially covering Scope 1 (direct emissions) and Scope 2 (indirect emissions), the tool is expected to expand to Scope 3 (supply chain emissions). This tool supports banks in preparing for stricter sustainability reporting and aligns with Indonesia's broader green finance initiatives. 5. Regulatory and Policy Support: Bank Indonesia and the Ministry are collaborating to strengthen the green finance ecosystem, supported by regulations like the Financial Sector Development and Strengthening Act (UU PPSK) and sustainable finance guidelines. 6. Future Scope: The Green Calculator, designed to evolve as a "living tool," will be periodically updated to meet the growing global standards and support the transition to a sustainable economy. This tool, along with strategic regulatory support, underscores Indonesia's commitment to sustainable development, providing banks and businesses a framework to monitor and reduce their environmental impact while meeting sustainability reporting standards.

The World Bank’s 2026 policy guide, "Unlocking Nature for Disaster Resilience," outlines a strategic framework for using Nature-based Solutions (NBS) to mitigate climate-related hazards like floods, droughts, and erosion. While global investment in NBS reached US$12 billion through World Bank financing by 2025, a significant funding gap remains, necessitating a two-and-a-half-fold increase by 2030 to meet climate targets. The document emphasizes that while NBS offer cost-effective socioeconomic and environmental co-benefits, they are often overlooked in favor of traditional "gray" infrastructure due to regulatory and technical biases. Consequently, the guide advocates for a three-pronged policy approach—allowing, incentivizing, and requiring NBS—across international, national, and subnational levels to shift from isolated pilot projects to transformative, large-scale action. The report highlights a critical interdependency between multilevel policy alignment and successful local implementation. International agreements (such as the Paris Agreement and Sendai Framework) set global benchmarks, but their effectiveness depends entirely on being translated into national laws that provide regulatory foundations and subnational zoning codes that guide local execution. Without this "multilevel approach," national strategies remain abstract, while local efforts may lack the legal authority or funding necessary to replace or complement gray infrastructure with natural solutions. There is a profound relationship between regulatory mandates and financial viability. The guide illustrates that economic instruments, such as tax deductions in South Africa or fossil fuel taxes in Costa Rica, are most effective when anchored in strong regulatory frameworks like the National Water Act or Forestry Law. The analysis identifies a significant link between integrated water resource management (IWRM) and sectoral policy coherence. Because ecosystems both influence and depend on the water balance, water policies must be harmonized with agriculture, energy (hydropower), and transport strategies. A direct correlation exists between land tenure security and long-term climate resilience. The guide points out that in building and land use policies, formalized land rights for Indigenous and local communities are essential precursors to NBS sustainability. When communities have secure tenure, they are incentivized to invest in long-term natural practices like agroforestry or reforestation. Finally, there is an emerging interrelationship between high-level development goals and infrastructure design standards. By embedding nature as "critical infrastructure" at the highest levels of national planning (as seen in Ethiopia and Bhutan), governments can force a revision of technical codes in the transport and energy sectors.

