Explicit remedial policy introduced by IFC, Japan’s GX initiative preps bankable projects and shareholder group warns arms trade is an ESG blind spot. All this and more in the latest roundup.
IFC adopts first-ever remedial action framework
The International Finance Corporation (IFC) has become the first development finance institution to adopt an explicit policy on remedial action to address environmental and social harms caused by IFC-supported projects.
The remedial action framework, published in April, focuses on prevention and preparedness, access to remedy, and contribution to remedial action. It applies to all IFC investment projects and those covered by political risk insurance guarantees provided by the Multilateral Investment Guarantee Agency (MIGA).
The framework document states that the IFC and MIGA recognise they “have a role to play in the context of the broader remedial action ecosystem”, although they are not stand-ins for insurers,. The framework was approved on an interim basis for three years, with implementation during the pilot phase requiring regular stakeholder engagement and monitoring through key performance indicators developed in consultation with the compliance advisor ombudsman.
EFRAG races to advice on simplified sustainability reporting standards
The European Financial Reporting Advisory Group (EFRAG) has committed to delivering advice for streamlining the European Sustainability Reporting Standards (ESRS) in the coming weeks. The group’s chair Patrick de Cambourg confirmed a first draft will be released by 20 June with a second version by mid-July.
EFRAG, which was requested to give technical advice on modifying the sustainability standards by the European Commission, has said its “approach will build on the experience of first-wave companies that implemented ESRS”. The technical expert group will address overlaps between topical and cross-cutting standards, improve accessibility of application requirements and preserve alignment with International Sustainability Standards Board requirements.
Speaking at a recent meeting of the European parliament’s legal affairs committee, de Cambourg said the proposals will focus on “streamlined, decision-useful standards that reduce reporting effort while preserving quality and consistency”. He also noted that the revision process will take its lead from the latest omnibus proposals but will remain flexible to accommodate any changes in the final version.
Defence sector ESG risks ‘insufficiently examined’, warns investor group
An influential investor engagement group is challenging the arms industry’s ESG credentials as governments scale up military spending and investors revisit exclusion policies “once considered definitive”.
A report from investor group Shareholders for Change warns that fundamental sustainability risks in the arms sector “remain unresolved and in many cases insufficiently examined”.
The analysis highlights persistent issues including arms exports to countries with human rights violations, controversial weapons production, autonomous weapons systems, product governance failures, and what the group terms “the financialisation of war”.
The report documents successful results from their critical shareholding activities, including Italy’s partial withdrawal of arms export licenses to conflict zones. “This is not a report about idealism”, it states, noting that fiduciary duty “must evolve to account for systemic risks”.
Japan’s GX agency eyes Asian transition finance expansion
Japan’s Green Transformation (GX) Acceleration Agency is hoping to position itself as a leader in Asian transition finance by leveraging mutual flows of foreign direct investment within the region, Environmental Finance reports.
Launched in 2024, the agency is the institutional linchpin of the government’s 10-year green policy roadmap which has set targets for a 46% cut in emissions by 2030 and US$1tn in public-private investment. The roadmap covers the financing options needed to meet the the investment target, including a sovereign green transition bond, blended finance initiatives, an emissions trading scheme and a carbon levy for fossil fuel imports.
“We think transition finance is inherently important for Asian countries because many are still heavily dependent on fossil fuel energy or high-emitting industries,” said agency director Hideki Takada told Environmental Finance.
Takada said the agency will be empowered to invest equity in foreign companies or projects deemed capable of benefiting Japan. He added the agency would soon be able to announce its first supported projects, with dozens in the pipeline. These may include investments in controversial hydrogen and ammonia technologies.
Research highlights
Is Egypt Ready for the EU Carbon Border Adjustment Mechanism?
This working paper from the Economic Research Council examines Egyptian companies’ preparedness for the EU’s carbon border adjustment rules using detailed firm-level data. The results show that Egyptian firms are taking steps to comply with the rules. However, financial constraints significantly impact capital-intensive green investments, highlighting the need for access to concessional long-term financing.
Investing in Climate for Growth and Development: The Case for Enhanced NDCs
In 2025 countries have a window of opportunity to regain momentum and realise the multiple benefits of strengthened climate action as they submit updated national climate plans, according to this OECD-UNDP report. The analysis provides new evidence that accelerating climate action is not only feasible, it also makes economic sense – driving growth, unlocking development dividends and preventing losses from climate disasters.
State and Trends of Carbon Pricing 2025
The World Bank’s annual overview of global carbon pricing initiatives, tracking progress and emerging developments across jurisdictions. Results show carbon pricing now covers around 28% of global emissions.
Call for comments
- The European Banking Authority is seeking feedback on proposed amendments to ESG disclosure requirements. Responses should be submitted by 22 August 2025.
- The UK government has launched a call for evidence on how to expand private sector investment in nature recovery. The consultation focuses on supporting business investment in nature-positive outcomes, particularly from sectors with significant environmental impacts or dependencies. It closes on 7 August 2025.
This page was last updated June 13, 2025
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
