BNP Paribas has released its 2025 ESG Global Survey, revealing how institutional investors are adapting their sustainability strategies in the face of shifting market dynamics, rising regulatory scrutiny, and increased public skepticism. The report surveyed 420 asset owners, asset managers, and private capital firms across 29 countries, representing a combined $33.8 trillion in assets under management, and paints a complex but ultimately optimistic picture of ESG’s evolution.

Resilient Commitment Amid a Changing Landscape

Despite growing political backlash and accusations of greenwashing in various markets, investor commitment to ESG remains strong. A large majority, 87%, said their ESG or sustainability objectives have remained stable, and fewer than 3% expect to scale back their commitments. Furthermore, 84% anticipate that their organizations will continue to progress on sustainability goals through 2030.

However, this confidence is paired with a new sense of caution. Forty-one percent of respondents reported a more restrained approach to publicly promoting their ESG activities. This shift reflects broader concerns about reputational risk and regulatory ambiguity, particularly in markets where ESG has become politicized. Still, the underlying momentum toward long-term ESG integration appears undeterred.

From Broad ESG to Thematic and Impact Strategies

The report also signals a shift from general ESG investing toward more targeted strategies, especially thematic investing. Eighty-five percent of participants now apply sustainability criteria to investment decisions, and 59% actively pursue thematic strategies such as climate resilience or social equity.
Top investment priorities over the next two years include increasing allocations to the energy transition, divesting from carbon-intensive assets, and using active ownership to push portfolio companies toward improved ESG outcomes. This thematic focus suggests a maturation of ESG strategies, with more precise goals and performance expectations.

Emergence of ESG “Pacesetters”

A standout insight from the survey is the rise of “pacesetters,” the 19% of respondents that have achieved the highest levels of ESG integration. These advanced investors have already embedded ESG factors across portfolios, including metrics related to social impact, biodiversity, and “The Just Transition Mechanism”. Nearly all pacesetters are actively decarbonizing their portfolios and report alignment with broader societal and environmental goals.

This group is not only more sophisticated in managing ESG risk but also more likely to view ESG as a long-term value driver. Their practices highlight what comprehensive ESG adoption can look like when paired with sufficient resources, internal alignment, and robust data.

Private Capital’s Expanding ESG Role

Private capital managers are also emerging as key ESG players. More than half are using active ownership strategies, while 76% emphasize social impact, and 63% are engaged in just transition initiatives. These firms see ESG as an opportunity to generate alpha, align with stakeholder expectations, and lead in sustainability-driven innovation.

The Critical Role of Data and Partnerships

Finally, the survey underscores the growing importance of ESG data and trusted partners. Nearly half of all respondents expect to increase budgets for ESG data acquisition and analysis. When selecting financial partners, ESG reputation and expertise are increasingly decisive factors.

Overall, the 2025 survey shows that institutional investors remain deeply committed to ESG, but are evolving in how they execute and communicate these strategies. The future of ESG appears less about bold declarations and more about targeted, data-driven action.

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With summer here, travelers are turning to vacation rental platforms more than ever to plan their getaways. As these platforms grow, it’s important to understand the ESG controversies they face, impacting users, hosts, and local communities worldwide.

Vacation rental platforms like Airbnb, Booking.com, Expedia, and Tripadvisor have faced several ESG challenges recently, including regulatory issues, safety and privacy concerns, and social controversies related to housing affordability and community displacement.
Different companies face varied risks: Airbnb deals with global restrictions and legal issues, Booking.com faces antitrust fines and tax disputes, Expedia contends with operational challenges, and Tripadvisor grapples with reputational concerns. All, however, must balance growth with ethical practices.

What are the most pressing ESG challenges currently facing the vacation rental sector?
Read to find out.

Booking.com has encountered various ESG risks due to regulatory scrutiny and legal issues. The company faced a €413 million fine in Spain for abusing market dominance with price parity clauses and a €94 million tax settlement in Italy for VAT compliance. Additionally, Russia penalized it for antitrust violations, while hotel operators in Japan filed lawsuits over unpaid fees. Legal scrutiny also surrounds its listings in the occupied West Bank, with investigations by Dutch prosecutors. In the U.S., a court ruled that Booking.com illegally scraped Ryanair’s website. Finally, a significant data breach exposed millions of guests’ sensitive information, raising cybersecurity concerns, and planned workforce reductions highlight ongoing operational risks for stakeholders globally.

