U.S.: NYC Pension Funds To Drop Asset Managers Lacking Strong Net Zero Plans
On April 22, 2025, New York City Comptroller Brad Lander announced standards for evaluating the net zero plans of asset managers for the City’s pension funds. According to the announcement, asset managers that refuse to submit their plans or fail to satisfy the Comptroller’s requirements risk having their “investment strateg[ies] put out to bid.”
The standards set out an expectation that asset managers’ net zero plans, which are due June 30, 2025, at a minimum: (i) “engage portfolio companies to drive real economy decarbonization, not just portfolio decarbonization”; (ii) “incorporate material climate change-related risks and opportunities in investment decision making”; and (iii) “ensure a robust and systematic stewardship strategy that addresses prioritization and escalation of engagement and voting to advance decarbonization.” Additionally, asset managers should set expectations for their portfolio companies to measure their Scope 1 and 2, as well as their material Scope 3, emissions; set clear net zero goals; adopt a transition plan that details how climate goals will be met; align their future capital expenditures and lobbying efforts with climate goals; and consider the impact of a lower-carbon business model on workers and communities.
According to Comptroller Lander, the “new standards demand that the retirement system’s managers strengthen their Net Zero plans consistent with their fiduciary duty—or [the pension funds and the Office of the Comptroller] will find new asset managers who will.”
The pension funds—including the New York City Employees Retirement System, the Teachers Retirement System, and the Board of Education Retirement System—are collectively the fourth largest in the United States, with approximately $280 billion in assets under management. The New York City Comptroller is the investment advisor to and custodian of the assets of the City’s pension funds.
Links:
Press Release
Announcement
Comptroller Climate Transition Plan
EU: ESMA Publishes Draft Regulatory Technical Standards under ESG Ratings Regulation
On May 2, 2025, the European Securities and Markets Authority (the “ESMA”), the EU markets regulator, published draft Regulatory Technical Standards (the “RTS”) under the ESG Ratings Regulation.
The ESG Ratings Regulation applies to ratings opinions regarding a company’s or financial instrument’s sustainability, societal, and environmental impacts and risk exposure. The ESG Ratings Regulation gives ESMA authority to regulate ESG ratings providers that operate in the EU.
The draft RTS provide:
- information required for ESG ratings providers’ applications for authorization to operate in the EU;
- measures and safeguards to be implemented by ESG ratings providers that also carry out other activities to mitigate risks regarding conflicts of interest; and
- guidance on the information that ESG ratings providers must disclose.
The draft RTS are open to comments by June 20, 2025. ESMA then will have to submit the draft RTS to the European Commission by October 2, 2025.
Links:
RTS Consultation Paper
ESG Ratings Regulation
EU: European Banking Authority Launches ESG Dashboard To Track Climate Risk in Banking Sector
On April 25, 2025, the European Banking Authority (the “EBA”) launched an ESG dashboard tracking various indicators of climate-related transition and physical risks. The dashboard uses information disclosed by banks as part of their mandatory regulatory ESG disclosures of climate-related risks and actions they have taken to mitigate them. The dashboard aims to facilitate the assessment and monitoring of ESG risks across the European banking sector.
EBA data indicates that EU and European Economic Area banks are substantially exposed to companies from sectors significantly contributing to climate change—the exposure for banks is above 70% in most countries. However, the data also shows an exposure of below 30% in most countries to areas subject to heightened climate-related physical risk (i.e., the risk of physical climate impacts such as changes in temperature, coastal and soil erosion, wildfires, cyclones, and drought).
The dashboard supports the European Commission’s commitment to monitor systematically climate-related financial stability risks, in line with the Paris Agreement. The EBA intends to update and amend the indicators on an ongoing basis.
Links:
ESG Dashboard
EBA Press Release
Qatar: Central Bank Publishes Mandatory Sustainable Finance Framework
On April 20, 2025, the Qatar Central Bank published its 2025 Sustainable Finance Framework (the “Framework”), which applies to any type of credit in Qatar that finances ESG projects, including Sharia-compliant credit instruments.
The Framework, mandatory for all banks operating in Qatar, establishes “implementation principles” setting out the core components for sustainable credits (defined as any type of credit exclusively financing green, social, or sustainable projects) and sustainability-linked credits (defined as credits linked to the borrower’s performance, measured by reference to certain targets). In particular, the Framework requires that, among other things:
- projects provide clear environmental and social benefits, to be assessed and, where feasible, quantified by the borrower;
- sustainable finance borrowers communicate certain information with lenders, including, for example, the sustainability objectives of projects, and information on how the borrower identifies and manages risks;
- borrowers produce an annual report on their sustainable loans, including information on the expected and achieved impact of financed projects, using both qualitative and quantitative performance indicators, if possible;
- for sustainability-linked credits, borrowers obtain third-party verification of their progress towards meeting the targets; and
The Framework was published as part of Qatar’s National Vision 2030, announced in 2008. In addition to the Framework, the Qatar Central Bank published Environmental, Social and Governance Supervisory Principles for Banks, which encourage banks to report climate, environmental, or social risks in line with the International Sustainability Standards Board’s standards.
Links:
Qatar Central Bank: Sustainable Finance Framework
Circular No. 2025/0001546
Environmental, Social and Governance Supervisory Principles (For Banks) 2024/0001527
Canada: Securities Regulator Pauses Development of Mandatory Climate Reporting Requirements
On April 23, 2025, the Canadian Securities Administrators (the “CSA”)—the council of Canada’s provincial and territorial securities regulators—announced a pause in developing a new mandatory climate-related disclosure rule, as well as in planned amendments to existing diversity-related disclosure requirements. The CSA cited rapid and significant changes to the global economic and geopolitical landscape, including in the United States, as a primary driver of the decision.
Existing securities legislation, including National Instrument 51-102, requires Canadian issuers to disclose material climate risks. In addition, under National Instrument 58-101, certain listed companies must disclose the representation of women on boards and in executive officer positions. These requirements remain in force. In December 2024, the Canadian Sustainability Standards Board (the “CSSB”) issued sustainability standards that provide a voluntary framework for sustainability and climate-related disclosures. The CSSB standards are generally aligned with standards issued by the International Sustainability Standards Board.
The CSA stated that it plans to monitor domestic and international developments regarding climate- and diversity-related disclosures and will reassess the proposed mandatory requirements in the future.
Link:
CSA Press Release
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