In recent months, the sustainable finance framework has continued to evolve, but at a contrasting and increasingly polarised pace. While international standards such as those of the ISSB are gradually being established and consultations on transition plans and nature-related risks are multiplying, certain signals point to a slowdown in regulatory ambition. In Europe, the debates surrounding the CSRD illustrate this shift, while in the United States, the SEC is revising its draft on several ESG proposals.
In this volatile environment, public consultations – such as the one launched by the European Commission on the evolution of the SFDR – are becoming strategic forums for redefining the balance between climate ambition, operational constraints and competitiveness.
In recent months, the regulatory framework for sustainable finance has continued to evolve rapidly. On the one hand, international frameworks such as the ISSB standards are gradually being established and consultations on climate transition plans and nature-related risks are multiplying, reflecting a global effort to bring structure to the field. On the other hand, the pace and ambition of certain regulations are showing signs of slowing down. In Europe, the ‘Omnibus’ reform package illustrates this shift by simplifying several existing texts, notably the CSRD, in the name of competitiveness and reducing administrative burdens. Internationally, other major jurisdictions are adopting an even clearer position. In the United States, the SEC has abandoned several major ESG rule proposals and scaled back the ability of shareholders to put ESG resolutions on the agenda of general meetings, marking a step backwards on key shareholder pressure mechanisms. This contrasts sharply with the previous phase of regulatory intensification and highlights a moment of reconfiguration in sustainable finance, where climate ambitions, regulatory costs and political issues are now more directly confronted.
In this context, both in Europe and the United Kingdom, many regulators and market organisations have launched public consultations to gather the views and expertise of market participants. These consultations, which cover topics ranging from transition plans to ESG transparency, biodiversity and governance, offer financial institutions the opportunity to influence the formulation of the standards and requirements that will shape the next phase of sustainable finance.
The consultations are of major interest to market participants, enabling them to identify key issues and emerging trends in sustainable finance, while providing insight into upcoming regulatory developments. They also provide a forum for gathering the opinions of the various stakeholders involved: regulators, institutional investors, asset managers, as well as NGOs and civil society organisations, enabling a better understanding of the points of convergence and divergence on complex issues such as climate and biodiversity.
At WeeFin, we pay particular attention to these consultations. They enable us not only to anticipate future trends and developments in sustainable finance, but also to position ourselves proactively in line with our mission to promote a more transparent and demanding vision of sustainable finance.
In 2025, the TNFD emphasised the need for investors and insurers to identify and disclose dependencies and impacts on nature in their portfolios, proposing standardised methodologies to make information comparable and actionable (TNFD – Dependencies and Impacts in Financial Portfolios).
At the same time, the United Kingdom is exploring the implementation of credible climate transition plans, requiring companies and financial institutions to publish clear emission reduction trajectories, detail the scenarios used and make their mitigation measures transparent (UK Transition Plan Consultation).
These issues also extend to prudential supervision, as shown by the EIOPA consultation on biodiversity, which asks insurers how they can integrate these risks into their internal models and solvency processes (EIOPA – Biodiversity Risk Management, Solvency II), as well as the EBA's consultation on amended guidelines on internal governance, which aims to strengthen standards for banks in terms of risk management and internal control (EBA – Amended Guidelines on Internal Governance).
European banks and insurers, for their part, are invited by the EBA and the Bank of England to integrate ESG, climate and biodiversity-related risks into their scenario analyses and stress tests in order to measure their exposure and strengthen their resilience (EBA – ESG Risks in Financial Stress Tests, EBA – ESG Scenario Analysis Guidelines, BoE – Climate-related risk approaches).
These consultations reflect a strong dynamic: sustainable finance is no longer just a matter of reporting or communication, it is becoming an instrument of anticipation and resilience, where transparency, methodological rigour and alignment with climate and environmental objectives are now at the heart of the expectations of regulators and markets.
Faced with accelerating regulatory and societal expectations, WeeFin advocates a gradual and pragmatic integration of ESG risks, adapted to the diversity of financial players.
In our view, the key lies in striking a balance between ambition — with the systematic publication of climate transition plans, which ensure transparency and comparability — and proportionality, by adjusting requirements to the size, sector and operational capabilities of each player.