New Policy Brief | The EU Emissions Trading System and Support for Aviation How can the EU Emissions Trading System (#ETS) better support the #decarbonisation of #aviation while strengthening Europe's industrial #competitiveness? Our latest publication explores how the revised EU ETS, #ReFuelEU Aviation and complementary policy instruments can work together to accelerate the deployment of Sustainable Aviation Fuels (#SAFs), improve market design, and support the transition towards climate-neutral aviation. Drawing on the discussions at the 23rd Florence Air Forum, the contributions include: 1️⃣ Steven Truxal & Juan Montero – SAF as Industrial Policy: From Carbon Pricing to Market Making in the Aviation ETS The authors argue that the ETS is evolving beyond carbon pricing into a strategic industrial policy instrument. They discuss how ETS revenues can stimulate SAF markets, the importance of additionality, targeted support, book-and-claim systems, and the need for coherent market design to strengthen Europe's industrial and energy resilience. 2️⃣ Marie Missao Raude – The EU Emissions Trading System and Support for Aviation Synthesises the discussions. The contribution examines practical challenges surrounding ETS-financed SAF support, market integrity, monitoring and verification, and future policy options including non-CO₂ measures and zero-emission aviation technologies. 3️⃣ @Michael Evans & Leigh Hudson – Making ETS-financed SAF support work in practice The authors assess the cumulative costs of European aviation climate policies and argue that stronger ETS support for SAF is essential to maintain the competitiveness of European airlines while enabling the sector's decarbonisation. They also discuss the long-term relationship between EU measures and the global #CORSIA framework. 4️⃣ Matteo Prussi – Scaling up SAF in Europe: market design, certification and the role of book-and-claim This contribution focuses on the regulatory and market conditions needed to scale SAF deployment. It explores certification, monitoring and traceability, the role of book-and-claim systems, and how regulatory coherence can improve market efficiency while preserving environmental integrity. 5️⃣ Matteo Mirolo – Better SAF than sorry: The ETS revision as an opportunity for European aviation fuel sovereignty Matteo Mirolo examines the strategic dimension of SAF, arguing that the ETS revision provides an opportunity to reinforce Europe's energy security by supporting domestic eSAF production. He proposes a "cap-and-invest" approach in which ETS revenues help finance long-term aviation fuel sovereignty. As the European Commission prepares the next review of the EU ETS, this Policy Brief contributes to the debate on how carbon pricing, industrial policy and innovation can jointly deliver a competitive and sustainable future for European aviation.

Delighted to share our research which has now also been published as a Cambridge Faculty of Law working paper on SSRN: Climate and Investment Law Nexus Reimagined -Beyond ISDS, Obligations and Instruments to Avoid and to Defend by Prof Dr Marie Claire Cordonier-Segger, Ted Gleason, Matheus Garcia and me with lots of thanks to Centre for International Sustainable Development Law and European Climate Foundation Abstract This report explores the critical intersection between international investment agreements (IIAs) and climate action, emphasizing the need to reconcile investment protection with climate goals. While IIAs generally prioritize foreign direct investment protection, they risk hindering ambitious climate policies through mechanisms like investor-state dispute settlement (ISDS). The report critiques broad ISDS clauses, vague investment definitions, and lengthy sunset clauses for their restrictive impacts on states’ ability to regulate for climate resilience. To realign IIAs with climate goals, the report advocates for targeted reforms, including incorporating climate-positive provisions, explicitly supporting renewable energy investments, and phasing out fossil fuel subsidies. Additionally, it highlights the role of robust legal frameworks in mobilizing climate finance, de-risking investments, and fostering international cooperation. The report stresses the importance of integrating environmental considerations across trade and investment frameworks, moving beyond limited Trade and Sustainable Development (TSD) chapters. The report also examines innovative mechanisms like emissions trading system (ETS) linkages and supply-side crediting, which can address carbon leakage and enhance low-carbon investment. Through pragmatic reforms, IIAs can evolve to support the scale of investment required to achieve the Paris Agreement objectives and a just climate transition. https://lnkd.in/equmpB35

The United Arab Emirates (UAE) is advancing its sustainability agenda with the introduction of Federal Decree-Law No (11) of 2024, "On the Reduction of Climate Change Effects." This legislation, a significant milestone after the UAE's pledge to reach net-zero emissions by 2050, demonstrates a proactive approach to addressing climate change on a national level. The enactment of this law signifies a pivotal moment in harmonizing local regulations with international efforts to combat climate change. By setting clear guidelines and priorities, the UAE is taking concrete steps to mitigate the impact of climate change and transition towards a more sustainable future. Business entities operating in the UAE will need to align their practices with the requirements outlined in the federal decree-law. Adhering to these regulations is essential for organizations to contribute effectively to the country's sustainability goals and ensure compliance with the evolving environmental standards. As businesses navigate the implications of this new legislation, understanding the priorities and compliance measures becomes paramount. By embracing sustainable practices and incorporating environmentally responsible strategies, companies can play a vital role in supporting the UAE's commitment to environmental stewardship and long-term sustainability.

