Climate and Energy: EU Policy and Regulation Update for 20 March 2025
March 20, 2025
Introducing Cleary’s Climate and Energy EU Policy and Regulation Update, our enhanced bi-monthly newsletter, replacing our Climate and the Financial Sector Newsletter and covering key developments in climate-related regulation, litigation, and enforcement across Europe.
As policy and regulatory landscapes evolve, this publication will provide insights to navigating emerging risks and opportunities in the energy transition.
Sustainability Omnibus Package
- French Senate adopts financial law proposal incorporating simplification amendments linked to the European Sustainability Omnibus package.
- French Asset Management Association warns against the potential impact of the Sustainability Omnibus package on data quality.
- Italian Ministry for the Economy publishes decree on rules for being authorised to provide sustainability reporting assurance.
- European Commission’s notice on Taxonomy Regulation delegated acts published in Official Journal.
- SBTi publishes draft of its revised Corporate Net-Zero Standard for consultation.
- FCA publishes statement on sustainability rules and investment in UK defence.
- CONSOB adopts amendments to the Issuers’ Regulation on sustainability reporting.
- ESMA publishes compliance table on the Guidelines on funds’ names using ESG or sustainability-related terms.
- EIOPA Chairperson addresses management of climate-related financial risks at Sustainable Finance Conference.
- NGOs lodge claim against Carrefour before the Paris Judicial Court, alleging breaches to its duty of vigilance.
Sustainability Omnibus Package
10 March 2025 [France] – French Senate adopts financial law proposal incorporating simplification amendments linked to the European Sustainability Omnibus package
The French Senate voted to adopt a law proposal concerning various provisions of adaptation to European Union law in economic, financial, environmental, energy, transports and health matters (the “DDADUE Proposal”, available here, in French only). The initial text of the proposal had been adopted by the National Assembly on February 17, 2025.
In this context, the French government tabled several amendments linked to the recent Sustainability Omnibus package published by the European Commission on February 26, 2025 and aimed at streamlining the EU’s ESG framework through substantial simplification of existing legislation.
In particular, the French legislator had introduced criminal sanctions targeting in-scope entities’ managers who failed to apply certain CSRD rules, in the December 6, 2023 Order transposing CSRD. During the Senate session on March 10, 2025, the French government proposed – and the Senate adopted – amendments aimed at removing those sanctions, which are not provided for by the initial CSRD text.
Additionally, the Senate confirmed a 4-year postponement of reporting requirements under CSRD for in-scope entities, from financial year 2025. A joint committee (Commission Mixte Paritaire) will now have to agree on a final aligned version of the proposal, after which the final text may be promulgated.
13 March 2025 [France] – French Asset Management Association warns against the potential impact of the Sustainability Omnibus package on data quality
The AFG, a French professional association dedicated to asset management, published a statement supporting the simplification efforts of the Sustainability Omnibus package, while warning about access to reliable ESG data for investors [full statement available here].
The statement outlines that such a simplification must ensure a level playing field for European companies internationally “by immediately and significantly reducing the number of reporting requirements”, and sets forward recommendations. The AFG also noted that this simplification should not impede investors’ access to high-quality ESG data. In particular, the AFG said it regretted the extent to which the reporting thresholds had been raised, “excluding too many companies from the CSRD directive”, and thus increasing the investors dependence on unregulated external data providers.
General Regulatory
3 March 2023 [Italy] – Italian Ministry for the Economy publishes decree on rules for being authorised to provide sustainability reporting assurance
On 3 March 2025, the decree of 19 February 2025 issued by the Ministry of Economy and Finance (MEF) was published in the Italian Official Journal [link, in Italian]. The decree establishes the rules for auditors and auditing firms applying for authorisation to conduct assurance of sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) and the relevant Italian transposing decree.