Key Controversies:

• Booking.com fined 413 million euros by the Spanish authority CNMC for unfair competition
• ‍Booking.com to pay 94 million euros to settle Italian tax dispute
• Firms in Japan sue Booking.com in Tokyo over unpaid deposits‍
• Booking.com's listing in West Bank examined by Dutch prosecutor‍
• Booking.com aims to lay off 25% of its workforce

Airbnb: Global Crackdowns and Controversies Rise

Airbnb is facing significant regulatory and legal challenges globally, including Spain's order to remove over 65,000 listings, Italy's €576 million tax settlement, and stricter rental rules in Greece and France. In the US, cities like New York have imposed tight short-term rental limits, while Airbnb is dealing with class-action lawsuits in Canada and pricing accusations in Australia. Safety and privacy issues also plague the platform, including lawsuits related to guest deaths. Furthermore, Airbnb has been criticized for its listings on occupied Palestinian land and its impact on housing affordability. In 2023, the company cut 1,900 jobs, or about 25% of its workforce, increasing its ESG risks amidst evolving pressures.

Key Controversies:

• Spain orders removal of over 65,000 Airbnb rentals for regulatory violations
• Italy bans Airbnb self-check-ins
• Airbnb fined 300,000 euros for lack of consumer information
• Short-term rental restrictions hit Airbnb in New York
• Airbnb accused by Australian regulator of misleading pricing

Expedia: Governance Gaps and Growing Legal Risks

Expedia Group faces several ESG risks, though generally less severe than its larger peers. Key challenges include a $33 million penalty in Australia for misleading hotel rates, 1,500 job cuts, antitrust investigations in Europe, and a $29.8 million payment under the Helms-Burton Act. Legal issues also involve unpaid commissions, tax avoidance claims, and COVID-19 flight refund disputes. Governance problems include executive departures and a reverse racism lawsuit, along with data breaches affecting millions. Overall, these risks are significant but less severe than those of competitors.

Key Controversies:

• Australia fines Expedia Group's Trivago $33 mln on misleading hotel room rates
• Expedia is cutting 1,500 jobs
• US court orders Expedia to pay 29.8 million in the Helms-Burton application
• White candidate sues Expedia alleging reverse racism in hiring process
• Expedia faces class action over COVID-19 flight refund refusals

Conclusion

In conclusion, the vacation rentals sector faces significant ESG challenges that threaten its growth and credibility. Major players like Booking.com, Airbnb, and Expedia must address regulatory scrutiny, safety concerns, and social issues to meet the evolving expectations of travelers. By prioritizing transparency, community engagement, and compliance, these platforms can rebuild trust and promote responsible tourism. Embracing these changes not only mitigates risks but also positions them to lead in sustainable travel and reshape the future of vacation rentals.

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Over the past decade, many organizations have improved their carbon footprints, from recyclable and biodegradable packaging and single-use plastic to planting trees and reducing their greenhouse gas emissions. However, some businesses and companies looking to boost their eco-friendly image without committing to serious changes and addressing environmental issues have been associated with false green marketing. We call this "Greenwashing."

Defining Concepts

What is Greenwashing?

Greenwashing is a practice used by businesses to represent themselves as more sustainable than they truly are. Greenpeace and the Environmental Protection Agency define greenwashing as making false and misleading claims about a product's environmental benefits or practices, services, technology, or company practices. Greenwashing typically involves companies spending more money on advertising and marketing than on implementing sustainable business practices that minimize environmental impact. These false green claims can deceive consumers into believing that a product or company is more environmentally friendly than it is, leading to increased sales and profits. As a result, false advertising, misleading initiatives, and groundless claims have increased green investors' exposure to risks emerging from potential lawsuits from activist groups, image deterioration, and heavy losses in assets invested.