For ESG stress testing, we recommend a step-by-step approach: start with climate and biodiversity risks, using robust sector indicators and specialised tools (such as ENCORE or the SBTN Materiality Screening Tool), before broadening the scope.
This gradual approach makes it possible to strengthen internal systems and skills in parallel, without sacrificing action for data perfection.
This is where the challenges remain: data imperfections, particularly on biodiversity, must not paralyse action. We encourage stakeholders to cross-reference sources, invest in rigorous quality controls, and complement these efforts with shareholder engagement and innovative technological solutions. The challenge? Gradually integrating these issues – biodiversity, climate adaptation, social risks – into governance, allocations and analyses, in order to better anticipate risks, limit greenwashing and build sustainable resilience.
At the heart of many debates in different countries, consultations on regulatory frameworks, particularly taxonomies and SFDR regulation, reflect regulators' efforts to clarify and harmonise the rules governing sustainable investments, in an attempt to bring both consistency and simplicity to reporting requirements. The European Union has launched several consultations to revise and simplify the European taxonomy framework, including the Environmental Delegated Act (EU Taxonomy – Environmental Delegated Act Review) and amendments aimed at making reporting simpler and less costly for companies (Taxonomy Delegated Acts simplification). These initiatives are accompanied by a revision of the SFDR rules, intended to clarify transparency requirements for financial actors (Revision of EU rules on SFDR).
In the United Kingdom, the consultation on the Green Taxonomy reflected the same ambition to align financial products with clear and harmonised environmental criteria (UK Green Taxonomy Consultation). These initiatives are complemented by the report from the EU Sustainable Finance Platform, which serves as a platform for discussion and synthesis of best practices and challenges encountered by stakeholders in the implementation of taxonomy rules (EU Sustainable Finance Platform – Taxonomy Report 2025).
Financial players need stability and consistent frameworks. A recent study by Morningstar (Voice of Asset Owner, 2025) highlights that institutional investors increasingly value standardised frameworks, which facilitate comparative assessment and integration into decision-making processes.
In this context, all of these consultations demonstrate a clear desire: regulators are seeking to strengthen the consistency and comparability of ESG information, reduce administrative burdens and give investors and companies the tools to identify truly sustainable investments.
The European Taxonomy remains a key tool for objectifying sustainability, but its use remains declarative and limited by complex technical criteria, restrictive thresholds and a binary approach. Its scope has also been reduced by the Omnibus package, further limiting its role as a real lever for capital allocation. To make it fully operational, we recommend a three-dimensional taxonomy: green, brown and transition activities. Such a taxonomy would broaden the scope of activities covered while simplifying reporting and clarifying technical criteria, in order to encourage adoption by asset managers and better reflect economic reality.
At the same time, WeeFin supported the idea of a UK Green Taxonomy, which could have avoided the pitfalls of the European Taxonomy by providing scientific, granular and actionable criteria at the activity level, useful for directing capital flows, limiting greenwashing and guiding investment decisions.
As for the SFDR Regulation, we have advocated for a structural overhaul that would enhance the transparency, comparability and credibility of ESG funds. According to WeeFin, Article 8 and 9 funds must differ significantly from conventional funds, through a universal basis of transparency, third-party validation and minimum requirements for exclusions and engagement, which is fairly well reflected in the second version of the SFDR as proposed at the end of 2025.
Engagement is positioned as an essential lever for sustainable finance. Recent consultations emphasise the need to clarify regulators' expectations, enhance the transparency of practices and ensure that shareholders play an active role in the sustainable transition of companies.
In the United Kingdom, the FRC has launched a consultation for the UK Stewardship Code 2026, which sets out new requirements for shareholder engagement, responsible investment policy and reporting on stewardship practices (FRC – UK Stewardship Code 2026 Guidance, FRC – Stewardship Code Consultation). This code aims to provide a clear and consistent framework for asset managers and funds, while promoting the systematic integration of ESG criteria into investment decisions
At WeeFin, we supported the revision of the UK Stewardship Code by emphasising long-term value creation and compliance with fiduciary duty. We reiterated the importance of using practical guidelines to ensure consistency and comparability, as well as the formalisation of bilateral or collaborative escalation processes. Gradual implementation, accompanied by education and transition periods, will be essential to ensure effective adoption of the Code by market participants.
