Sustainability Watch March-April, 2025 Edition

Global Insights and Development

European Commission Proposes Omnibus Simplification Package Affecting Sustainability Regulations

On February 26, 2025, the European Commission introduced the Omnibus Simplification Package to streamline sustainability reporting and due diligence regulations within the EU. This proposal aims to ease administrative burdens, particularly for small and medium-sized enterprises (SMEs), while maintaining sustainability commitments.

Key measures include delays in compliance deadlines for corporate sustainability reporting and due diligence obligations, as well as adjustments to EU Taxonomy Regulation reporting thresholds. The reforms are expected to reduce administrative burdens by 25% overall and by 35% for SMEs.

Key Takeaways:

• Corporate Sustainability Reporting Directive (CSRD) – A two-year delay has been proposed for certain companies to comply with sustainability reporting requirements.
• Corporate Sustainability Due Diligence Directive (CSDDD) – A one-year postponement has been suggested for both the transposition deadline and the compliance timeline for affected businesses.
• EU Taxonomy Regulation Adjustments – Reporting obligations to be eased, with mandatory compliance potentially limited to entities generating over €450 million in turnover.

UN Environment Assembly Adopts Resolution on Plastic Pollution Treaty Negotiations
On March 1, 2025, the 6th UN Environment Assembly (UNEA-6) concluded with the adoption of a resolution strengthening negotiations for a legally binding global treaty to combat plastic pollution. Delegates reaffirmed the goal of finalizing the treaty by the end of 2025, emphasizing a full life cycle approach to plastics. The resolution builds on the commitments made during UNEA-5.2 in 2022 and stresses the importance of inclusive participation, particularly for the Global South and informal waste sector workers.

Key Takeaways:

• Strengthened Global Mandate
  The resolution holds parties accountable for adhering to a legally binding treaty.
  Negotiations are to continue with the goal of completion by the end of 2025.
• Comprehensive Life Cycle Approach
  Plastic pollution is to be addressed from production to disposal.
  Sustainable alternatives and waste management strategies are emphasized.
• Inclusive and Equitable Participation
  Perspectives from the Global South and informal waste sectors will be integrated.
  The treaty aims to ensure fairness across different economic and environmental contexts.

Sustainable Warfare? The ESG Investor’s Dilemma

The ethical debate on defence investments has intensified amid rising geopolitical threats and shifting security policies. European governments are urging financial institutions to revise ESG criteria, which have historically excluded defence stocks. While EU regulations restrict funding for controversial weapons, conventional arms remain permissible. However, asset managers, fearing reputational risks, have imposed stricter exclusions. As a result, European sustainability-focused funds allocate only 0.5% to aerospace and defence, compared to 1.3% in conventional funds. With defence stocks soaring—up 175% since 2022—governments and analysts argue that ESG funds should reassess their role in the sector. Increased ESG investor involvement may improve transparency in the defence industry, but it also challenges traditional sustainability principles and public perception.

Key Takeaways:

• Regulatory Framework
  EU rules prohibit investment in controversial weapons but not in conventional arms.
  Misinterpretations and self-imposed restrictions have limited ESG participation.
• Financial and Investment Trends
  Defence stocks have seen a 175% rise since 2022, benefiting conventional funds.
  Smaller defence firms struggle to secure funding despite the sector’s growth.
• Government and Policy Influence
  Policymakers propose integrating defence into ESG portfolios to ensure security funding.
  Greater engagement is seen to enhance transparency and accountability in the industry.

UN Climate Financing Dialogue Calls for Doubling Adaptation Funds

At the Climate Financing Dialogue in Bonn on April 22, 2025, UN leaders called on developed countries to double adaptation finance flows for developing nations by 2027. This push comes as climate impacts worsen and funding gaps remain significant, especially for the most vulnerable countries.

The dialogue stressed that increased adaptation funds are crucial for building resilience and highlighted the need for greater transparency in tracking climate finance. Additionally, participants encouraged stronger South-South cooperation, urging developing nations to collaborate more closely on adaptation solutions. Rooted in past agreements like the Glasgow Climate Pact, this push aims to reduce the growing adaptation funding gap.