In recent years, new concepts have emerged alongside greenwashing:

• Greenhushing refers to a company’s refusal to publicize ESG information. The company may fear pushback from stakeholders who would find its sustainability efforts lacking or from investors who believe ESG undermines returns.
• Greenwishing, or unintentional greenwashing, describes a practice where a company hopes to meet certain sustainability commitments but simply does not have the means to do so.

High-Profile Greenwashing Case Studies

When talking about greenwashing, the usual suspects are the oil and gas industry, the food and beverage sector, and other environmentally impactful industries. However, the financial industry has also been embroiled in its own greenwashing controversies.

DWS Greenwashing Analysis

DWS Group has been at the center of repeated greenwashing allegations. In April 2025, the firm was fined €25 million by German prosecutors for misleading ESG claims, building on years of scrutiny. It all started in 2021 with whistleblower claims that DWS overstated its ESG credentials, triggering investigations by both U.S. and German authorities. A police raid in June 2022 led to the CEO’s resignation, and in 2023, the SEC fined DWS $25 million for ESG misstatements. Lawsuits in Germany also allege false advertising around ESG. Greenpeace condemned DWS’s ESG bonus scheme as cosmetic rather than meaningful. Despite public commitments to sustainability, these controversies underscore a pattern of overstated ESG practices designed to attract investors.

BNY Mellon Greenwashing Analysis

BNY Mellon faced similar regulatory action. In May 2022, the SEC fined BNY Mellon Investment Adviser, Inc. $1.5 million for misleading statements about ESG integration in mutual funds. Although the funds were marketed as ESG-focused, the SEC found that BNY Mellon failed to apply ESG quality review as consistently as claimed, raising concerns about greenwashing in the financial sector.

The Challenges of Detecting Greenwashing

It’s challenging to produce an accurate assessment of environmental, social, and governance (ESG) factors, which creates opportunities for companies to hide ineffective and fake green initiatives. According to Regtank, the main challenges to detecting greenwashing include:

• Lack of reporting standards – There’s no universal set of standards for ESG compliance.
• Lack of transparency – Companies often don’t disclose the specifics of their “green campaigns,” making it hard for investors and consumers to verify their claims.
• Limited consumer awareness – Misleading marketing can exploit consumers’ eco-consciousness and brand loyalty, reducing scrutiny of false green claims.
  

These gaps lead to inaccurate ESG data and scores, allowing greenwashers to avoid accountability. Ultimately, detecting greenwashing requires careful scrutiny of company claims and a deep understanding of their supply chains and operations.

How Artificial Intelligence Detects Greenwashing

As greenwashing practices become more common, activist investors, journalists, and the general public are using social media, news outlets, and blogs to highlight false claims. Artificial intelligence (AI) has become an invaluable tool in the early detection of greenwashing by analyzing vast amounts of public data.

At SESAMm, we use generative AI and LLMs to identify greenwashing risks across billions of web-based articles. Our data lake covers over 25 billion articles in more than 100 languages from four million news sources, blogs, social media platforms, and forums, analyzing data on five million public and private companies. Through our AI platform, we generate reliable, timely, and comprehensive insights to detect greenwashing, monitor ESG controversies, and identify related risks.

The Regulatory Landscape

The rise of greenwashing is not going unnoticed by regulators, as frameworks like the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) directly target misleading sustainability claims and hollow marketing.

1. The CSRD significantly strengthens the requirements for companies to substantiate their sustainability commitments. Mandating standardized and detailed ESG disclosures directly addresses the practice of greenwashing, where companies exaggerate their environmental credentials in marketing without meaningful follow-through. Under the CSRD, companies can no longer rely on vague or selectively presented data—any gaps or inconsistencies in their sustainability claims will be exposed in public filings, making greenwashing much riskier. This means an end to cherry-picked data and a shift toward more comprehensive, comparable, and verifiable ESG performance for investors and stakeholders.
2. The CSDDD (if it stands) further reinforces these efforts by obligating companies to go beyond marketing statements and prove they’re actively managing environmental and human rights impacts throughout their supply chains. This directive closes loopholes that greenwashing often exploits, such as highlighting only direct operations while ignoring supplier practices. By requiring due diligence on environmental impacts across the value chain, the CSDDD aims to turn sustainability from a branding exercise into a legal and operational priority. If real supply chain actions don’t support a company’s green claims, it could face legal action and reputational damage.

