The Sillion Briefing 14.02.2025
In this Briefing...
EU Omnibus – SBTi consultation
FRC assurance report – IFRS climate guide
UK Net Zero Council – Starmer Backs Nuclear
Firms drop DEI – WPP Faces OECD Complaint
Sillion's Lost in Transition: 5 Key Questions in Corporate Sustainability for 2025
We are excited to launch Lost in Transition: 5 Key Questions in Corporate Sustainability for 2025, where we explore the biggest challenges shaping the corporate sustainability landscape this year. Throughout 2025, we’ll dive into issues like regulatory changes, nature’s role, and stakeholder engagement, providing expert insights to help businesses turn sustainability commitments into action. Follow along on our LinkedIn.
Policy and regulation
Omnibus proposal likely delayed to March; double materiality in question
We are likely to see a first version of the EU’s ‘Omnibus’ proposal, which aims to reduce sustainability reporting burdens for companies, in March, a delay from the original end-of-February date. The Omnibus, which will aim to consolidate three EU regulations– the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CS3D) and the EU Taxonomy – is being taken by many of those involved in negotiations as an opportunity to make deep cuts to the scope of each framework. Most recently, the ISSB has written to the EU to advocate that CSRD use its own standards as a basis. This could ultimately involve reducing the CSRD’s double materiality approach in favour of a single materiality approach, which would focus only on the financial impacts of sustainability topics on companies – rather than also including companies’ external impacts. While this would be quite a significant alteration to the approach and scope of CSRD, it might not be worth speculating too much until we see a first proposal, such is the pace and variety of the current negotiations.
SBTi: New expert working group, Bezos pulls back
The Science Based Targets Initiative (SBTi) has launched a second public consultation and new Expert Working Groups to give businesses and other stakeholders opportunity to contribute to the update of the Corporate Net-Zero Standard. Experts are invited to apply by completing this form no later than 11:59 PM PT on Friday February 28, 2025.
Meanwhile, Jeff Bezos’ $10 billion philanthropic initiative, the Bezos Earth Fund, has severed ties with the standard-setter. Some see it as a move to curry favour with President Trump.
FRC publishes report on sustainability report assurance
As sustainability reporting matures into a fundamental part of corporate disclosures, assurance has increasingly become a part of expectations, with the market growing to meet this demand. The Financial Reporting Council (FRC), the UK’s regulator for financial reporting and accounting standards, has published a report outlining recommendations for this nascent market, noting that while it is broadly functioning well, there are concerns about maintaining high quality as demand grows. In particular, the FRC recommends a policy framework for sustainability assurance to give greater certainty and consistency for providers and reporters in the medium-term. Selecting the right provider for assurance is of great importance, especially given the increased emphasis placed on linking reporting with financial disclosures and the focus on assurance in the EU’s CSRD framework. Be in touch with Sillion if this is something you’re currently assessing and would like guidance.
IFRS publishes guide for companies prioritising climate reporting
The IFRS Sustainability Standards (also known as the ISSB Standards) are comprised of S1, covering disclosures on wider sustainability-related impacts, and S2, which is specific to disclosures on climate. For the first year of applying these standards, companies are allowed to disclose only on climate – i.e. just S2. However, if they do so, there are still parts of S1 that they have to apply – as you’d expect, these are mainly general requirements such as scope and materiality. A new guide published by the IFRS outlines these applicable parts of S1, to make things clear for companies who want to take this ‘climate-first’ approach. UK companies are likely to have to begin reporting both S1 and S2, through the UK SRS (Sustainability Reporting Standards) from FY2026 reporting. If you’d like help unpicking what this means for your reporting, be in touch with Sillion.
Government
Net Zero Council relaunched, Steel Council established
The UK Government has relaunched the Net Zero Council with a broader mandate, reinforcing its commitment to aligning economic growth with net zero goals as part of the Labour Government’s Plan for Change. This initiative brings together key figures from business, finance, and civil society, including major companies like Siemens, Nestlé, and HSBC, as well as organisations such as WWF, the Design Council, and the Trades Union Congress (TUC). Initially established under the previous administration, the council’s focus for 2025/26 includes advising on government net zero strategies, assisting businesses in developing transition plans, and supporting SMEs in their decarbonisation efforts.
Meanwhile, the Department for Business and Trade has established a new council of steel industry experts — including British Steel and Tata Steel — to help shape a Steel Strategy aimed at securing the future of UK steelmaking in the transition to net zero. Tata Steel's involvement is particularly significant, given concerns that the shift to low-carbon steel production could lead to job losses in economically disadvantaged areas. This follows the controversial plan to lay off up to 2,800 workers at Tata Steel’s Port Talbot site.
Energy
PM Keir Starmer: ‘Build, baby, build’, on nuclear
Prime Minister Sir Keir Starmer has confirmed plans to change planning rules to make it easier to construct mini nuclear power stations - or small modular reactors (SMR) - in England and Wales. SMRs are smaller and cheaper than traditional nuclear power plants but produce much less power, and no commercial SMRs are yet operational across the world. Earlier this month, Starmer issued an open invitation to tech companies including Google, Meta, and Amazon to invest in AI datacentres in Britain, with co-located SMRs.