Key Takeaways:

• Doubling adaptation finance by 2027 is vital for helping vulnerable countries build climate resilience.
• Greater transparency and accountability in climate finance flows were emphasized to ensure funds reach those most in need.
• The dialogue encouraged increased South-South cooperation, supporting partnerships and knowledge sharing among developing countries.

World Bank Launches Nature Bonds to Tackle Biodiversity Loss

• The World Bank launched a $3 billion “Nature Bond” initiative on April 10, 2025, aimed to mobilize investments for conservation and biodiversity restoration, particularly in tropical regions. These bonds are innovative financial instruments that tie investor returns to measurable biodiversity outcomes, such as the health of rainforests and coral reefs. The initiative is designed to attract private sector and institutional capital, utilizing market mechanisms to address biodiversity loss and support sustainable development. This move indicates the growing recognition of nature-positive finance as critical for achieving global biodiversity targets and builds on the increasing momentum of biodiversity-focused bonds, which have risen significantly in recent years.

Key Takeaways:

• The $3 billion Nature Bond links investor returns directly to biodiversity performance.
• Funding will focus on projects in tropical ecosystems, especially rainforests and coral reefs.
• The initiative is structured to attract institutional and private sector investment, leveraging market capital for conservation goals.

Japan Tightens Methane Emissions Targets for Energy Sector

Japan updated its climate roadmap on April 4, 2025, introducing stricter methane reduction targets for its LNG and gas sectors to align with global efforts against short-lived climate pollutants. The revised plan sets a goal to cut methane emissions from the energy sector by 40% by 2030, adding to Japan’s efforts towards the Global Methane Pledge made in 2021. The new measures include tighter regulations and sector-specific standards for energy producers, aiming to address fugitive methane emissions and increase accountability. This update comes alongside broader national targets to reduce overall greenhouse gas emissions by 60% by 2035 and 73% by 2040 compared to 2013 levels, as part of Japan’s pathway to net zero by 2050.

Key Takeaways:

• Japan has revised its climate roadmap to introduce stricter methane reduction targets specifically for the LNG and natural gas sectors.
• Stronger, sector-specific regulations are being introduced for LNG and gas operators. The objective is to hold energy producers accountable for methane emissions.
• The policy is part of Japan’s broader climate strategy to significantly cut greenhouse gas emissions and advance toward carbon neutrality by 2050.

 

National Insights

India Releases First-Ever National Adaptation Plan (NAP)

India’s first-ever National Adaptation Plan (NAP) was launched on March 17, 2025, to address climate vulnerability. The plan outlines strategies to strengthen water security, enhance agricultural resilience, adapt infrastructure to climate risks, and mitigate health impacts. A sectoral approach has been taken to tackle specific challenges while ensuring local communities are equipped with adaptation strategies. Additionally, mobilizing climate finance remains a key focus, with efforts directed toward attracting both international funding and domestic investments.

Key Takeaways:

• The plan provides targeted solutions for agriculture, water management, infrastructure, and public health.
• Community resilience is a major priority, ensuring local participation in adaptation efforts.
• Climate finance mobilization is crucial, aiming to secure both international and domestic investments.

Tamil Nadu Government Approves State ESG Roadmap

On March 25, 2025, the Tamil Nadu government approved its inaugural Environmental, Social, and Governance (ESG) roadmap, aiming to enhance climate resilience, promote green industries, and implement inclusive social policies. The plan outlines short- and medium-term sustainability strategies across key sectors, including transport, energy, housing, and agriculture. It emphasizes the development of green industries, reduction of carbon emissions, and strengthening of climate adaptation efforts. The roadmap aligns with both national and global ESG standards and encourages public-private partnerships to drive sustainable investments. Additionally, it focuses on social equity and governance reforms to ensure transparent and accountable implementation.​

Key Takeaways:

