Dear Readers, we’re moving Economy & Society from Tuesdays to Wednesdays starting next week—giving us more time to capture what’s shaping the week.
In this week’s edition of Economy and Society:
- European Banking Authority asks regulators to pause ESG enforcement
- British asset managers maintain ESG strategies, report finds
- China issues green finance definition
- No states acted on ESG legislation last week
- UBS quits NZBA
- Thomson Reuters issues mid-year ESG assessment
Around the world
European Banking Authority asks regulators to pause ESG enforcement
What’s the story?
The European Banking Authority issued a no action letter last week asking national regulators to pause enforcement of recently enacted ESG banking disclosure rules. The agency said the pause would give regulators time to account for ongoing EU omnibus negotiations.
Why does it matter?
The pause delays an expansion of ESG reporting rules to the broader banking sector beyond large institutions. The outcome of the EU’s omnibus negotiations will determine whether and how the new requirements move forward.
Read more
According to ESG Today:
The no action letter follows the publication by the EU in 2024 of a Banking Package (CRR3), which included changes to reporting requirements for banks beginning in 2025, including separate disclosure of environmental physical and transition risks, and their social and governance risks, total exposure to fossil fuel sector entities, and disclosures on how institutions integrate the identified ESG risks in their business strategy and processes, and governance and risk management. …
The no action letter also comes as the EBA is in the process of evaluating its own proposed amendments to the banking package reporting requirements, also made in light of the EU’s simplification initiative.
According to the EBA, the developments ongoing in the Omnibus initiative and its own proposed amendments are expected to have “a direct impact on the structure and content of ESG risk-related disclosures” under its banking package requirements, specifically due to changes in the EU Taxonomy, as well as the updates to the CSRD. The no action letter comes as there is still uncertainty regarding the final outcome of the Omnibus initiative on these regulations, and on how it will impact the EBA’s disclosure requirements, the agency added.
British asset managers maintain ESG strategies, report finds
What’s the story?
New research from British financial advisory firm Isio found most UK-based asset managers maintain ESG investment policies and dedicated sustainability teams, despite political pushback in the United States.
Why does it matter?
The findings suggest continued investor commitment to ESG in the UK, even as some financial institutions leave international climate alliances. The divergence may influence whether ESG policies are pursued through coordinated industry groups or managed within individual institutions.
Read more
According to Wealth Briefing:
The survey reviewed more than 140 funds from about 65 UK-based asset managers. Isio found that 97 per cent of asset managers have an established ESG policy and sustainability teams in place, despite high-profile withdrawals from climate initiatives and concerns over fund labelling.
Isio’s research evaluates ESG integration across asset classes, exploring developments in investment approach, risk management, stewardship, reporting and collaboration, using its proprietary Sustainability Integration Assessments (SIAs). It found continued strong progress at firm level, but some inconsistencies in how ESG is embedded, evidenced and disclosed at fund level. …
Isio found that overall levels of ESG integration remain strong at firm level with more asset managers committing to the UK Stewardship Code (69 per cent in 2025 versus 65 per cent in 2024) and Net Zero plans (65 per cent in 2025 versus 58 per cent in 2024). However, due to rising political pressures, particularly in the US, there have been some withdrawals from other collaborative sustainability initiatives, with signatories to the Net Zero Asset Managers Initiative (NZAMI) decreasing from 63 per cent in 2024 to 57 per cent in 2025.
China issues green finance definition
What’s the story?
China’s central bank, the National Financial Regulatory Administration, and the China Securities Regulatory Commission released the Green Finance Endorsed Project Catalogue last week, defining which debt instruments qualify as green finance products.
Why does it matter?
China joins jurisdictions such as the EU, Australia, Hong Kong, Singapore, Canada, and India in establishing green finance definitions. The United States and Great Britain have not established similar definitions.
Read more
According to ESG Today:
According to a statement released by PBOC, the new catalogue is intended to “enhance the liquidity of the green finance market, improve the efficiency of green financial asset management, and reduce the cost of project identification.” The new catalogue will take effect on October 1, 2025. …
In addition to creating a unified system for green finance products, the new catalogue also expands the range of categories relative to the current standards, to cover projects including energy conservation and carbon reduction, environmental protection, resource recycling, green and low-carbon energy transition, ecological protection and restoration, green infrastructure upgrades, as well as green services, trade, and consumption.
According to an analysis of the catalogue by Fitch Group’s sustainability-focused analytics business Sustainable Fitch, the most notable changes from China’s current standards include the addition of the “green trade” and “green consumption” categories, reflecting an increase focus on areas across the green value chain beyond production, as well as a new secondary category, “Green and low-carbon transition of key industrial sectors”, enabling financing to be channeled to projects to help decarbonize hard-to-abate industries that are not yet considered green.
In the states
No states acted on ESG legislation last week
No states took action on ESG-related bills last week (since August 5). Click here to dive into Ballotpedia’s ESG legislation tracker.
On Wall Street and in the private sector
UBS quits NZBA
What’s the story?
UBS, Switzerland’s largest bank, announced Thursday it is leaving the Net-Zero Banking Alliance (NZBA), joining several recent global departures from the coalition.
Why does it matter?
UBS was a founding member of the NZBA and is the third major bank to leave in as many weeks. The departures could limit the alliance’s ability to set shared targets and monitor members’ progress toward climate goals.
What’s the background?
Click here for more on recent departures from NZBA.
Read more
According to ESG Dive:
UBS was a founding member of the NZBA in 2021. The financial institution said on Thursday it joined at a time when banks were working to cultivate decarbonization frameworks for financed emissions. Since then, the bank said it has developed and advanced its in-house capabilities in the area, but lauded NZBA for playing a “valuable role in helping banks establish initial target-setting frameworks.”
Earlier in March, UBS shared in its annual sustainability report that it had delayed its target to reach net-zero emissions across its own operations from 2025 to 2035. At the time, the bank attributed the delay to its “enlarged corporate real estate portfolio,” following an acquisition of Credit Suisse, and updated regulatory guidance.
The deferred decarbonization timeframe came a month after HSBC announced it was delaying its net-zero emission goal by 20 years, from 2030 to 2050.
In the spotlight
Thompson Reuters issues mid-year ESG assessment
What’s the story?
Thomson Reuters released its mid-year ESG assessment, reviewing U.S. market and political developments and comparing them with its forecasts from earlier this year.
Why does it matter?
Thomson Reuters uses its ESG assessments to guide clients on market and policy trends. In its mid-year update, the firm said some forecasts missed the mark—such as the pace of ESG integration into business models—while others, including the rise of governance issues and sustained political debate, aligned with its earlier predictions.
Read more
According to Thomson Reuters:
Corporate governance has become more critical but for different reasons — The importance of corporate governance has increased significantly in 2025, driven by unexpected factors like AI adoption uncertainty, geopolitical complexity, and tariff impacts rather than just traditional ESG concerns.
ESG integration into core business strategy remains limited — The prediction that most companies would fully integrate ESG into their core business strategies proved overly optimistic, with only 21% of CFOs now saying their companies are working toward full integration. …
[B]y mid-2025, certain forecasts have altered. While companies are still moving forward with their sustainability strategies, few are taking advantage of the opportunity to use sustainability as a strategic lens for competitive advantage. In addition, many are narrowing their material impacts, risks, and opportunities to only those that are core to their business strategy and operations. In other words, they are maximizing material opportunities and mitigating material risks even as their traditional governance responsibilities are unlikely to change.