News in the spotlight: EU Targets 90% Emissions Cut by 2040 – A New Era for Industry and Finance
The European Commission has proposed slashing net greenhouse gas emissions by 90% by 2040 compared to 1990 levels. This ambitious target signals a transformative decade ahead for heavy industry, energy, and transport sectors, demanding rapid decarbonization and innovation. Investors, companies, and policymakers now face the challenge of aligning strategies with the EU’s accelerated pathway to climate neutrality.
Products and services
JPMorgan launches blockchain tokenization for carbon credits
JPMorgan has announced the launch of a blockchain platform for carbon credit tokenization, aiming to revolutionize carbon trading and settlement. The solution is based on its Onyx Digital Assets technology, enabling transparent, rapid transactions with instant settlement and precise credit traceability. The project seeks to streamline carbon credit markets as part of decarbonization efforts, supporting corporate and institutional investors in implementing their net-zero strategies. The pilot involves issuers, brokers, and offset platforms. JPMorgan highlights that tokenization will strengthen the credibility of carbon markets and facilitate integration with traditional finance. This is another step in the bank’s development of blockchain infrastructure for real assets, following previous tokenization projects for money market funds and bonds. The platform reflects the global trend of connecting decentralized finance (DeFi) technologies with regulated markets (source: jpmorgan.com).
Phlair Carbon Removal to develop Europe’s largest DAC plant
Phlair Carbon Removal plans to build Europe’s largest Direct Air Capture (DAC) facility in Germany. The project aims to remove up to 1 million tonnes of CO₂ annually from the atmosphere, supporting EU climate goals and the development of carbon removal markets. The investment will use advanced technology to capture CO₂ from ambient air and store it safely underground (CCS). Construction is planned to begin in 2026, with commercial operations expected in 2028. The project is backed by venture capital and climate funds, including Breakthrough Energy Ventures. Phlair’s DAC facility will also enable certification of CO₂ removal credits in line with the latest MRV standards, increasing market confidence in this technology as a viable path to net-zero and permanent removal of residual emissions (source: phlair.com).
Salesforce launches AgentForce to automate sustainability disclosures
Salesforce has introduced AgentForce, a new platform that automates ESG disclosures and provides organization-wide emissions insights. The solution integrates environmental, social, and governance data in real time, connecting with clients’ ERP and CRM systems. Built on Salesforce Einstein, AgentForce uses AI to analyze data and generate reports aligned with CSRD, ISSB, TCFD, and other standards. The platform not only shortens reporting timeframes but also identifies data gaps and models emissions reduction scenarios. This launch responds to growing regulatory demands and investor expectations for ESG data transparency. Salesforce emphasizes that AgentForce will accelerate the digital transformation of sustainability management across industries from manufacturing to financial services (source: salesforce.com).
Regulations, Law and Frameworks
EU regulators propose integrating ESG risks into bank and insurer stress tests
European financial regulators are proposing to include ESG risks in banks’ and insurers’ stress tests. The new requirements will cover detailed analyses of climate, environmental, and social risks impacting solvency and sector stability. EIOPA and EBA also plan to extend macroeconomic scenarios to include ESG elements, such as sudden carbon taxes or nature degradation shocks. This regulation aligns with the EU Green Deal and the bloc’s 2050 climate neutrality target. Banks and insurers will need to demonstrate the resilience of their business models under ESG scenarios, potentially affecting capital allocation and investment strategies. Final regulations are expected by 2026, with market consultations running through late 2025 (source: eiopa.com).
Article 6 given red light within EU ETS
The European Commission has confirmed that carbon credits from Article 6 of the Paris Agreement will not be eligible for use within the EU ETS. This decision ends market speculation on the integration of offset credits into the European emissions trading system but allows their use by national governments to meet climate goals under NDCs. Simultaneously, the Commission announced a more ambitious emissions reduction target of 90% by 2040, indicating further tightening of EU ETS. The carbon compliance sector notes that the ban will increase demand for internal emissions reductions by heavy industry and power generation. The decision also affects offset projects in the Global South by limiting their potential European market (source: climate.com).
ISSB begins update of sector-focused SASB Sustainability Reporting Standards
The International Sustainability Standards Board (ISSB) has begun a comprehensive update of sector-specific SASB standards for the first time in nearly a decade. The process will focus on high-emission sectors such as coal, oil and gas, and metals and mining. The goal is to align disclosures with new climate requirements, regulatory changes, and investor expectations for financial materiality and ESG relevance. ISSB plans extensive market consultations to ensure compatibility with IFRS S1 and S2 and regional regulations such as CSRD in the EU. The updates aim to improve data transparency, comparability, and usefulness for investors while strengthening confidence in the global ESG reporting framework. Final revisions are expected by the end of 2026 (source: ifrs.com).