• Renewable Energy Targets: Tamil Nadu aims to increase its renewable energy capacity to 75%, building upon its current 50% green energy mix of solar and wind power.
• Net-Zero Emissions Goal: The state plans to achieve net-zero carbon emissions by 2050, setting a target two decades ahead of India’s national goal. ​
• Biodiversity Conservation: A 10-year roadmap has been developed to enhance biodiversity, aiming to transform Tamil Nadu into a climate-smart state with a green economy.
• Electric Vehicle Initiatives: The government is collaborating with the World Bank to develop an electric vehicle roadmap, targeting ₹50,000 crore in investments and the creation of 1.5 lakh jobs over the next five years. ​
• Economic Growth Strategy: Tamil Nadu plans to unveil a roadmap to achieve a $1 trillion economy by 2030, integrating sustainable development goals into its economic planning.

Milestone in India’s Renewable Energy Capacity

A historic milestone in renewable energy was achieved by India with the addition of 25 GW of capacity in FY 2024-25, reflecting a 35% increase over the previous year. The growth was led by solar power, contributing 21 GW. The sector was further strengthened by the government’s initiatives in domestic solar manufacturing, green hydrogen, and solarization. India is expected to become the world’s third-largest renewable energy capacity holder.

Key Takeaways:

• Solar Growth: A 38% rise in solar capacity additions was recorded, surpassing 100 GW of installed capacity.
• Manufacturing Expansion: Solar module capacity was nearly doubled (from 38 GW to 74 GW), and PV cell capacity was tripled (from 9 GW to 25 GW).
• Green Hydrogen Boost: ₹4,459 crore was allocated for electrolyser manufacturing and hydrogen production.
• PM-KUSUM Progress: 4.4 lakh solar pumps were installed, marking a 4.2x increase from FY24.
• Financial Support: A 27% rise in IREDA loan sanctions was observed, reaching ₹47,453 crore.

India Launches National Green Hydrogen Mission Implementation Guidelines

India’s Ministry of New and Renewable Energy (MNRE) released detailed operational guidelines for the National Green Hydrogen Mission on April 16, 2025. These guidelines outline the framework for launching pilot projects, scaling up production, and building necessary infrastructure to support the mission’s ambitious targets. The mission aims to position India as a global leader in green hydrogen through public-private collaboration and by providing incentives to encourage industry participation. With a target of producing 5 million metric tonnes (MMT) of green hydrogen annually by 2030, the guidelines also emphasize the development of export capabilities, to leverage India’s renewable energy potential to serve both domestic and international markets.

Key Takeaways:

• The guidelines set a production target of 5 MMT of green hydrogen per year by 2030, backed by 125 GW of renewable energy capacity.
• India aims to become a major green hydrogen export hub for Asia, targeting up to 10% of the global market by 2030.
• The mission is expected to create over 600,000 jobs, reduce fossil fuel imports by ₹1 lakh crore, and cut 50 MMT of CO₂ emissions annually by 2030.
• Recent developments include the approval of pilot projects across transport, shipping, steel, and storage sectors, and the publication of 88 safety and performance standards to support rapid scale-up

Maharashtra Declares First Climate Resilient Cities Initiative

On April 12, 2025, the Maharashtra government announced plans to develop climate-resilient infrastructure in 10 cities under its new Urban Climate Action Framework. The initiative prioritizes urban resilience through flood mitigation, green mobility, and heat action strategies, with Mumbai, Pune, and Nagpur among the first pilot cities. The framework also explores innovative climate finance mechanisms, including municipal green bonds, to fund these projects. This move builds on existing city-specific climate action plans, such as Mumbai’s Climate Action Plan and Nagpur’s Climate Resilient City Action Plan. The state is also advancing green finance, with committees and local bodies actively working to raise capital through green bonds for sustainable infrastructure.