The decree defines in detail:
- the requirements for authorisation;
- the content of the application for authorisation;
- the procedure for submitting the application for authorisation;
- the application fee;
- the procedure for the examination of applications and authorisation by the MEF;
- the effective date of authorisation (from the date of the granting of the authorisation);
- the procedure for requesting voluntary cancellation from the register; and
- the content, methods and terms of transmission of updated information to be provided by those already authorised.
5 March 2025 [EU] – European Commission’s notice on Taxonomy Regulation delegated acts published in Official Journal
A European Commission notice on the interpretation and implementation of certain legal provisions of the Taxonomy Regulation delegated acts [available here] was published in the Official Journal of the European Union. The notice contains technical clarifications on frequently asked questions.
The notice is organized in 9 sections, relating to general queries, queries on the different objectives of the Taxonomy Climate Delegated Act (climate change mitigation and adaptation), the different objectives of the Taxonomy Environmental Delegated Act (water and marine resources, transition to a circular economy, etc.), queries on the generic do no significant harm criteria, and queries on the Taxonomy Disclosures Delegated Act.
18 March 2025 [International] – SBTi publishes draft of its revised Corporate Net-Zero Standard for consultation
The Science Based Targets initiative (SBTi) published an initial draft of its revised Corporate Net-Zero Standard for public consultation [available here]. This proposal sets forward major revisions to the March 2024 Corporate Net-Zero Standard [available here], presented by the SBTi as the world’s only framework for corporate net-zero target setting in line with climate science. Amongst revisions, the draft proposes to:
- Tackle Scope 3 emissions reductions by putting a focus on direct suppliers and/or those in emissions-intensive sectors to align with net-zero.
- Introduce an assessment and communication of progress against targets requirement, to enhance accountability.
- Introduce streamlined requirements reflective of capabilities, i.e., simplified requirements for medium-sized companies in developing markets, and SMEs.
The public consultation will run from 18 March - 1 June 2025.
Banking
10 March 2025 [Italy] – Bank of Italy publishes a study on ESG-linked CEOs’ remuneration in major EU economies
On 10 March 2025, the Bank of Italy published a study focusing on ESG objectives for the purposes of remuneration of CEOs [link, in Italian]. The report provides a comparative analysis of the adoption of ESG-links remuneration plans in listed companies between 2018 and 2022 across the four main economies of the European Union (i.e., France, Italy, Germany and Spain).
The inclusion of ESG in CEO remuneration plans has become increasingly common, particularly among larger companies, giving rise to a debate over their effectiveness in driving sustainability and the potential risks to companies’ financial performance. The study thus examines the evolution of ESG-based remuneration, analyzing how remuneration practices are linked to target achievement rates and economic performance data.
In Italy, as of 2022, the number of companies (82.5%) incorporating ESG factors into variable remuneration plans remains lower than in other major EU economies. However, Italian companies tend to set a higher number of ESG targets on average (3.3 per company). The analysis also shows that ESG targets are almost always achieved by CEOs, without affecting the performance of companies. However, there are still doubts on the effectiveness of the remuneration of CEOs in promoting sustainability factors, given the widespread use of selective target-setting and potential greenwashing practices.
Asset Management
11 March 2025 [United Kingdom] – FCA publishes statement on sustainability rules and investment in UK defence
The British Financial Conduct Authority (FCA) published a statement setting out its position on sustainability rules in the context of UK defence [available here], aimed at clarifying that such rules do not prevent investment in or finance for defence companies.
The statement outlined that sustainable finance rules target firms providing financial products/ services, along with some listed companies, and aim at improving the quality and reliability of sustainability-related information in the market. They do not intend to prescribe which activities may or may not be deemed sustainable.
The FCA reaffirmed that those sustainability rules do not require financial institutions to treat defence companies differently, nor should they be confused with financial institutions’ own policies relating to the type of businesses they wish to support and their own appetite for risk. Finally, the FCA emphasized that there are no FCA sustainability rules stopping banks from serving defence clients. For instance, while certain benchmarks portfolios may not include companies involved with controversial weapons, it is still up to firms to choose whether to use these benchmarks.
