Net Zero Aligned Organizations Standard published by ISO to cover transition plans
The new ISO 14060 focusing on emission reduction is currently under consultation.
ISO has announced the release of its Net Zero Aligned Organizations Standard (ISO 14060) which is a standard addressing developing credible net zero transition plans aligned with the Paris Agreement. The standard is aimed at entities such as businesses and NGO’s but is not suitable for others for example public bodies, for SME’s additional guidance is provided in a dedicated section.
The standard emphasises emissions reduction within an organisations inventory boundary, especially in the near term but covers the reduction of both direct and indirect GHG emissions including the wider value chain (e.g. Scopes 1, 2 & 3).
Important points for aligning with the standard include the requirement for organisations to set both interim and long-term emissions targets, publish a transition plan within two years of setting a target and to regularly measure, report and verify emissions. Additionally, the standard covers a range of other topics including setting Scope 1, 2 and 3 targets, addressing residual emissions and how to appropriately use carbon credits.
The standard is undergoing a 12-week public consultation with a vote by ISO national members on the new standard expected later this year.
SBTi Release Version 2 of the Corporate Standard
The updated version refocuses targets to Net-Zero implementation.
SBTi released version 2 of their Corporate Net-Zero Standard, aligning with their recent 2026-2030 Strategy.
Version 2 (V2) focuses on strengthening value chain (scope 3) emissions and integration of target achievement and continuous improvement. The latest version will also introduce formal company categorisation with differentiated requirements based on company category.
The current Corporate Net-Zero Standard (Version 1.3) is still valid for companies to establish their new targets up until 31 December 2027.
Companies will have the choice to set targets in line with Version 2 or Version 1.3 of the Corporate Net-Zero Standard up until 1 January 2028, when all companies will be required to use Version 2.
EU considers expansion of CBAM scheme to include selected downstream products
The proposal suggests the inclusion of 180 steel and aluminium products with a high carbon leak risk.
Looking to avoid a shift of manufacturing from the EU other countries with weaker climate regulation, the EU is considering the introduction of a series of updates to its Carbon Border Adjustment Mechanism (CBAM). An initial proposal by the EU commission may be further strengthened by agreement reached by member states in the EU council which would expand the number of products in scope.
The initial proposal by the commission was seeking to include 180 specific steel and aluminium intensive downstream products within CBAM, identified as having a high carbon leakage risk. This included products such as machinery, hardware and vehicle components, however the new position proposed by the EU council also look to include a range of additional metal-intensive products to the scheme.
This would include things such as construction machinery and electrical equipment, where not already covered by the commission’s existing proposal by virtue of having a high share of steel or aluminium content.
Beyond the inclusion of certain downstream products, additional changes to CBAM proposed by the commission include enhanced reporting requirements to support improved traceability of goods covered by CBAM and the introduction of a number of anti-circumvention measures. The EU council’s position will inform negotiations with the EU parliament when considering the commission’s proposal to strengthen the CBAM legislation.
The EU is expected to reach a decision on its proposed CBAM updates in September this year.
Omnibus Reduces Non-EU Companies in Scope of CSRD
A simplified reporting standard will be required for the companies that remain in scope of CSRD.
According to the European Financial Reporting Advisory Group (EFRAG), the number of non-EU companies that will remain in scope with compliance of the European Union’s Corporate Sustainability Reporting Directive (CSRD) will decrease to approximately 1,200 from the initially expected 10,000.
The original CSRD regulation obliged non-EU companies with revenues greater than €150 million and had an EU based subsidiary or branch with revenues of €40 million to comply with the CSRD. The omnibus updated these thresholds to a required net revenue of at least €450 million and an EU subsidiary or branch with revenues greater than €200 million.
Non-EU companies that remain in scope will report using the N-ESRS, a simplified sustainability reporting standard designed specifically for third-country companies. Unlike the ESRS, which applies to EU companies and requires detailed entity-level disclosures, the N-ESRS focuses on consolidated group-level reporting and contains fewer disclosure requirements.
UK’s Seventh Carbon Budget Proposes Ambitious Emissions Reduction
The Seventh Carbon Budget focuses on energy security through renewables and electrification.
On 2nd June, the UK Government set a proposed seventh carbon budget with a target of an 87% reduction in emissions for the period 2038-2042. This target is influenced by: expected consumer adoption of net-zero aligned technology such as solar and EVs; reduction of fossil fuel price shocks through moving to clean energy sources; anticipated economic, environmental and health benefits of this level of emission reduction; and consistency with the Paris Agreement.
This supports the governments clean energy and climate response, aimed at reducing bills and costs for families and businesses, ensuring energy security, increasing jobs and investment in clean energy, and providing cleaner air nationwide.
Brazil Moves to Voluntary Sustainability Reporting
The CBPS moves from mandatory to voluntary reporting after 6 months.
In 2024, Brazil’s Securities and Exchange Commission (CVM) announced mandatory sustainability reporting requirements for public companies covering fiscal years beginning on or after 1 January 2026, with the first reports expected to be released in 2027.
The disclosure framework adopted the Brazilian Sustainability Pronouncements Committee (CBPS) standards, which are based on the IFRS Foundation’s International Sustainability Standards Board (ISSB) general sustainability (IFRS S1) and climate-related (IFRS S2) reporting standards.
The CVM has now amended its regulation, changing the planned mandatory reporting regime to a voluntary one. However, public companies that choose not to report must publicly disclose and explain their decision.
Companies that do report will continue to follow the CBPS standards.
COP 31 Presidency Set Out Flagship Targets
The targets follow on from COP31 President-Designate Murat Kurum’s call to “speed up the Clean Energy Transition”.
During climate negotiations on 9th June in Bonn, Germany, the COP 31 Presidency set out flagship targets in relations to electrification, waste and energy efficiency. The key target is to increase the proportion of total energy demand from electricity to 35% by 2035, which currently sits at just above 20%.
Two additional targets were also put forward, to halve waste growth rates and to reduce building energy consumption intensity by at least 25%, both also with a target date of 2035.
In order to support the progress towards these targets, the IEA has been commissioned to may pathways to achieving them and to analyse the benefits.