The fundamental, inherent limits & flaws of 𝐯𝐨𝐥𝐮𝐧𝐭𝐚𝐫𝐲 𝐜𝐥𝐢𝐦𝐚𝐭𝐞 𝐚𝐜𝐭𝐢𝐨𝐧 have just been highlighted by a new study coinciding and highlighting some key questions of the unfolding #SBTi saga: ' Corporate emissions targets and the neglect of future innovators' ( *links below). Co-author Professor Joeri Rogelj, from the Centre for Environmental Policy and Director of Research at the Grantham Institute - Climate Change and the Environment at Imperial College London, said: "Companies setting their own individual targets risk complacency that we can't afford. The window to keep the planet to 1.5°C warming is rapidly closing, and even for keeping warming well below the upper Paris limit of 2°C we need concerted action to reduce greenhouse gas emissions now. 𝐕𝐨𝐥𝐮𝐧𝐭𝐚𝐫𝐲 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐞𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐬 𝐭𝐚𝐫𝐠𝐞𝐭𝐬 𝐚𝐥𝐨𝐧𝐞 𝐚𝐫𝐞 𝐧𝐨𝐭 𝐞𝐧𝐨𝐮𝐠𝐡 𝐟𝐨𝐫 𝐫𝐚𝐩𝐢𝐝 𝐠𝐥𝐨𝐛𝐚𝐥 𝐝𝐞𝐜𝐚𝐫𝐛𝐨𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐥𝐲 𝐧𝐨𝐭 𝐚 𝐬𝐮𝐛𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐟𝐨𝐫 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧." The authors conclude that governments or intergovernmental organizations need to introduce legal frameworks based on a range of indicators that encourage best practices and innovation, as well as stringent requirements on transparency for any assessments. .... Co-author Professor Detlef Van Vuuren, also from the Copernicus Institute of Sustainable Development, Utrecht University of , said, "Our research underscores the urgent need for robust regulatory frameworks and transparent oversight to guide corporate climate action. 𝐕𝐨𝐥𝐮𝐧𝐭𝐚𝐫𝐲 𝐭𝐚𝐫𝐠𝐞𝐭𝐬, 𝐰𝐡𝐢𝐥𝐞 𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐚𝐛𝐥𝐞, 𝐚𝐫𝐞 𝐧𝐨𝐭 𝐚 𝐬𝐮𝐛𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐟𝐨𝐫 𝐦𝐚𝐧𝐝𝐚𝐭𝐨𝐫𝐲 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 𝐭𝐡𝐚𝐭 𝐞𝐧𝐬𝐮𝐫𝐞 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐚𝐧𝐝 𝐝𝐫𝐢𝐯𝐞 𝐢𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐚𝐜𝐫𝐨𝐬𝐬 𝐚𝐥𝐥 𝐬𝐞𝐜𝐭𝐨𝐫𝐬." The authors conclude that governments or intergovernmental organizations need to introduce legal frameworks based on a range of indicators that encourage #bestpractices and #innovation, as well as stringent requirements on #transparency for any assessments."**) Let me add that the so typical carbon-tunnel view & a 'duty to disclose' instead of a 'duty to act' approach - such as of the International Sustainability Standards Board (ISSB) - of corporations procrastinates the necessary transformative actions and creates an illusion of progress complacency. Moreover, as Alberto Alemanno, founder of The Good Lobby has put it: “The misalignment between what companies say and #lobby for ”is possibly the major factor preventing advances on major societal issues." #climatechange #governance #SBTi #sustainability #netzero #ESG

