Climate and Energy: EU Policy and Regulation Update for 12 November 2025
November 12, 2025
As policy and regulatory landscapes evolve, this publication will provide insights to navigating emerging risks and opportunities in the energy transition. Read previous issues here.
Sustainability Omnibus Package
- JURI Committee receives open letter questioning the legal standing of the Omnibus proposal
- EFRAG publishes Final Comment Letter on IASB’s request for information on IFRS 16’s implementation
- ESAs publish updated SFDR Q&A on PAI disclosures
- European Union to reaffirm climate commitment at COP30
- TNFD publishes recommendations for upgrading nature data for market participants
- Commission’s proposed amendments to the SFDR leaked ahead of official publication
- TNFD welcomes ISSB decision to move into a standard-setting process on nature-related risks and opportunities
- Commission Delegated Regulation postponing ESRS disclosure requirements published in the EU Official Journal
- 16 U.S. Attorneys General send letter to Tech companies, urging them to forgo compliance with the CSRD and CSDDD
- Banque de France publishes working paper on the impact of green regulation on firm’s innovation
- The Bank of Italy publishes a survey on how Italian firms manage climate-related risks
- Italy is adopting a Legislative Decree transposing the EU Directive on empowering consumers for the green transition
Sustainability Omnibus Package
10 November 2025 [EU] – JURI Committee receives open letter questioning the legal standing of the Omnibus proposal
The Committee on Legal Affairs of the European Parliament (JURI Committee) received a letter signed by law professors and law practitioners, urging it to seek a legal opinion on the Sustainability Omnibus proposal [full letter available here].
The letter notes that the proposal may infringe upon fundamental principles of EU law, i.e., the principle of proportionality and the non-regression principle. In that context, the letter refers to two legal opinions on the substantive and procedural deficiencies associated with the proposal.
In particular, the signatories note that the proposal to raise CSRD thresholds and exclude listed SMEs lacks a comparative analysis of whether ongoing ESRS reforms could deliver equivalent relief without reducing reporting scope.
The letter emphasizes that the current proposal faces a high risk of legal challenges in national and EU courts. Related proceedings would in turn create legal uncertainty and impede competitiveness, while affecting the Union’s commitment to the rule of law and international obligations.
European Union/International
23 October 2025 [EU] – EFRAG publishes Final Comment Letter on IASB’s request for information on IFRS 16’s implementation
The European Financial Reporting Advisory Group (EFRAG) published its 17 October 2025 Final Comment Letter, responding to the International Accounting Standards Board (IASB) request for information on the post-implementation review of IFRS 16 Leases [full Final Comment Letter available here].
On 17 June 2025, the IASB had requested information on the implementation of the IFRS 16 standard. This included queries on whether the standard had met its objective and whether its core principles were clear.
EFRAG responded that IFRS 16 is generally working well and has largely met its objective of improving lease-related financial reporting. It however noted that ongoing costs for preparers remain high, particularly in lease-intensive sectors, driven by the need to maintain lease data and IT systems and to manage lease modifications. EFRAG also highlighted broader conceptual and application-related issues, along with uncertainties on the interaction with other IFRS standards.
4 November 2025 [EU] – ESAs publish updated SFDR Q&A on PAI disclosures
The European Securities and Markets Authorities (ESMA), European Banking Authority (EBA) and European Insurance and Occupational Pensions Authorities (EIOPA) (together, the “ESAs”) published an updated version of their consolidated Q&As on the SFDR and SFDR Delegated Regulation [full Q&As available here].
The question concerned Principal Adverse Impact (PAI) disclosures, and specifically the Article 6(2) SFDR Delegated Regulation’s requirement for financial market participants to describe actions taken or planned (or targets set) to “avoid and reduce” PAIs. The ESAs were asked to explain whether, in that context, financial market participants should include a description of the actions they will take if the PAI reaches a certain level.