12 March 2025 [Italy] – CONSOB adopts amendments to the Issuers’ Regulation on sustainability reporting
Following a public consultation, on March 12, 2025, the Italian Financial Market Authority (CONSOB) adopted Resolution No. 24463 [link, in Italian] introducing specific amendments to the Issuers’ Regulation (Resolution No. 11971/1999, as amended) concerning corporate sustainability reporting, These amendments, which will become effective upon publication in the Italian Official Journal, are intended to implement the Italian Consolidated Law on Finance (Legislative Decree No. 58/1998), as amended by Legislative Decree No. 125/2024, which transposes the Corporate Sustainability Reporting Directive (CSRD).
In particular, the amendments to the Issuers’ Regulation concern:
- the introduction of Art. 89-quinquies, setting out procedures and terms of CONSOB’s supervision over sustainability reports published by listed companies established in Italy (in line with the mandate under Art. 118-bis of the Italian Consolidate Law on Finance); and
- the introduction of an ad hoc Scheme (no. 3), referred to under Art. 154-bis of the Italian Consolidate Law on Finance and added to Annex 3C-ter thereof, to be used for the purposes of the declaration concerning the compliance of the sustainability report with the CSRD and the Italian transposing decree (in line with the mandate under Art. 154-bis of the Italian Consolidate Law on Finance).
Finally, in adopting these amendments, CONSOB has also taken into account the principle of proportionality, reflecting the broader EU regulatory developments on sustainability reporting, particularly the recent Omnibus proposal.
19 March 2025 [EU] – ESMA publishes compliance table on the Guidelines on funds’ names using ESG or sustainability-related terms
The European Securities and Markets Authority (ESMA) published a compliance table (available here) describing how National Competent Authorities currently comply or intend to comply with the ESMA’s Guidelines on funds’ names using ESG or sustainability-related terms, which were published on August 21, 2024 (Guidelines available here).
Amongst Member States, only the Czech Republic is listed as not complying, as the existing legal order lacks a sufficient legal basis to require fund managers to meet the specific thresholds. Bulgaria, Hungary, Latvia and Lithuania are listed as “intending to comply”, while the remaining Member States have all already complied.
Insurance
13 March 2025 – EIOPA Chairperson addresses management of climate-related financial risks at Sustainable Finance Conference
The European Insurance and Occupational Pensions Authority (EIOPA) published a keynote speech [available here] delivered by Petra Hielkema (EIOPA Chairperson) during the EIOPA Sustainable Finance Conference, which took place on March 13, 2025 in Frankfurt Germany.
Ms. Hielkema, drawing on the conference’s theme – Driving Resilience and Action in a Warming World – set forward concrete actions aimed at strengthening European’s financial systems against mounting climate pressures, amongst which:
- Bridging the insurance protection gap, i.e., increasing insurance coverage for natural catastrophes to mitigate economic losses.
- Promoting impact underwriting, i.e., encouraging insurers to integrate climate adaptation incentives into policies
- Implementing risk transfer mechanisms, i.e., expanding the use of catastrophe bonds and reinsurance to spread financial risk.
- Improving climate risk assessment, i.e., updating catastrophe risk calibration within Solvency II based on recent data.
Ms. Hielkema also supported aligning reporting requirements with broader EU simplification efforts, while still ensuring high-quality data collection, and ensuring that climate resilience supports long-term financial stability.
Litigation
17 March 2025 – NGOs lodge claim against Carrefour before the Paris Judicial Court alleging breaches to its duty of vigilance
The NGOs Bloom and Foodwatch have lodged a claim against global retailer Carrefour before the Paris Judicial Court (Tribunal Judiciaire), alleging failure to fulfil its duty of vigilance.
Bloom simultaneously published a report on what it called an “avoidance strategy” from the retailer. The report targets the health risks linked to mercury consumption, and alleges the use of destructive fishing methods, along with human rights violation in the tuna industry.
Please find the joint press release at the following link.