Looking Ahead

Looking ahead, greenwashing will continue to face intense scrutiny from regulators, investors, and the public. With evolving regulatory frameworks like CSRD and CSDDD, the pressure is on for companies to ensure genuine environmental responsibility—not just green advertising. At SESAMm, we believe that the combination of regulatory rigor and advanced AI technologies will play a critical role in uncovering false green claims and supporting investors in navigating ESG risks with greater transparency and accountability.

SESAMm’s AI Technology Reveals ESG Insights

Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.

As the debate around ESG investing continues to evolve, some institutions and policymakers have grown increasingly vocal in their skepticism. Questions about greenwashing, the effectiveness of ESG strategies, and even outright regulatory rollbacks have cast a shadow over the sustainability movement. However, amidst the noise and uncertainty, there are clear signs of resilience and commitment from major financial players determined to keep sustainability front and center.

Two recent initiatives by European financial leaders—Snam and La Banque Postale—demonstrate that even as some institutions step back from ESG, others are doubling down and forging ahead with ambitious plans to integrate sustainability at the heart of their financial strategies.

Snam: Pioneering Sustainability-Linked Bonds

Italy’s Snam, one of Europe’s largest energy infrastructure companies, has made a groundbreaking move in the sustainable finance arena. In a first-of-its-kind initiative, Snam issued a $2 billion sustainability-linked bond (SLB) offering directly tied to achieving net-zero targets across its whole value chain, covering scopes 1, 2, and 3 greenhouse gas emissions.

This move is particularly significant when SLB issuance has generally slowed due to concerns over the credibility of targets. Snam’s SLB, however, was met with overwhelming demand, being five times oversubscribed with an order book of nearly $10 billion. Such enthusiasm from the market underscores a growing appetite for credible and ambitious sustainability-linked investments. Moreover, by setting clear milestones—like a 25% reduction in Scope 1 and 2 emissions by 2027 and a 90% reduction across Scopes 1, 2, and 3 by 2050—Snam is making a public, measurable commitment to climate action.

La Banque Postale: Transforming Savings with ESG Tiers

France’s La Banque Postale is reshaping the investment landscape for everyday savers. The bank launched a comprehensive ESG-focused framework across its entire savings portfolio,including ordinary securities accounts, life insurance, and Share Savings Plans, making sustainable investing accessible to all customers.

The bank’s strategy is built around three distinct ESG tiers. The first excludes companies that conflict with environmental and social goals, while the second prioritizes firms with the best ESG practices. The third and most ambitious tier channels savings into impact-driven solutions—investments directly contributing to environmental and social progress. By creating these accessible, transparent pathways, La Banque Postale empowers individuals to align their savings with their values and participate in the ecological and social transition.

Positive Momentum for ESG

These two examples send a powerful message: while ESG may face headwinds in some circles, forward-thinking institutions remain firmly committed to integrating sustainability into their financial practices. This momentum is important, especially as public trust and regulatory scrutiny around greenwashing intensify.

ltimately, these initiatives remind us that sustainable finance is not about pleasing every critic. It’s about taking concrete steps to create long-term value for investors, communities, and the planet.

SESAMm’s AI Technology Reveals ESG Insights

Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.

The European Union faces a significant internal rift as its largest economies take opposing stances on the bloc's Corporate Sustainability Reporting Directive (CSRD) and CSDDD (Corporate Sustainability Due Diligence Directive), highlighting the delicate balance between environmental ambition and economic competitiveness in today's regulatory landscape.

A Continental Divide

According to recent reports, Germany and France—two of the EU's economic powerhouses—are pushing for a two-year delay to the CSRD implementation. This stance contrasts sharply with Spain and Italy, who advocate for maintaining the current timeline while potentially offering concessions to smaller businesses.

