Brazil scraps mandatory climate reporting rules

Brazil scrapped its mandatory sustainability reporting rules, the war in Iran shows how dependent Europe is on US and Russian LNG, an IMF audit finds gaps in its climate work and more in this week’s roundup.

Brazil scraps mandatory sustainability reporting for listed firms

The Brazil’s securities and exchange commission, Comissão de Valores Mobiliários (CVM), watered down a regime that would have made sustainability reporting compulsory for listed companies, even as other jurisdictions tighten disclosure requirements.

Environmental Finance reports that the CVM revoked rules that would have made reporting mandatory. 

Firms that opt to report sustainability-related financial information must still follow standards based on those of the International Sustainability Standards Board (ISSB); those that decline must flag that choice to the market under a “comply or explain” model.

The CVM said the changes “aim to improve the voluntary adoption model, preserving the transparency and comparability brought about by the need to comply with accounting standards,” while “restoring the necessary respect for the freedom of entities.” Elsewhere, critics have noted such moves widen the data gaps supervisors face when pricing transition risk.

CBI: UK net zero economy worth more than £100bn annually

The UK’s net zero economy is worth more than £100bn a year and supports over a million jobs, according to Confederation of British Industry (CBI) research that frames decarbonisation as central to growth and energy security rather than a cost.

“Clean power and decarbonisation are already a significant and growing part of the UK’s industrial base,” said Louise Hellem, CBI chief economist.

The CBI’s analysis finds about 308,000 people directly employed in fields spanning home insulation, solar installation, electric vehicles and wind turbine manufacturing, rising to 1.1mn jobs across supply chains and generating £105bn in gross value added — nearly 4% of UK output.

Net zero workers earn more than £43,000 on average, about 11% above the national average of £39,000, with an estimated £455bn of energy infrastructure investment in the pipeline.

War on Iran exposes Europe’s dependency on US and Russian LNG

One hundred days into the war in Iran, the conflict has exposed Europe’s reliance on a narrowing set of liquefied natural gas (LNG) suppliers — a concentration risk for energy-price volatility and inflation. The Institute for Energy Economics and Financial Analysis (IEEFA) analyst Ana Maria Jaller-Makarewicz notes that the region is enduring its second energy shock in under five years.

With the Strait of Hormuz effectively shut and Qatari cargoes curtailed, EU LNG imports have fallen 1.2% since March 2026 and UK imports dropped 20% year-on-year between March and May. Yet the shift has deepened dependence on the two largest suppliers: the US supplied 60% of EU LNG over March to May, up from 56% a year earlier, while year-on-year LNG imports from Russia rose 25% in the same time period.

Jaller-Makarewicz argues that “supply diversification alone does not guarantee energy security,” with resilience resting on cutting gas demand.

Bank of England climate tilt lowers borrowing costs for clean firms

Climate-tilted central bank asset purchases can lower borrowing costs for firms with credible disclosures and emissions targets, according to new research discussed by Joseph Noss, senior fellow at the London School of Economics, and Manveer Gill, sustainable finance lead at CDP, in an analysis published by CDP.

When the Bank of England (BoE) tilted its corporate bond purchase scheme towards firms with stronger climate performance in late 2021 and early 2022, spreads compressed by around 0.3 to 1.7 basis points for those issuers.

Using data on 134 issuing firms, the research finds markets responded to “forward-looking, verifiable signals” — disclosures and targets assessed against criteria including TCFD-aligned reporting — instead of past emissions performance.

IMF audits its own climate work and finds gaps

An internal evaluation of the International Monetary Fund’s (IMF) climate work has found broad membership support, despite US government pushback. However, there are significant shortcomings, including a failure to align lending with the Paris Agreement, a tension critics say directly hinders debt sustainability in climate-vulnerable economies.

Writing on LinkedIn, Federico Sibaja, IMF lead at the advocacy group Recourse, said the IMF’s Independent Evaluation Office (IEO) evaluation found the fund “has only aligned its surveillance, lending, and [capacity development] activities in a selective manner” and pointed to “clear evidence that some recent IMF-supported programs support or are reliant upon fossil fuel extraction,” citing Argentina and Uganda.

Jon Sward of the Bretton Woods Project said the fund must “heed the call of its climate-vulnerable members to transition away from an austerity-first approach.”

Climate finance push at AfDB annual meetings leads to ‘major wins for the continent’

The African Development Bank Group (AfDB) endorsed a reform agenda aiming to shape how the continent mobilises capital for a climate-resilient transition.

The strategy rests on four aims: a more agile Bank, wider access to capital, financial-system reform, and climate-resilient infrastructure, pursued under the New African Financial Architecture for Development (NAFAD). Ludovic Ngatsé, the Congo’s minister of economy and chair of the Boards of Governors, said governors had “approved and encouraged” the  vision “to strengthen Africa’s capacity for action and influence.”

Green finance featured prominently at the meetings. More than US$3bn was committed to the Congo Basin Blue Fund, which clean energy thinktank, Powershift Africa, said would fund 63 sustainable development and conservation projects. Lenders also backed Mission 300, the drive to connect 300 million people to electricity by 2030.

Powershift Africa called the gathering “a successful meeting… that could go down as one of the most consequential in the bank’s 62-year history” with “major wins for the continent,” though the US opposed the final communiqué before it was adopted.

Research Highlights

Climate Change and the Macroeconomics of Bank Capital Regulation

Journal of Monetary Economics / University of Cologne & Deutsche Bundesbank

Research using macroeconomic modelling (a multi-sector E-DSGE) shows that penalising fossil fuel lending through higher capital requirements cuts emissions by just 1% — less than today’s carbon taxes already achieve. Requirements linked to firms’ actual abatement efforts do better, achieving a 4.5% reduction, but at the cost of reduced liquidity for households. When carbon taxes rise, the model finds optimal capital requirements should be lowered accordingly. 

 

The Macroeconomic Case for Investing in Climate Adaptation

LSE Grantham Research Institute

Synthesising nearly 300 studies and over 6,000 estimates, this report warns climate change could cut average GDP per capita by 3% to 15% by 2050, while low-income countries are already 4% to 12% poorer due to climate impacts today. The research also found that adaptation investments return around £4 for every £1 spent, with around 25% rate of return and payback periods of roughly three years.

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