ESG Data & Analytics
Luxembourg Stock Exchange launches climate transition data platform for debt issuers
The Luxembourg Stock Exchange has launched the Climate-Aligned Issuer Platform, a new data platform supporting corporate debt issuers in transitioning to a low-carbon economy. Developed in collaboration with the Climate Bonds Initiative, it enables verification of issuers’ strategies against net-zero goals. The platform offers investors access to emissions data, transition plans, and bond alignment with Climate Bonds Standards criteria. The project aims to enhance transparency in transition finance markets and facilitate investment decisions based on reliable, comparable data. It responds to growing institutional investor needs for climate risk management and compliance with SFDR and EU Taxonomy frameworks (source: luxse.com).
ECB warns of lacking tools to assess nature degradation risks
The European Central Bank has warned that the lack of appropriate tools and data on nature degradation limits its ability to assess risks to the economy and monetary policy. In its report, the ECB highlights that biodiversity loss and ecosystem degradation can affect inflation, financial stability, and economic growth. However, current models do not sufficiently capture the link between nature and the economy. The Bank called for the development of reporting frameworks and data to integrate nature-related risks into macroeconomic analyses and monetary policy decisions. This is another signal that nature-related ESG (TNFD) is becoming a key priority for global financial regulators (source: ecb.com).
Net Zero Commitments
European Commission proposes 90% emissions reduction target by 2040
The European Commission has proposed a new net emissions reduction target of 90% by 2040 compared to 1990 levels. This represents a critical milestone towards achieving climate neutrality by 2050 and signals to member states and businesses the need to accelerate energy and industrial transformation. The plan includes strengthening the EU ETS, supporting zero-emissions technologies, and enhancing economic resilience to climate shocks. The target will undergo consultations, with legislation expected in 2026. Heavy industry, energy, and transport sectors will face intensified decarbonization pressures, while investors expect a detailed EU climate policy roadmap in the coming months (source: europa.com).
Nokia ties €1.5 billion debt to value chain emissions goals
Nokia has linked its new €1.5 billion bond issuance to achieving Scope 3 value chain emissions reduction targets. The Sustainability-Linked Bond features interest rates contingent on hitting milestones for decarbonizing suppliers and technology partners. This move supports Nokia’s strategy to achieve climate neutrality by 2040. The transaction reinforces the growing ESG-linked finance trend in Europe, where cost of capital is tied to environmental and social performance. Nokia emphasized that this mechanism also incentivizes suppliers to accelerate decarbonization in line with Science Based Targets initiative (SBTi) goals and corporate climate commitments (source: nokia.com).
ESG and Green Bond Issuances
IDB and World Bank launch $1bn Amazonia Bond programme
The Inter-American Development Bank and World Bank have announced the launch of the Amazonia Bond programme with a target volume of $1 billion to support conservation and sustainable development in the Amazon region. The programme includes bond issuances by regional countries linked to nature protection and socioeconomic development goals, such as education and green infrastructure investments. The initiative aligns with the global trend of nature finance and rising investor demand for biodiversity-supporting instruments (nature-linked bonds). Amazonia Bond also aims to strengthen development banks’ roles in mobilising private capital for climate and environmental goals in Latin America (source: iadb.com).
Green Climate Fund approves record $1.225bn for climate projects
The Green Climate Fund has approved record funding of $1.225 billion for climate projects in developing countries. The funds will support renewable energy investments, climate adaptation, and low-emission technology development. The largest allocations will go to projects in Africa and South Asia. The GCF emphasised that this decision increases the chances of achieving the Paris Agreement targets while mobilising additional private and institutional capital. This approval is a critical signal ahead of the COP summit and upcoming discussions on global climate finance, as developing countries continue to call for increased financial support (source: greenclimate.com).
London ‘super sewer’ issues first sterling blue bond
Tideway London, the company behind the city’s “super sewer,” has issued the first sterling-denominated blue bond worth £250 million. Proceeds will fund the Thames Tideway Tunnel, a major sewage infrastructure project aimed at improving London’s water quality and protecting the Thames ecosystem. The bond received blue bond certification under ICMA standards for water infrastructure financing. This issuance marks a significant milestone for Europe’s blue finance market, previously dominated by USD issuances in Asia and Latin America. The transaction could pave the way for further blue bond issuances in Europe, funding water, sanitation, and coastal ecosystem projects (source: lloydsbankinggroup.com).