December 2025 Global Regulatory Brief: Key Green Finance Updates

The December Global Regulatory Brief by Bloomberg Professional Services highlights significant regulatory developments in green finance across multiple regions, reflecting ongoing efforts to advance the global green transition through financial markets.

South Africa: Carbon Credit Market Overhaul Proposed

South Africa’s National Treasury is seeking public input on reforms designed to unlock and scale its domestic carbon credit market. This initiative is part of a broader strategy to support emissions reduction through market-based mechanisms complementing the existing carbon tax regime.

Key proposals include:

• Legal Clarification: Classifying carbon credits as unlisted securities under the Financial Markets Act to foster regulated trading.
• Infrastructure Upgrades: Enhancing the Carbon Offset Administration System (COAS) and linking it to international platforms, including an Article 6 registry for Internationally Transferred Mitigation Outcomes (ITMOs).
• Domestic Capacity Building: Empowering the South African National Accreditation System (SANAS) to accredit local validation and verification bodies, along with developing tailored South African crediting standards.
• Market Access Improvements: Easing capital requirements for financial institutions and integrating carbon credit trading into existing financial infrastructures.

The Treasury is reviewing related tax, financial, and exchange control regulations and anticipates phased implementation aligned with revised carbon tax allowances starting in 2026. The reforms also aim to connect South Africa’s market with global carbon frameworks.

European Union: Simplifying Sustainable Finance Disclosure Regulation (SFDR)

The European Commission has put forward amendments to the SFDR to simplify sustainability disclosures for financial products, reducing complexity and compliance costs.

Core amendments include:

• Streamlined Entity-Level Reporting: Removal of overlapping “principal adverse impacts” disclosures, limiting mandatory reports to large financial market participants as defined by the Corporate Sustainability Reporting Directive (CSRD).
• Simplified Product-Level Disclosures: Focusing disclosures on essential, comparable, and understandable sustainability data, coupled with retail-focused presentation standards to aid investor comprehension.
• Clear Product Categorization: Introducing three categories for sustainable finance products:
  1. Sustainable — Investments in assets meeting high sustainability standards.
  2. Transition — Support for entities progressing credibly towards sustainability.
  3. ESG Basics — General ESG integration or exclusion strategies without qualifying as sustainable/transition products.

Each categorized product must ensure at least 70% investment alignment with its sustainability strategy and exclude involvement in harmful sectors such as human rights violations, tobacco, weapons, and high fossil fuel exposure. Additionally, ESG-related product names and marketing claims will be restricted to products within these categories.

This proposal will proceed through legislative review by the European Parliament and Council, with future implementing rules to define technical disclosure specifics.

United Kingdom: FCA Consultation on ESG Ratings Regime

The UK’s Financial Conduct Authority (FCA) has launched a consultation on a new regulatory framework for ESG rating providers, aiming to improve transparency, governance, and manage conflicts of interest within this emerging sector.

Consultation highlights:

• Extension of baseline FCA rules to ESG rating firms ensuring consistency with broader financial regulations.
• Detailed provisions addressing transparency, governance, stakeholder engagement, and conflict management aligned with International Organization of Securities Commissions (IOSCO) standards.
• The consultation closes on 31 March 2026, with final rules expected by Q4 2026.
• The ESG ratings regime is planned to go live on 29 June 2028. This initiative follows HM Treasury legislation bringing ESG rating providers under FCA supervision to mitigate risks from inconsistent or opaque ESG ratings.

Emerging Markets: Brunei’s Sustainable Finance Roadmap

Brunei has launched a Sustainable Finance Roadmap aimed at integrating Environmental, Social, and Governance (ESG) principles into its financial sector, marking a strategic step to promote sustainable economic development.

Conclusion

These developments underscore a global regulatory drive to strengthen green finance frameworks with a focus on transparency, standardization, and market integrity. They reflect evolving policies addressing climate change, sustainability disclosures, and market mechanisms that facilitate green investments.

For comprehensive insights and ongoing updates on sustainable finance regulations, Bloomberg Terminal users can access further data and expert analysis via the REGS portal or consult Bloomberg representatives.

Source: Bloomberg Professional Services, December 2025 Global Regulatory Brief on Green Finance

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