December 2025 Global Regulatory Brief: Key Developments in Green Finance

Green finance grows fast. Rules change now. Regulators update laws to help sustainability. We note new policies from South Africa, the European Union, the United Kingdom, and Brunei. These shifts matter for green markets.

South Africa: Overhaul of Carbon Credit Market

The National Treasury seeks feedback on new rules. They want to reform carbon credit markets to cut emissions. The plan uses market tools and the existing carbon tax. Each word in these rules ties closely to simple connections.

Key proposals:

• Legal clarity: The law will treat carbon credits as unlisted securities. This change makes trading easier and strengthens rule checks.
• Infrastructure upgrades: The COAS system will get an update. It will link to global exchanges and set up an Article 6 registry for transfers.
• Local capacity building: Local bodies will earn accreditation. New domestic standards will guide crediting.
• Market access: Fewer capital rules will help banks join in. Existing systems will allow carbon credit trading.

Implications:
Revisions may affect tax, finance, and currency rules. The changes start slowly, with offset tweaks beginning in 2026. The plan joins global carbon markets.

European Union: Simplifying Sustainability Disclosure Regulation (SFDR)

The European Commission proposes clearer rules for sustainability reports. They aim for short, simple sentences that tie each idea closely. This reduces burdens and helps investors see facts fast.

Context:
Since March 2021, SFDR has set basic EU disclosure rules. Recent reviews found that long reports cost time and confuse readers.

Key changes proposed:

• Entity-level disclosures: Duplicate “principal adverse impacts” reports will go. Companies already follow CSRD rules, so extra work stops.
• Product-level disclosures: Only the needed sustainability data will show. This change helps investors compare products easily.
• Clear product categorization:
  • Sustainable – assets that meet top sustainability rules.
  • Transition – projects on real paths to green change.
  • ESG Basics – general ESG measures without a full green tag.

Products must match their category by at least 70% and skip sectors like tobacco and fossil fuels. Marketing claims must follow these tag rules exactly.

Next Steps:
The proposal moves to the European Parliament and Member States. They will review it before new technical rules start.

United Kingdom: FCA Consultation on ESG Ratings Regime

The FCA opens a consultation for a new ESG ratings framework. They set clear baseline rules for rating experts. Each sentence keeps connected words close to help with understanding.

Highlights:

• New rules will boost transparency.
• The framework targets conflicts of interest and better stakeholder input.
• The consultation runs until March 31, 2026, and final rules may come by Q4 2026.
• The ESG ratings system will start on June 29, 2028. This step follows HM Treasury laws that bring ESG ratings under FCA control. The aim is to match international IOSCO standards.

Brunei: Launching Sustainable Finance Roadmap

Brunei starts a Sustainable Finance Roadmap with clear steps. The plan sets ESG goals for the financial sector. Market players will soon get fresh guidelines. Details remain in early design.

Conclusion

New rules show a strong global push for sustainable finance. They build market trust and protect investors while supporting the green shift. Businesses in organic and sustainable sectors will use these updates to align investment and risk plans.

For ongoing updates and deep-dives on sustainable finance regulation, Bloomberg Terminal users can access REGS . Stay informed with expert insights for navigating the evolving green finance regulatory landscape.

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