Key Takeaways:

• The Urban Climate Action Framework targets flood mitigation, green mobility, and heat action to boost resilience in Maharashtra’s cities.
• Mumbai, Pune, and Nagpur are among the first cities selected for pilot implementation, leveraging existing climate action and resilience plans.
• The government is actively exploring municipal green bonds and other climate finance tools to support sustainable urban infrastructure projects

India Revises E-Waste Management Rules to Cover Informal Sector

On April 5, 2025, the Ministry of Environment, Forest and Climate Change (MoEFCC) updated India’s e-waste management rules to formally integrate informal sector actors through capacity-building and incentives. The aim is to improve e-waste collection and recycling by recognizing and supporting the vast informal workforce, which currently handles most of the e-waste in India. The revised rules strengthen Extended Producer Responsibility (EPR), requiring all producers, manufacturers, recyclers, and refurbishers to register on a central portal, and introduce stricter compliance, verification, and audit mechanisms. The update also puts an emphasis environmental justice, prioritizing labor safety and community health, and seeks to channel informal operations into the formal sector to ensure environmentally sound recycling practices.

Key Takeaways:

• The updated rules formally recognize and integrate informal waste workers, aiming to boost collection rates and support their transition into the formal sector through training and incentives.
• EPR compliance is reinforced, with mandatory registration for all stakeholders and stricter verification and audit requirements to ensure responsible e-waste management.
• The rules emphasize environmental justice, focusing on labor safety, community health, and reducing hazardous practices in informal recycling operations

 

Corporate Goals/ Initiatives

Amazon Launches Carbon Credit Service to Support Net-Zero Goals:

A carbon credit service was introduced by Amazon on March 19, 2025, through its Sustainability Exchange platform, allowing U.S.-based suppliers, business customers, and Climate Pledge signatories to access verified carbon credits. The initiative has been developed to assist companies in achieving net-zero carbon emissions by facilitating investments in nature-based projects and carbon removal technologies. Participation mandates the establishment of net-zero targets, transparent reporting of greenhouse gas emissions, and adherence to science-based decarbonization strategies. This effort aligns with Amazon’s broader sustainability commitments, including investments in carbon-free energy, electrification of its delivery fleet, and decarbonization of real estate, with the objective of reaching net-zero emissions by 2040.

Key Takeaways:

• Verified carbon credits are being made available to businesses through Amazon’s Sustainability Exchange.
• Companies must set net-zero targets and ensure transparent emission reporting to participate.
  Amazon’s sustainability strategy includes transitioning to clean energy and reducing emissions across operations.

SEBI Integrates Green Credit Program into ESG Reporting to Boost Corporate Sustainability

On April 1, 2025, the Securities and Exchange Board of India (SEBI) announced that the Green Credit Program (GCP) will be integrated into the Business Responsibility and Sustainability Reporting (BRSR) framework for listed companies starting from FY2024-25. The initiative aims to enhance ESG reporting by allowing companies and their top 10 value chain partners to include ‘green credits’ as a leadership indicator. This step is designed to promote corporate accountability and encourage measurable sustainability efforts. The GCP, introduced by the Ministry of Environment, Forest, and Climate Change, covers multiple environmental activities, including water conservation, waste management, and sustainable infrastructure. Experts believe that this move will standardize ESG disclosures and incentivize meaningful environmental action.

Key Takeaways:

• Green Credit Program (GCP): Introduced by the Ministry of Environment, Forest, and Climate Change, GCP encompasses seven activities: water management, sustainable agriculture, waste management, air pollution reduction, mangrove conservation, Ecomark label development, and sustainable building and infrastructure. ​
• Leadership Indicator: Incorporating green credits into BRSR enables companies to showcase their environmental initiatives, promoting efforts to protect and restore the environment.

Microsoft Announces AI for Climate Resilience Initiative

Microsoft launched a new AI-focused initiative on April 18, 2025, to support climate resilience tools for agriculture and disaster response in vulnerable regions. Artificial intelligence is being used in the program to enhance crop forecasting, develop early warning systems, and improve water management, with initial pilot projects in sub-Saharan Africa and South Asia. By promoting open-source climate data tools, Microsoft seeks to empower local communities and organizations with accessible, data-driven solutions for climate adaptation.

