December 2025 Global Regulatory Brief: Insights into Green Finance Developments

Bloomberg’s Regulatory Affairs Specialists present this December 2025 brief. It spells out new rules in green finance. These rules aim to boost market transparency, strengthen market integrity, and support sustainable investments. Each rule pairs strong oversight with easier market access.

South Africa: Overhaul of Carbon Credit Market

Key Developments:

• South Africa’s National Treasury now consults on reforms. The goal is to grow the local carbon credit market and work with the carbon tax regime.
• The planned changes are:
  • Classify carbon credits as unlisted securities under the Financial Markets Act so that oversight is clearer.
  • Upgrade the Central Offset Administration System (COAS) and link it with global systems. An Article 6 registry for ITMOs is part of this effort.
  • Allow SANAS to accredit local validation bodies and create national crediting standards.
  • Make capital rules easier for banks and let trading move through current financial platforms.

Implications:

• Tax laws, financial regulations, and exchange control rules may soon change.
• Policies will roll out in phases. For example, there is a planned 5% increase in offset allowances starting in 2026.
• Global links with carbon market rules will grow stronger.

European Union: Simplification of Sustainable Finance Disclosure Regulation (SFDR)

Background:
The SFDR took effect in March 2021. It set rules for sustainability disclosures but has been seen as complicated and costly.

Proposals by the European Commission include:

• Entity-Level Disclosures: Remove the “principal adverse impacts” report. This step avoids overlap with the CSRD. Only large financial market participants submit these disclosures.
• Product-Level Disclosures: Focus on key, easy-to-compare data. This change helps investors and lowers demands on product makers.
• Categorization System: Introduce three clear groups of sustainable products:
  • Sustainable: Products that meet strict standards now.
  • Transition: Products that help companies move toward better sustainability.
  • ESG Basics: Products that follow general ESG rules but are not labelled as sustainable or transitional.

Additional Requirements:

• At least 70% of a product’s investments must match its stated sustainability goals.
• Sectors that harm human rights, sell tobacco or banned weapons, or heavily expose fossil fuels are excluded.
• Only products in these groups may use ESG claims in their marketing.

Next Steps:

• The European Parliament and EU Member States will review the proposal.
• Later, detailed rules on disclosure and categorization will be set.

United Kingdom: FCA’s Consultation on ESG Ratings Regime

Context:

• New laws now cover ESG rating providers under FCA rules. The consultation ends on 31 March 2026.
• The FCA wants to stop harm from mixed ESG ratings and match IOSCO standards.

Key Highlights:

• The plan will apply existing FCA rules. These rules cover transparency, governance, and conflict management.
• New rules are expected by Q4 2026. The new regime will start on 29 June 2028. —

Conclusion

This brief shows a global push to improve green finance rules. Rules in South Africa, the EU, and the UK all aim to blend strong market rules with sustainable goals. They work to protect investors and support the green transition.

For ongoing updates and in-depth regulatory analysis on green finance and sustainable investments, Bloomberg Terminal users can run REGS <GO> or contact their Bloomberg representative.

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