The ESAs responded that, in order for that description to be fair, clear and not misleading, the financial market participant should, for each of the identified PAI, include or refer to (i) information on how the financial market participant assesses the need to take action (e.g. any relevant thresholds or criteria that trigger actions to mitigate the PAI), (ii) the actions taken the previous year and (iii) actions planned or targets set for the coming year.
5 November 2025 [EU] – European Union to reaffirm climate commitment at COP30
The European Commission published a press release on the European Union’s climate priorities at the COP30 meeting set to take place in Brazil from 10 to 21 November 2025 [full press release available here].
The EU will call for a collective response to the ambition and implementation gaps of climate targets, with Commission President Ursula von der Leyen stating “At COP30 this week, we will underline our strong commitment to the Paris Agreement. The global clean transition is ongoing and irreversible. It is our priority to ensure that this transition is fair, inclusive and equitable.”
Highlighted in the press release is the planned focus on climate finance. The “Baku to Belém Roadmap” to be presented by Azerbaijan and Brazil is expected to be “a strategic opportunity to scale up finance for developing countries to at least $1.3 trillion per year by 2035”. The EU and its Member States together provided in 2024 €31.7 billion from public sources and mobilized a further €11 billion in private finance.
6 November 2025 [International] – TNFD publishes recommendations for upgrading nature data for market participants
The Taskforce on Nature-Related Financial Disclosures (TNFD) published a set of eight recommendations for upgrading the nature data value chain for market participants [full recommendations here].
The recommendations cover both state-of-nature data used by companies in their assessment of nature-related issues as well as reported data produced by companies, for example about their impacts and dependencies on nature.
This includes (i) global nature data principles, (ii) common metadata requirements, (iii) harmonized data licensing and user agreements, (iv) a nature data public facility (NDPF), (v) incentives toward corporate nature data exchange, (vi) an international nature data trust, (vii) a nature measurement protocol and (viii) a universal digital protocol for sharing nature data across value chains.
6 November 2025 [EU] – Commission’s proposed amendments to the SFDR leaked ahead of official publication
The amendments to the SFDR that the European Commission had announced for 19 November 2025 were published by specialized media outlets ahead of schedule [full draft available here].
The draft introduces new categories of “sustainability-related financial products”, relying on a 70% threshold and specific minimum exclusions (for tobacco, controversial weapons, etc.):
- “Transition” category, with the proposed Article 7 SFDR setting criteria for claiming that a financial product has a transition-related objective.
- “Sustainability factors” category, with the proposed Article 8 SFDR setting criteria for claiming that a financial product integrates sustainability factors.
- “Sustainable” category, with the proposed Article 9 SFDR setting criteria for claiming that a financial product has a sustainability-related objective.
- “Mixed” category, with the proposed Article 9a SFDR setting criteria for claiming that a financial product combines financial products categorized as sustainability-related products.
In addition, it is proposed that Principal Adverse Impact (PAI) disclosures be (i) entirely removed at entity level and (ii) significantly reduced at product-level. This includes deleting the current Articles 4 and 5 SFDR and replacing them with minimum exclusions. This also includes removing investment advice and portfolio management from product-level requirements, and removing separate product website disclosure requirements.
7 November 2025 [International] – TNFD welcomes ISSB decision to move into a standard-setting process on nature-related risks and opportunities
The Taskforce on Nature-Related Financial Disclosures (TNFD) published a press release, welcoming the International Sustainability Standards Board (ISSB)’s decision to start a standard-setting process on nature-related risks and opportunities [full text available here].
The TNFD noted that, in compliance with its own recommendations, the ISSB has now signaled it would introduce new or modified disclosure requirements to meet common investor information needs following the findings of its biodiversity, ecosystems and ecosystem services (BEES) research considering nature-related risks and opportunities.
Emmanuel Faber, ISSB Chair, noted that “The ISSB recognizes that there is a clear investor need for information about nature-related risks and opportunities. Drawing on the TNFD framework enables us to meet this need efficiently, reducing fragmentation and building on leading practice.”