ESG reporting and accounting standards provide investors and regulators with reliable, comparable and actionable information on companies' environmental, social and governance practices. The IFRS is working to strengthen and harmonise SASB standards internationally in order to facilitate the integration of ESG data into financial decisions (IFRS – Enhancing SASB Standards).
In Europe, the consultation on the Amended ESRS Exposure Draft – July 2025 stands out for its ambition to simplify and streamline reporting (Amended ESRS Exposure Draft – July 2025 Public Consultation Survey). In response to feedback from companies, this consultation proposes to substantially reduce the amount of mandatory data, clarify the structure of the standards, and introduce relief mechanisms for cases where reporting would be excessively costly or complex, while maintaining the consistency and transparency of the information published.
WeeFin takes a pragmatic but vigilant stance on “Omnibus”. We oppose an excessive reduction in reporting requirements, believing that a high level of data is essential to strengthen the ESG resilience of companies, improve the quality of data available on the market and preserve European competitiveness, particularly in relation to other frameworks such as the SFDR. Furthermore, while WeeFin strongly advocates maintaining dual materiality in order to ensure the transparency and credibility of the system, we support harmonisation with ISSB international standards as far as possible. Therefore, rather than an exemption in the event of missing data, we recommend the regulated use of estimates and proxies, with methodological transparency and the publication of coverage rates, in order to reconcile feasibility and comparability.
Finally, several consultations reflect the evolution of sustainable finance towards a more transparent and stakeholder-centric vision, whether ESG data providers, companies or end investors. Recent consultations aim to improve the reliability of external ratings and assessments, strengthen the traceability and quality of social and labour rights data, and better understand investors' journey into sustainable products.
ESMA, for example, is consulting the market on rules applicable to ESG rating providers and external reviewers in order to improve the consistency, comparability and credibility of assessments that inform investment decisions (ESMA – Rules ESG Rating Providers, ESMA – Rules External Reviewers European Green Bonds).
At the same time, social reporting is becoming a central focus, with consultations on standards relating to labour rights, working conditions and the social impact of companies' activities (GRI – Labour Topic Standards Development). These initiatives aim to provide reliable and comparable data so that investors can integrate social considerations into their decisions and encourage more responsible practices.
Finally, several regulators are seeking to better understand the customer journey of investors, particularly how they perceive and use ESG information to guide their choices (ESMA – Call for evidence on the retail investor journey). The aim is to enhance the transparency, clarity and effectiveness of sustainable financial communications, so that labelled or sustainable products truly reflect their commitments and performance.
Overall, these consultations reflect a strong trend towards making ESG, social and customer journey information more reliable and standardised, while empowering the various players in the financial chain. The ambition is clear: to make sustainable finance more credible, understandable and actionable for investors, companies and regulators alike.
At WeeFin, we support ESMA's ambition for transparency through the ESG Ratings Providers regime, in particular methodological disclosures and standardised templates, which are essential for improving comparability and securing the use of data, particularly in the context of SFDR and CSRD reporting. We remain cautious about creating excessive barriers to entry, particularly through equivalence, recognition or endorsement regimes for non-European players, which could reduce the diversity of providers in the market, particularly affecting the “smaller” providers. Diversity of providers remains necessary.
With regard to retail investors, we emphasise the importance of a simplified and focused approach, with accessible and educational indicators rather than technical exhaustiveness, to better guide investment choices and strengthen confidence in sustainable finance.
The year 2026 is once again shaping up to be decisive on all of the issues discussed above. The future of SFDR 2.0 remains at the centre of discussions, with upcoming consultations expected to clarify the direction and opportunities for simplifying the framework. At the same time, the entry into force of ESG Ratings in Europe will mark an important turning point for the transparency and comparability of ESG ratings.
Climate and transition-related issues, particularly physical risks, will continue to dominate the agendas of financial players, while the gradual adoption of ISSB standards continues around the world. By the end of the year, a decision could be made on a possible standard for nature-related risks, while TNFD has ceased its activities. Another ISSB project focuses on human capital, a sign that the social pillar, long considered the ‘poor relation’ of ESG, could finally become a central topic in upcoming regulations.
For more information on upcoming regulatory deadlines, please see our 2026 Regulatory Calendar published last month.
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