Other Notable Developments
SBTi Releases Corporate Net-Zero Standard: The Science Based Targets initiative (“SBTi”) has published its Corporate Net Zero Standard Version 2.0 (the “Standard”). The Standard is designed to assist companies in taking climate-related actions consistent with achieving net-zero greenhouse gas emissions by 2050 or sooner, contributing to international efforts to limit warming to 1.5°C. The Standard differs from the previous version in several ways, including by allowing companies to set and pursue targets on a best-efforts basis, with transparency over key assumptions and dependencies. The Standard also includes accommodations for small- and medium-sized companies, as well as companies in lower-income countries. Companies that commit to the Standard must produce annual reports and periodically assess their progress, barriers to implementation, and actions to address these.
U.S. Customs and Border Protection Releases Forced Labor Guidance: U.S. Customs and Border Protection (“CBP”) has released Operational Guidance for Importers regarding forced labor enforcement (the “Guidance”). The Guidance provides a consolidated overview of the three laws that CBP uses to prevent the importation of goods produced with forced labor into the United States, namely 19 U.S.C. 1307, the Uyghur Forced Labor Prevention Act, and the Countering America’s Adversaries Through Sanctions Act. Among other things, the Guidance explains the steps importers should take before importing goods into the United States and aims to help businesses and individuals exercise reasonable care to comply with U.S. forced labor laws, particularly when sourcing from supply chains with forced-labor risk.
EU: EBA Proposes Integrating Climate Risk into the 2027 EU-Wide Banking Stress Test
On June 11, 2026, the European Banking Authority (the “EBA”) published a draft methodology, templates, and template guidance for consultation in connection with its 2027 EU-wide banking stress test. Among the most notable proposed changes is the introduction of a climate risk module, reflecting the increasing integration of climate-related risks into EU prudential supervision.
Under the proposal, participating institutions would assess both transition and physical climate risks alongside the adverse macroeconomic scenario used in the stress test. Transition risk analysis would consider factors such as changes in climate policy, carbon pricing, and energy market developments, while physical risk analysis would consider the impact of severe river flooding events across the European Economic Area. The EBA has indicated that the climate risk module will initially operate as a stand-alone component and will not affect the core stress-test results.
In parallel, the EBA has proposed measures designed to reduce reporting burdens on participating institutions, including a substantial reduction in required data points and greater reliance on existing supervisory reporting frameworks. The 2027 exercise is expected to cover 63 banks, representing approximately 75% of the EU banking sector.
Link:
Press Release
UK: FCA Consults on Changes to TCFD Product-Level Reporting
On June 5, 2026, the UK Financial Conduct Authority (the “FCA”) launched a consultation on changes to its TCFD reporting regime, in particular to product-level reporting obligations. The consultation closed on July 13, 2026. It followed feedback that retail investors generally do not engage with these reports, institutional investors typically obtain climate data directly from the manager, and firms do not find product-level TCFD reporting a useful climate risk management tool.
Under the proposed changes, firms would instead be required to consider periodically whether climate risks and/or opportunities could be materially relevant to the financial performance or return of a product and, if so, disclose these risks and opportunities in communications intended for retail clients that provide general information on risk and financial returns. The FCA expects firms to be able to satisfy this assessment through their usual risk assessment procedures. In addition, the obligation to provide a TCFD product report on demand from clients would be replaced by an obligation for firms to respond to requests for climate-related information where the information is required for the client’s own climate-related disclosure obligations. Clients would be able to make such requests no more than once annually. Firms in scope may, but will not be required to, provide other metrics, if reasonably required by the client for their climate reporting. The requirement to produce entity-level reports for in-scope firms remains.
The consultation closed on July 13, 2026. The FCA has said it aims to finalize and implement the rule change in autumn 2026.
Link:
FCA Consultation
Global: ISO Launches Standard for Net-Zero Transition Planning by Financial Institutions
On June 4, 2026, the International Organization for Standardization (“ISO”) published ISO 32212:2026, “Sustainable Finance — Net Zero Transition Planning for Financial Institutions.” The standard offers financial institutions a framework for developing, implementing, maintaining and updating net-zero transition plans. Aimed principally at banks, insurers, investors, and capital markets participants, it focuses on how climate commitments are built into business planning, governance, risk management, and financing decisions.
ISO 32212 specifies requirements and recommendations for strategic transition planning, including establishing and implementing net-zero targets. It guides financial institutions through assessing their climate-related risks and opportunities, setting transition objectives and targets, assigning responsibility for delivery, and embedding those targets into day-to-day financial decisions. The standard also addresses governance, internal and external communication, and the periodic monitoring and review of transition plans. In practice, financial institutions and other market participants could use the standard to shape lending criteria, portfolio strategy, insurance underwriting, capital markets activity, product design, and engagement with clients.
Although voluntary, ISO standards give key stakeholders—including regulators, investors, and lenders—a common reference point for judging effective and credible net-zero transition planning. ISO 32212 may therefore influence how transition plans are assessed in practice, even where it is not incorporated into applicable laws or regulations.
Link:
ISO Standard
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