Key Takeaways:

• Microsoft’s initiative uses AI to strengthen crop forecasting, disaster early warning, and water management for climate adaptation.
• Pilot projects will begin in sub-Saharan Africa and South Asia, targeting regions most vulnerable to climate impacts.
• Open-source climate data tools are promoted to enable wider access and collaboration on climate resilience solutions.

Reliance Industries Sets Target to Eliminate Routine Flaring by 2027

Reliance Industries announced on April 25, 2025, that it will end routine gas flaring at all its oil and gas sites as part of its enhanced ESG roadmap. This aligns the company with global efforts to reduce methane emissions and decarbonize the oil and gas sector. Reliance plans to use satellite-based monitoring systems to track and verify emission reductions, aiming to improve transparency and accountability. The move is expected to strengthen Reliance’s ESG risk management profile and appeal to environmentally conscious investors. This announcement comes as Indian energy firms, including ONGC, are also advancing similar methane mitigation and decarbonization goals, reflecting a broader industry shift toward sustainability.

Key Takeaways:

• Reliance targets the elimination of routine gas flaring, directly supporting global methane mitigation and decarbonization objectives.
• The company will deploy advanced satellite-based systems to monitor and verify emission reductions, ensuring greater operational transparency.
• This initiative is designed to enhance Reliance’s ESG credentials, which would further help Reliance in boosting investor confidence and reputation as a responsible energy leader.

Adidas Unveils Fully Circular Footwear Line

Adidas unveiled its new fully circular footwear line, FUTURECRAFT.LOOP, on April 8, 2025, advancing its sustainable materials roadmap. The shoes are made entirely from a single recyclable material-100% reusable TPU-allowing them to be returned, ground down, and remanufactured into new pairs with zero waste. This circular design eliminates the use of glue, facilitating easy recycling and promoting a closed-loop system. Adidas also introduced a take-back program encouraging consumers to return worn shoes for remanufacture. The initiative integrates circularity into brand engagement, aiming to reduce plastic waste and foster a sustainable sportswear future. This launch builds on Adidas’s ongoing collaborations with sustainability partners and its broader commitment to ending plastic waste in the fashion industry.

Key Takeaways:

•  Full Circularity: The footwear is made from 100% recyclable mono-materials, enabling full circularity.
• Take-Back Program: Adidas offers a take-back program where consumers can return used shoes for recycling and remanufacture.
• Consumer Awareness: The brand actively incorporates circular economy principles into consumer engagement to raise awareness and drive sustainability.

 

Notable Legal Judgments & Others

DWS Penalized €25M for Greenwashing Amid Heightened ESG Oversight

DWS, an asset manager majority-owned by Deutsche Bank, has been fined €25 million by German prosecutors for greenwashing. Misleading ESG claims made between 2020 and early 2023 were found to have violated financial investment laws. In 2023, a similar $25 million settlement was reached in the United States for misstatements regarding ESG investing and failures in anti-money laundering policies. The financial impact of the latest fine has been mitigated, as provisions had already been set aside.

The investigation, launched in 2021 after whistleblower Desiree Fixler alleged ESG misrepresentation, led to regulatory scrutiny, raids on DWS and Deutsche Bank offices, and the resignation of then-CEO Asoka Woehrmann. Global regulators have intensified efforts to combat greenwashing, pushing for greater transparency in sustainable investments. Following the announcement, DWS shares declined by 2%, underperforming the broader European banking index.

Key Takeaways:

• Financial & Reputational Costs: Investor confidence has been impacted by fines and stock declines.
• Whistleblower Impact: Internal disclosures resulted in investigations and leadership changes.
• Operational Reforms: Compliance, documentation, and marketing oversight have been reinforced.

