Global Sustainability Standards Update: What’s New in December 2025

Here’s a quick rundown of what's happening with sustainability rules around the world.

A few big things are going on today, mostly focused on the EU trying to make its sustainable finance rules simpler, the growing differences between how the US and EU handle climate disclosures, and the speedy creation of carbon markets over in Asia, particularly in India and Vietnam.

The latest on EU reporting and finance (ESRS, CSRD, SFDR)

The first batch of companies are now getting their 2024 reports ready using the EU's new Corporate Sustainability Reporting Directive. They're following the European Sustainability Reporting Standards, which are really changing how businesses across EMEA report their information and making them less reliant on just voluntary guides like GRI or separate TCFD reports. EFRAG is expected to give the Commission some technical advice on a "simplified ESRS" by early December 2025, which should make the rules easier to follow, especially for smaller companies.

The European Commission has also suggested some changes to the Sustainable Finance Disclosure Regulation. The goal is to make it easier for financial market players to classify things and report on them, which suggests they're aiming for a more streamlined system that works well with other regulations. These tweaks are meant to make product labels a lot clearer for investors, while still fitting in with the EU's broader Green Deal plans.

How global frameworks and the ISSB are shaping up

Globally, the IFRS S1 and S2 standards are really becoming the main baseline for everyone. S2 has pretty much taken over from TCFD by rolling its 11 climate recommendations into a single, tidy standard. A lot of companies are now using the ISSB's investor-focused standards right alongside ESRS or GRI so they can cover everything, from double materiality to what a wider range of stakeholders expect.

Data from late 2025 shows that SASB-based metrics are still on the rise, especially for reporting on performance in specific sectors. At the same time, GRI isn't being adopted as much in Europe now that ESRS is serving as the main all-in-one sustainability framework. Outside the EU, lots of places (like Canada and some Asian markets) are using ISSB-aligned standards as the model for their own upcoming mandatory rules, even if adopting them is still optional for now.

What's going on with climate disclosure rules (US, EU, and elsewhere)

In the US, things are a bit up in the air. The SEC has stopped defending its 2024 federal climate disclosure rules in court, so their future is uncertain. This creates a gap at the federal level, even while big states like California are pushing ahead with their own mandatory climate reporting starting in 2026. This is a big contrast to the EU, where CSRD and ESRS are firmly in place and will be rolled out to more companies in waves throughout the decade.

Over in the Asia-Pacific region, several countries are finalizing or testing out climate disclosure standards based on the four TCFD/ISSB pillars: governance, strategy, risk management, and metrics and targets. They're often phasing these in and starting with a focus on Scope 1 and 2 emissions. At the same time, regulators in places like Australia and New Zealand are tweaking who has to report and the liability directors face, sometimes reducing the number of companies required to report and easing up on personal liability for climate-related statements.

Carbon markets and pricing news (India, Vietnam, Article 6)

India is moving forward with its Carbon Credit Trading Scheme, making it the core of a national compliance carbon market. They're moving industrial sectors from the old Perform, Achieve, and Trade scheme to this new credit-based system starting in the 2026 fiscal year, using 2023–24 data as the starting point. A government update on December 1, 2025, highlighted that locking down the market rules is a top priority, and they're actively discussing ways to keep prices from bouncing all over the place.

Vietnam has released its main decree and plans for a pilot emissions trading system. The first allowances are supposed to be given out by December 31, 2025, and after that, the companies involved will know their caps and can start getting ready to trade. Policy experts are already saying that the rules for offsets and the caps themselves will likely get stricter in the future, which suggests they plan to ramp things up after the 2025–2028 trial phase ends.

International talks and deforestation rules

Under Article 6 of the Paris Agreement, the window for older CDM projects to switch over to the new UN-regulated system is closing at the end of 2025. Experts are warning that if the transition is too easy, some low-quality projects could sneak in before the tougher rules take effect, which could hurt the system's credibility. This whole discussion is influencing countries' positions leading up to COP30, where they hope to make a breakthrough on a more solid, UN-regulated carbon market.

Back in the EU, regulators are also fine-tuning the 2023 regulation for deforestation-free products. Large and medium-sized companies are still expected to be compliant by December 30, 2025, while some technical adjustments are being debated for possible adoption in 2026. The idea behind these changes is to strike a balance between traceability and due diligence without making things too hard to enforce or messing up trade.