On one hand, at the Choose France summit on May 19, 2025, French President Emmanuel Macron called for the European Union to abandon the CSDDD, citing concerns over its potential impact on European competitiveness. Macron's stance aligns with German Chancellor Friedrich Merz, who also advocates for the law's repeal, arguing that it imposes excessive burdens on businesses, especially amid global competition from the U.S. and China. While some EU member states and industry leaders support revising or delaying the directive, others, including left-wing politicians and NGOs, defend it as essential for upholding European values and sustainability goals.

Spanish Environment Minister Sara Aagesen and Economy Minister Carlos Cuerpo, on the other hand, emphasized in a letter to the European Commission that sustainability reporting "supports the values and the priorities of the EU even beyond our borders, setting an example of leadership." Meanwhile, Italy's finance minister Giancarlo Giorgetti specifically urged against delaying CSRD for the tens of thousands of companies already preparing to report this year.

Why France and Germany Are Pushing Back: The Competitive Concerns

The Franco-German resistance to the current CSRD and CSDDD timeline stems from several key economic and practical concerns:

Administrative Burden on Businesses

German Finance Minister Jörg Kukies highlighted that approximately 13,000 German companies would be subject to extensive reporting requirements, with each needing "to provide around 1,000 data points or at least explain why fewer are provided." This represents a massive administrative undertaking, particularly for smaller enterprises with limited resources.

Economic Fragility and Global Competition

France's pushback comes amid broader economic concerns. The French government described the CSRD rules as "hell for companies," reflecting anxiety about imposing additional costs during a period of economic vulnerability. Both countries fear that excessive regulatory requirements could further weaken their competitive position against less-regulated economies, particularly the United States under the Trump administration, which has shown hostility toward environmental regulations.

Overlapping Regulatory Frameworks

German officials have pointed to the problem of multiple, uncoordinated sustainability reporting regimes. Kukies noted that "every CFO could tell absurd stories about how the same data has to be reported multiple times,"  arguing for a more streamlined approach where "each data point only has to be reported once."

Specific Reform Proposals

The German government has proposed significant changes, including:

• Postponing the CSRD application deadline by two years (to 2027) for large companies
• Increasing company size thresholds for reporting from €50 million in turnover to €450 million, and from 250 employees to 1,000
• Eliminating sector-specific reporting standards that would create additional complexity
  

Implications for Businesses and Investors

This regulatory uncertainty creates significant challenges for businesses operating across the EU. Companies face difficult strategic decisions about whether to proceed with sustainability reporting preparations or wait for potential rule changes.

For investors, this division introduces several critical considerations:

1. Reporting Inconsistency: Different implementation timelines across EU countries could create a patchwork of disclosure standards, complicating investment analysis.
2. Competitive Impacts: Companies in countries maintaining stricter timelines may face higher short-term compliance costs than competitors in countries securing delays.
3. ESG Data Reliability: Delays could affect the quality and comparability of ESG data, potentially undermining investor confidence in sustainability metrics.
4. Strategic Positioning: Forward-thinking companies that continue sustainability reporting preparations regardless of potential delays may gain competitive advantages in attracting ESG-focused investment.

Looking Ahead

The European Commission plans to publish an "omnibus" proposal to simplify green rules for businesses, aiming to enhance competitiveness while responding to global regulatory pressures, including potential deregulation under a second Trump administration in the U.S.

This internal EU debate reflects a broader global tension between advancing sustainability standards and addressing immediate economic pressures. Navigating this evolving regulatory landscape will require flexibility, foresight, and a balanced approach to ESG integration for businesses and investors alike.

As this situation develops, stakeholders should closely monitor European Commission decisions and prepare for multiple regulatory scenarios across the EU's diverse economic landscape.

SESAMm’s AI Technology Reveals ESG Insights

Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.

The Net Zero Banking Alliance (NZBA), a flagship initiative under the Glasgow Financial Alliance for Net Zero (GFANZ), is facing a credibility crisis. Initially launched with the bold goal of aligning the banking sector with the 1.5°C target of the Paris Agreement, the alliance has recently relaxed its ambition, now aiming merely to keep global temperature rise "well below 2°C." This move comes amid high-profile exits from major U.S. banks and growing political pressures, raising concerns about the financial sector’s true commitment to climate action.