Delhi High Court Orders Audit of Construction Projects for Dust Pollution

On March 12, 2025, the Delhi High Court directed an environmental audit of all ongoing construction projects in Delhi to address escalating dust pollution. The decision was made in response to widespread non-compliance with environmental regulations, which has contributed to deteriorating air quality. The audit will assess adherence to mandated dust control measures and identify violations that require corrective action.

Key Takeaways:

• Regulatory Oversight: Active construction sites will be examined to determine compliance with environmental guidelines, ensuring proper implementation of dust mitigation strategies.
• Public Health & Environment: Rising pollution levels, aggravated by unchecked construction activities, have raised concerns over health risks and ecological impact, prompting judicial intervention.
• Legal & Administrative Accountability: Authorities and project developers will be held responsible for any lapses in implementing pollution control measures. The directive reinforces the need for stricter enforcement of environmental laws to prevent further deterioration of air quality.

Rise of ‘Greenhushing’ Among Corporations Amid Political Backlash

Amid political backlash, particularly following President Trump’s re-election, corporations are increasingly adopting “greenhushing,” a practice where companies continue their environmental, social, and governance (ESG) initiatives but refrain from publicizing them. This shift is driven by fears of regulatory crackdowns and litigation, leading firms to pursue sustainability efforts discreetly. HSBC extended its net-zero deadline to 2050 but ramped up green investments. Bayer is developing climate-resilient crops, driven by real business needs rather than branding. Fund managers too, are increasingly moving away from bold ESG pledges toward more discreet, risk-based internal scoring systems. This shiftnsignals a transition from virtue signaling to pragmatic, results-driven action. ESG is no longer merely a public relations tool; it is becoming an integral part of long-term business strategy.

Key Takeaways:

• Political Influence on Corporate Behavior: The current administration’s stance has led to significant changes in corporate approaches to ESG, with companies opting for discretion to avoid political and legal repercussions.​
• Regulatory Concerns: Fears of regulatory crackdowns and potential litigation deter firms from openly discussing their sustainability efforts. ​
• Sustainability as Business Imperative: Firms recognize that addressing climate issues remains critical for future operations, even if public declarations are minimized.

Supreme Court of Brazil Upholds Indigenous Land Protection Law

On April 11, 2025, Brazil’s Supreme Court upheld legislation protecting Indigenous territories from deforestation and industrial development, reinforcing legal safeguards for these lands. This decision blocks the exploitation of Indigenous reserves, recognizing their critical role in forest carbon storage and biodiversity conservation. The ruling follows a series of landmark decisions, including the September 2023 rejection of the “cutoff date” argument, which would have limited Indigenous land rights to those physically occupied in 1988. By reaffirming Indigenous land protections, the Court has set a precedent for safeguarding both Indigenous rights and the Amazon’s ecological integrity.

Key Takeaways:

• The Supreme Court’s decision prevents deforestation and industrial activities in protected Indigenous territories, upholding legal safeguards.
• The ruling acknowledges the importance of Indigenous lands in storing forest carbon and supporting biodiversity, reinforcing their climate significance.
• This action demonstrates judicial leadership in defending environmental and Indigenous rights, bolstering the rule of law in Brazil

Rajasthan HC Orders Industrial Water Audit in Arid Zones

On April 19, 2025, the Rajasthan High Court directed an industrial water usage audit in response to concerns about over-extraction in water-scarce districts such as Barmer and Jaisalmer. The Court’s order focuses on preserving groundwater in these arid regions, where chronic water shortages have long impacted both communities and agriculture. Industries operating in these districts are now required to submit detailed water management reports, increasing corporate accountability for resource use. The Court’s decision is grounded in the precautionary principle, providing legal backing for preventive environmental protection and sustainable resource management. This move follows a series of judicial interventions in Rajasthan aimed at safeguarding water bodies and enforcing environmental compliance.

Key Takeaways:

• The High Court’s directive enforces sustainable groundwater management in Barmer, Jaisalmer, and other dry districts.
• Industries must submit comprehensive water management reports, ensuring greater corporate accountability.
• The order applies the precautionary principle, strengthening legal protections for water resources and supporting preventive environmental action.