Ad giant WPP reported to OECD for breaking ‘human rights’
Climate campaigners have filed a complaint against WPP, the world’s largest advertising firm, accusing it of violating international guidelines by helping fossil fuel giants like BP, Shell, and TotalEnergies continue polluting. The complaint, submitted under the OECD Guidelines for Multinational Enterprises, marks the first-ever case against an advertising company, potentially setting a precedent for holding agencies accountable for their role in climate harm. Since 2015, there have been 230 climate-related lawsuits against businesses and trade associations, with more than two-thirds filed since 2020. If the OECD upholds the complaint, WPP could face pressure to cut ties with fossil fuel clients and disclose the "advertised emissions" linked to its campaigns.
The NGOs behind the complaint argue that WPP enables environmental damage by running misleading green campaigns for high-polluting industries, effectively aiding fossil fuel companies in maintaining a positive public image despite their contributions to the climate crisis. According to the complaint, WPP and its subsidiary agencies — including Ogilvy — worked on at least 79 contracts for fossil fuel companies during the 2023-24 financial year, more than any other major advertising firm. Among WPP’s clients are some of the world’s biggest polluters, including Saudi Aramco, ExxonMobil, Chevron, Shell, and BP.
One Number: 15%
Global operational offshore wind capacity has increased by 15% in the past 12 months, with 81GW now operating worldwide. China has led the way, with 6.9GW of new projects.
Corporate
US firms drop DEI
Large US companies are axing diversity, equality and inclusion (DEI) programmes amid the Trump administration’s anti-diversity push. A list (quite the roster!) has been complied by Forbes here. Notable are Google, who have cut diversity hiring goals, Deloitte, who have removed pronouns from email signatures for interactions with US government clients, and Disney, who have renamed its ‘Diversity & Inclusion’ programme to the more generic ‘Talent Strategy’. Partially a cultural shift, and partially driven by the new political norms in the US, UK and EU companies haven’t yet followed suit at the same scale.
IKEA parent company cuts emissions by 30%
Ingka Group, Ikea’s parent company, has reduced absolute emissions by 30.1% since 2016, while growing revenues by 23.7% in the same period. The solid progress is backed by consistent investment in renewable energy, with €4.2Bn spent since 2009, and a focus on supply chain, with 51.3% of strategic suppliers for goods and services being committed to an SBTi target of their own.
Calendar
2025
CSRD: Undertakings previously subject to the EU's NFRD must report ESRS in their Annual Report this year (i.e. FY24 reporting) – 1st January 2025
UK SRS: UK Sustainability Reporting Standards (SRS) published – Q1 2025
UK SDR: UK Sustainability Disclosure Requirements (SDR) rules on labelling of sustainability-focused funds to come into force – April 2025
ESMA: ESMA Guidelines on fund names using ESG or sustainability-related terms to apply to funds which existed before the rule change – 21st May 2025
London Climate Action Week 2025 – 21st-29th June 2025
New York Climate Action Week 2025 – 21st-28th September 2025
COP: COP30, Belém, Brazil – November 2025
SBTi: Corporate Net-Zero Standard (CNZS) V2.0 to come into force – by end of 2025
2026
CSRD: All large undertakings must report ESRS in their Annual Report this year (i.e. FY25 reporting). In CSRD parlance, a 'large undertaking' is a company exceeding two of the three following thresholds: Balance sheet total €25 million, net turnover €50 million, 250 employees – 1st January 2026
UK SRS: UK listed companies need to begin work on their IFRS Sustainability Standards (ISSB Standards) and transition plan reporting, in order to be ready for next year
2027
UK CBAM: UK Carbon Border Adjustment Mechanism (CBAM) comes into force, initially addressing aluminium, cement, fertiliser, hydrogen, iron and steel. 1st January 2027
UK SRS: UK Sustainability Reporting Standards (SRS) to become mandatory for FY26 reporting, making the IFRS Sustainability Standards S1 and S2 (the ISSB Standards) and transition plan reporting mandatory – FY26 reporting
CSRD: Listed SMEs must report ESRS in their Annual Report this year (i.e. FY26 reporting). In CSRD parlance, an SME is a company which exceeds only one (or none) of the following thresholds: Balance sheet total €25 million, net turnover €50 million, 250 employees – 1st January 2027
CSDDD: The EU Corporate Sustainability Due Diligence Directive (CSDDD) will start applying to very large companies (over 5,000 employees and over €1.5 billion turnover) – 26th July 2027
2028
CSDDD: The EU Corporate Sustainability Due Diligence Directive (CSDDD) will start applying to large companies (over 3,000 employees and over €900 million turnover) – 26th July 2028
2029
CSRD: Non-EU undertakings with EU branches / subsidiaries must report ESRS for the previous business year. This applies if the non-EU undertaking has a net turnover generated within the EU above €150 million, and if it has either subsidiaries that are large undertakings or SMEs (CSRD definitions of these are given in the calendar above) with securities traded on an EU market; or if it has branches with net turnover generated in the EU above €40 million – 1st Jan 2029
CSDDD: The EU Corporate Sustainability Due Diligence Directive (CSDDD) will start applying to all remaining companies within its scope (over 1,000 employees and over €450 million turnover) – 26th July 2029
Questions on the above? Contact hello@sillion.co.uk with any queries, comments or feedback.