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Take a look at Accountancy Europe’s response to EFRAG’s public consultation questionnaire regarding the ESRS-40a
The Council of the European Union (Council) adopted two sets of conclusions, setting out the EU’s main negotiating positions ahaedin view of the 2026 UN Climate Change Conference (COP31), which will take place to be held in Antalya, Türkiye, from 9 to 20 November. The conclusions call for progress on implementing the Paris Agreement, accelerating the transition away from fossil fuels, scaling up renewable energy and energy efficiency, and strengthening climate adaptation and resilience.
On international climate finance, the Council calls for increased fundingclimate finance and, stressesing the need to:
The Council highlights the role of sustainable finance frameworks, comparable climate-related disclosures and instruments such as green bonds in mobilising investment.
The European Parliament (EP) also adopted its negotiating mandate for COP31. MEPs call for remaining aligned with the Paris Agreement, focusing on three priorities:
While the EU remains on track to cut emissions by 54% by 2030 compared with 1990 levels, provided Member States deliver on existing plans, preliminary Eurostat figures indicate that emissions rose increased by 1% between 2024 and 2025.
The European Commission (EC) published data on the EU Taxonomy’s uptake in 2025.
Companies reported €323.8 billion in Taxonomy-aligned capital expenditure (CapEx), bringing cumulative investments since 2021 to €1.224 trillion. Specifically:
Since the European Green Bond Standard (EuGBs) began applying in December 2024, issuance has reached around €60 billion. Corporates accounted for 51% of issuance, followed by banks (31%). In 2026, EuGBs represented 15% of the European green bond market, with 75% of covered activities linked to climate change mitigation.
The EC’s new communication sets out the framework to strengthen Europe’s preparedness for climate change. It aims to support public authorities, businesses and communities with practical tools to address climate risks.
The initiative identifies priorities including such as more consistent climate risk assessments, clearer responsibilities, streamlined resilience planning, stronger monitoring and improved access to adaptation finance and solutions. Adapting Europe’s infrastructure and building climate-resilient ecosystems will require an estimated investments of around EUR 70 billion in annual investmently.
For that purpose, the communication highlights, amongst other tools, the EU Sustainable Finance Taxonomy, amongst other tools, to make resilience investments easierhelp to identify and finance resilience investments.
The EC will begin implementation immediately and plans to propose an EU Strategic Plan on Climate Resilience in 2028.
EFRAG is gathering input for on the sustainability reporting pillar’s activities and priorities from mid-2027 onward.
EFRAG is seeking views on:
The deadline to for contributionse is 15 February 2027.
The EC’s proposal for the 2028-2034 Multiannual Financial Framework (MFF) sets a horizontal target of at least 35% of EU budget spending for climate and environmental objectives. It restructures funding around two main programmes the National and Regional Partnership Fund and the European Competitiveness Fund (ECF) with spending contributions up to 43%, eliminating the standalone LIFE programme.
The EP Committee on Budgets (BUDG) and the Committee on Budgetary Control (CONT) published a draft report retaining the 35% climate and environment spending budget target as well as preserving the horizontal application of the Do No Significant Harm (DNSH) principle. The EP will continue the negotiations on the file to adopt their position by the end of the year.
The Irish Presidency published a revised negotiating box which will serve as a basis for the ongoing negotiations on the next MFF. It retains a climate and environmental spending target of at least 35%, however, it is proposed to reduce by 11% in the ECF.
The EU Platform on Sustainable Finance (PSF) published a report monitoring capital flow towards sustainable investments.
In 2025, large European companies invested €512 billion in green and transition-related assets, representing accounting for 21% of total corporate investment in the EU. This included €330 billion in green investments and €182 billion in additional CapEx supporting the transition.
Investment is increasingly being driven by electrification, with increased growing spending on clean energy, electricity grids, rail infrastructure and lower-carbon industrial production. Investment in lower-carbon cement has also begun, although spending on decarbonising chemicals remains limited. The picture is mixed in buildings sector: new construction is increasingly aligned with sustainability objectives, while renovation may be lagging.
The PSF published a statement on EFRAG’s exposure draft on for ESRS for non-EU companies (ESRS 40-a) recommending that final standards:
However, the PSF raises concerns about:
The PSF warns that these differences could create an uneven playing field between EU and non-EU companies operating in the Single Market. It also argues that such inconsistencies could undermine the objectives of the European Green Deal and the EU Climate Law.
The EC is expected to adopt a the delegated act with ESRS for non-EU companies in Q2 2027
The European Securities and Markets Authority (ESMA) published its final report providing technical advice to the EC on simplifying key performance indicators (KPIs) under the EU Taxonomy Disclosures Delegated Act (DDA). It will inform the EC’s review of the Taxonomy DDA. Among key recommendations, ESMA suggests:
ESMA coordinated its response with the other European Supervisory Authorities (ESAs).
ESMA published its European Common Enforcement Priorities (ECEP) for the 2026 annual financial reports of listed issuers, covering focusing on three areas: IFRS financial statements, sustainability reporting and digital reporting. Specifically:
ESMA published two non-binding thematic notes on sustainability-related claims, focusing on positive impact and climate transition claims across funds, bonds and benchmarks.
Both notes provide practical examples of good and poor practices to help market participants ensure that sustainability claims are clear, fair and not misleading, reducing the risk of greenwashing. They build on previous guidance covering environmental, social and governance (ESG) credentials and strategies.
ESMA’s Q2 2026 Green Finance Dashboard points highlights to continued resilience across ESG markets. More specifically:
The International Sustainability Standards Board’s (ISSB) proposals on nature-related disclosures:
Stakeholders can provide their feedback until 19 February 2027.
The UK will introduce its UK-endorsed ISSB standards (UK SRS), the UK SRS 1 and UK SRS 2 (based on IFRS S1 and IFRS S2) starting from 1 January 2027, with the first reports coming in 2028. The scope includes companies with shares listed in the:
The UK SRS replace the previously mandatory TCFD climate reporting and includes the following specificities:
2. international commercial companies with a secondary listing and depositary receipt issuers to also report against UK SRS on a comply-or-explain basis
In addition, the UK SRS provides 1-year transitional relief for Scope 3 disclosures and 2-year transitional relief for S1 disclosures.
Council
Council publishes 2025 international climate finance figures
European Commission
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EIOPA
EIOPA names extreme heat as the key climate-related risk for life and health insurers and pension providers
TFND
TFND updates to its recommendations and LEAP assessment approach
Frank Bold
Two years of CSRD reporting: greater transparency, but strategy is lagging behind