Major Bank Withdrawals Signal Recalibration

In early 2025, five major U.S. banks, including JPMorgan Chase, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley, quietly withdrew from the NZBA. Together, their departure slashed the alliance's total assets by 22%, casting doubt on its collective impact. These institutions cited operational and regional complexities, saying a uniform global strategy was increasingly unworkable. However, critics view the withdrawals as part of a broader retreat from climate leadership, particularly as political winds shift in the U.S.

Ethical Banks Push Back

Not all members are backing away. Dutch ethical lender Triodos Bank exited the NZBA not because it opposed the ambitious goals, but because the alliance was no longer ambitious enough. The bank reaffirmed its science-based commitment to cutting emissions by 42% by 2030 and condemned the revised targets as a watering down of climate action. Triodos' stance reflects the frustration of smaller, sustainability-focused institutions that fear losing ground in the face of regulatory and political compromises.

Political Pressures and Regulatory Gaps

This shift in banking commitments comes against a backdrop of increased political scrutiny. In the U.S., Democratic lawmakers have openly criticized the banks' decisions to leave the NZBA. They have requested greater transparency regarding these exits and demanded disclosure of any correspondence with the Trump campaign, suggesting fears that ESG rollbacks may be politically motivated. Without regulatory consistency, banks face a fragmented landscape that makes sustained climate progress difficult.

The Case for Stronger Oversight

While some institutions like Standard Chartered remain committed and continue to develop detailed transition plans, the broader trend points to a gap between voluntary climate commitments and actionable progress. Experts warn that relying solely on market incentives is insufficient. A lack of standardized frameworks and enforcement mechanisms risks undermining years of ESG progress. As global climate targets grow more urgent, financial regulators may need to step in to hold institutions accountable.

Conclusion: A Critical Juncture for Financial Climate Leadership

The evolving posture of the NZBA is emblematic of a larger challenge: balancing climate ambition with operational and political realities. While flexibility may be necessary, it must not come at the expense of credibility. The next phase of climate finance will depend on whether banks can remain both profitable and purposeful, or whether regulation will need to compel them to do so.

SESAMm’s AI Technology Reveals ESG Insights

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As global scrutiny of sustainability claims intensifies, the European Securities and Markets Authority (ESMA) is stepping up its regulatory game to combat greenwashing and strengthen investor trust. In a decisive move, ESMA is tightening rules around ESG fund labeling and expanding its oversight to include ESG ratings providers—ushering in a new era of accountability and transparency across the sustainable finance landscape.

Strengthening ESG Fund Labeling

In May 2024, the European Securities and Markets Authority (ESMA) introduced final guidelines regulating the use of ESG and sustainability-related terms in fund names. These rules respond to concerns that many investment products were using “green” or “sustainable” labels without sufficient alignment to actual portfolio practices—raising risks of greenwashing.

Following the publication of official translations in August 2024, the guidelines became effective on November 21, 2024. New funds must comply immediately, while existing funds have until May 21, 2025, to align. The rules require funds using ESG-related terms to ensure that at least 80% of their assets reflect stated environmental or social characteristics. Those using terms like “sustainable” or “impact” must also apply stricter exclusions, based on EU benchmarks.

The objective is to restore trust in sustainable investing by ensuring fund marketing reflects substance, not just strategy. These guidelines mark a move from self-declared ESG ambition to measurable regulatory alignment.

The regulations faced swift opposition from industry trade groups and Republican state attorneys general, who argued the SEC had overstepped its authority. The legal challenge quickly gained momentum, and with the change in SEC leadership, the agency opted not to continue defending the rules.
Caroline Crenshaw, the lone Democratic commissioner, sharply criticized the move. She described it as an attempt to “unlawfully undo valid regulations” and accused her colleagues of “watching the rule’s demise while eating popcorn on the sidelines.”