Guidance on Climate Transition Plans under ESRS For organisations navigating climate reporting and sustainability compliance, the new guidance on implementing climate transition plans under the European Sustainability Reporting Standards (ESRS) provides valuable support! The guidance provides an approach for organisations to meet the ESRS requirements by detailing disclosure obligations that align with key EU regulations, such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. This alignment helps ensure climate transition activities and sustainability disclosures meet broader European compliance standards, reinforcing their commitment to responsible and sustainable practices in line with EU legislation. 1️⃣ Purpose: Offers non-binding guidance to help organizations create effective transition plans for climate change mitigation. 2️⃣ Compliance: Maps out how ESRS aligns with EU laws like the Corporate Sustainability Due Diligence Directive (CSDDD) and EU Taxonomy, ensuring regulatory alignment 3️⃣ Structure: Covers all aspects of climate disclosure—from European frameworks and disclosure requirements to international standards 4️⃣ Paris Agreement Alignment: Organizations must disclose targets that align with the 1.5°C goal, showing commitment to global climate efforts 5️⃣ Decarbonization: Outlines required emissions reduction actions, including operational changes and product modifications. Organisations are required to outline specific actions, known as "decarbonization levers," which may include operational adjustments, product changes, and other emissions reduction initiatives 6️⃣ Investments: Specifies the need for transparent reporting on investments, including EU Taxonomy-aligned CapEx for sustainable projects 7️⃣ Disclosures: Companies involved in EU Taxonomy activities must show their alignment with taxonomy criteria for sustainable finance 8️⃣ Governance: Transition plans should be embedded within overall corporate strategy, backed by governance bodies to ensure alignment with broader goals 9️⃣ Progress: Regular updates on implementation are required, measuring action effectiveness toward emissions targets 🔟 IROs from climate change mitigation: The guidance stresses the need for organisations to assess and disclose social and environmental impacts, risks, and opportunities linked to their climate transition plans The guidance emphasises that climate transition plans should be fully embedded within a company's overarching strategy and be actively supported by governance bodies. This integration ensures that climate goals are not treated as standalone objectives but are interwoven with long-term corporate planning. By doing so, organisations can align their climate ambitions with their overall business objectives, securing strategic and governance-level commitment to climate action.

Draft Implementation Guidance on Transition Plan for Climate Change Mitigation published on #EFRAG website. Nice and timely 🤪 The below summary is all in yellow, which apparently means that it is contextualising, raising questions on text proposed or text that is still to be reviewed with stakeholders. 1. Purpose and Scope: This guidance provides non-authoritative support for undertakings in implementing #transitionplans for #climatechange mitigation, as required under the #ESRS. 2. Regulatory Compliance: The document details ESRS disclosure requirements, linking them to EU laws like the #CSDDD and #EUTaxonomy, among others. 3. Structure: The guidance is structured into multiple chapters, covering the European framework, specifics of disclosure requirements for climate transition plans, connections to other European regulatory frameworks and international standards and Frequently Asked Questions (FAQs). 4. Target compatibility: Undertakings must disclose their #targets and explain how they are compatible with the 1.5°C target set by the Paris Agreement. 5. Actions and Decarbonization levers: Undertakings must describe the #decarbonizationlevers, such as operational and product adjustments, that support #emissions reduction. 6. Investment and funding: They are also required to disclose investments and funding supporting these plans, including EU Taxonomy-aligned CapEx. 7. Supporting disclosures: Undertakings conducting activities covered by the EU Taxonomy for #sustainablefinance must disclose their alignment with taxonomy criteria. This includes climate-related objectives and compliance with technical screening criteria. 8. Governance and strategy: The document emphasises that climate transition plans must be embedded in a undertaking’s overall strategy, with explicit support from governance bodies. This ensures alignment between sustainability goals and corporate planning. 9. Progress Reporting: Undertakings are required to provide updates on the progress of implementing their transition plans. This includes tracking the effectiveness of planned actions and their contribution toward emission reduction targets. 10. #IROs arising from the transition plan for climate change mitigation: The guidance highlights the importance of considering social and #biodiversity impacts, risks and opportunities connected to the climate transition plan. Undertakings must disclose how transition plans may affect workers, communities, and #ecosystems and may be dependent from its adaptation actions. 

It’s clear to me that organizations are accelerating their sustainability efforts. What I’m hearing in conversations with clients and partners is highlighted in this year’s Capgemini Research Institute Sustainability Trends Report, A World in Balance, which finds that 84% of executives expect their organization to meet its emissions goals. Less than a tenth say they are behind. Executives point to climate regulations as an important motivator for this progress. 75% believe that sustainability regulations are vital to achieving climate change goals. For example, the EU Corporate Sustainability Reporting Directive (CSRD) came into effect in 2023, requiring large organizations to report regularly on their environmental and social impact. However, it’s not surprising to see organizations struggling to track Scope 3 emissions in their supply chains. Only around a third of organizations required to report for CSRD say they are prepared to report downstream emissions. Organizations that currently feel unprepared have an opportunity to consider leveraging AI and data to track emissions across their supply chains. Read the full report: https://lnkd.in/eJgrcK7p #Sustainability #GetTheFutureYouWant