10 November 2025 [EU] – Commission Delegated Regulation postponing ESRS disclosure requirements published in the EU Official Journal
Commission Delegated Regulation amending Delegated Regulation (EU) 2023/2772 (i.e., the first set of ESRS) as regards the postponement of the date of application of the disclosure requirements for certain undertakings has been published to the European Union Official Journal [full text available here].
The new Delegated Regulation introduces an amendment allowing Wave 1 undertakings (i.e., those reporting on financial year 2024 under the current ESRS) to omit certain disclosures up until financial years 2025 or 2026 [for more detailed information on the amendments, please refer to our previous issue here].
10 November 2025 [International] – 16 U.S. Attorneys General send letter to Tech companies, urging them to forgo compliance with the CSRD and CSDDD
The Attorneys General of 16 U.S. States have cosigned a letter to two Tech companies, urging them to disavow the “unlawful” ESG and DEI mandates set forward in the CSRD and CSDDD [full letter available here and here].
The letter emphasizes that U.S. companies shall follow U.S. laws and regulations “no matter what European elites may think” and urges the companies to “immediately comply with America’s laws and the Trump Administration’s policies and disavow the DEI and ESG directives imposed by the CSRD and CSDDD.”
To that end, both companies are asked to respond within 30 days, explaining in detail the steps taken to “reject the EU’s anti-American-values CSRD and CSDDD directives.”
France
27 October 2025 [France] – Banque de France publishes working paper on the impact of green regulation on firm’s innovation
The Banque de France has published a working paper entitled “The impact of ‘green regulation’ on firm’s innovation” [available here], aimed at analyzing the effect of “green regulations” i.e., those aimed at mitigating the effects of climate change and environmental externalities, on innovation, using a regulatory database covering the period 2008-2022 for Spain.
Findings indicate that national level green regulations have a positive effect on innovation, whereas regional level regulations show mixed or negligible impacts. The working paper’s hypothesis with respect to regional-level regulations is that regulatory fragmentation due to unequal, overlapping, inconsistent or conflicting procedures across jurisdictions may diminish the positive effects identified with respect to innovation.
Italy
7 November 2025 [Italy] – The Bank of Italy publishes a survey on how Italian firms manage climate-related risks
On November 7, 2025, the Bank of Italy, within its Markets, Infrastructures and Payment Systems series, published a paper containing the evidence of a survey, titled “Do firms care about climate change risks? Survey evidence from Italy” [available here, in English].
The survey, conducted in 2024 on a sample of 577 non-financial corporations, examines how Italian firms manage climate-related risks and how these are reflected in creditworthiness assessments. In particular, the results identify significant shortcomings in governance, transition planning and emissions monitoring: only 44% of firms report measuring their greenhouse gas emissions, while 46% indicate that they have no governance structure specifically tasked with climate-risk management. The perception of physical risks also appears misaligned with actual exposure, as around 70% of respondents consider themselves at low or no risk despite operating in areas frequently affected by extreme weather events.
The Bank of Italy stated that the information collected will be used to enhance the assessment of climate-change risks and to integrate them into the Bank’s In-house Credit Assessment System (ICAS), in line with Eurosystem methodologies.
5 November 2025 [Italy] – Italy is adopting a Legislative Decree transposing the EU Directive on empowering consumers for the green transition
On November 5, 2025, the Italian Government approved a Legislative Decree transposing Directive (EU) 2024/825 on empowering consumers for the green transition through better protection against unfair practices and improved information [press release available here].
The decree regulates the use of “green claims”, introducing new protections and enforcement measures against unfair commercial practices related to the environmental and social sustainability of products. It extends the list of unfair commercial practices under the Italian Consumer Code to include vague or unsubstantiated environmental statements, as well as claims such as “carbon neutral” or “zero impact” not supported by clear, comparable, and verifiable evidence.
The Italian Competition Authority (AGCM) is responsible for monitoring compliance and imposing sanctions for breaches of the new provisions.
The decree now needs to be published in the Italian Official Gazette and will take effect 15 days after publication.