Sustainability & ESG Trends 2025 (Clifford Chance)

Summary

• In August 2024 the Australian Securities & Investments Commission ordered Mercer Superannuation to pay AUD 11.3 million for misleading statements about the sustainable nature of some investment options.p.8
• In April 2024 the European Commission and EU consumer authorities began actions against 20 airlines over claims that CO2 emissions could be offset.p.8
• In August 2024 Japan's first climate lawsuit was launched seeking to limit CO2 emissions of ten utility companies.p.8
• In 2025 two significant regulatory developments are expected: the EU Omnibus proposal and a potential SFDR 2.0 legislative proposal.p.5
• 2024 was a landmark year for debt for nature swaps, with transactions advised for Barbados, Ecuador, El Salvador and The Bahamas.p.6
• The French government is advocating a two-year postponement of the CSRD.p.4

Key insights

1. Global regulatory and disclosure requirements such as the CSRD and CSDDD are already kicking in, so a significant walk-back from sustainability commitments is unlikely to be practical.p.3
2. Greenhushing is a growing trend, with companies less vocal about climate commitments and DE&I.p.3
3. Private capital is targeting infrastructure and transition technologies including solar, wind, hydrogen and carbon capture and storage.p.5
4. The COP29 consensus on Article 6 of the Paris Agreement has dismantled long-standing barriers to the growth of Article 6 carbon markets.p.5
5. Blended finance holds considerable promise for scaling sustainable finance, but there is no standardised approach.p.6
6. Standardised sustainability clauses in M&A documents remain elusive, with conditions precedent and MAC triggers tailored to specific deals.p.7
7. Greenwashing claims are prevalent across aviation, financial services and consumer goods.p.8