New Rules for ESG Ratings Providers

In May 2025, ESMA extended its oversight by publishing a draft set of Regulatory Technical Standards (RTS) to regulate ESG ratings providers under the EU’s new ESG Ratings Regulation, adopted in late 2024. These rules are now under public consultation until June 20, 2025.

The draft RTS introduces key requirements: ESG ratings providers operating in the EU must be authorized and supervised by ESMA. They must also publicly disclose their methodologies, data sources, and underlying assumptions—addressing long-standing concerns over opacity and inconsistency in the ESG ratings industry.

Additionally, the proposed framework imposes safeguards to prevent conflicts of interest, particularly where firms offer ratings and related services such as consulting or data sales. The goal is to raise the independence, reliability, and comparability standards across the ESG data ecosystem.

A Unified Push Against Greenwashing

These regulatory initiatives reflect ESMA’s growing focus on creating a more credible, harmonized ESG landscape. From product labeling to third-party assessments, the authority is closing loopholes that have allowed inconsistencies and misrepresentations to persist.

The message for asset managers and ratings firms is clear: ESG marketing is no longer a grey area. Regulators expect proof of substance behind sustainability claims. Whether naming a fund or issuing a rating, firms must demonstrate transparency, governance, and alignment with new EU standards.

ESMA’s efforts also solidify Europe’s leadership in ESG regulation. While other jurisdictions still debate voluntary disclosures, the EU is moving ahead with enforceable rules that are reshaping expectations for financial products and ESG analytics. As the consultation period closes and final rules are adopted, firms operating in the EU—or servicing EU clients—will need to prepare for closer scrutiny.

SESAMm’s AI Technology Reveals ESG Insights

Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.

The Securities and Exchange Commission (SEC) has voted to cease defending its climate disclosure regulations in court, marking a significant shift in U.S. corporate sustainability reporting requirements. This decision, announced on March 27, 2025, under Acting Chairman Mark Uyeda's leadership, has substantial implications for the ESG landscape.

The Decision

The SEC’s withdrawal from defending its climate disclosure rules comes amidst ongoing litigation before the U.S. Court of Appeals for the Eighth Circuit. Originally adopted in 2024, the rules were intended to provide investors with standardized information about companies' climate-related risks, emissions, and the financial impact of those risks. Uyeda justified the withdrawal by stating, “The goal of today’s Commission action is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules.”
The regulations faced swift opposition from industry trade groups and Republican state attorneys general, who argued the SEC had overstepped its authority. The legal challenge quickly gained momentum, and with the change in SEC leadership, the agency opted not to continue defending the rules.
Caroline Crenshaw, the lone Democratic commissioner, sharply criticized the move. She described it as an attempt to “unlawfully undo valid regulations” and accused her colleagues of “watching the rule’s demise while eating popcorn on the sidelines.”

Market Implications

The decision reintroduces regulatory uncertainty for companies. Many had already begun preparing internal systems and compliance structures based on the 2024 rules. Now, in the absence of a federal standard, they may be forced to rely on voluntary reporting frameworks or navigate a fragmented set of expectations from investors, states, and international markets. This lack of uniformity is likely to lead to inconsistent reporting practices and difficulties in cross-company comparisons.
Investors, meanwhile, will face greater challenges in accessing reliable and comparable data on climate-related risks. Without SEC-mandated disclosures, much of the burden of transparency shifts to individual companies and third-party ESG data providers. Investors will likely need to increase due diligence efforts, adopt varied methodologies, and potentially absorb higher costs to obtain the data needed to manage climate risk effectively.

The Broader Context

This decision does not exist in isolation—it aligns with a broader trend of regulatory rollback on climate issues in the U.S. and signals a widening divergence between American and international disclosure approaches.

The divergence creates complexity for multinational corporations that must now navigate different expectations in different jurisdictions. This fragmentation may also create competitive disadvantages for U.S.-listed firms, especially those competing for capital in more disclosure-forward markets.

SEC Leaves the ISSB

In a related move that further isolates the U.S. from international sustainability efforts, the SEC recently withdrew from two key ISSB governance groups: the IFRS Sustainability Jurisdictional Working Group and the Sustainability Standards Advisory Forum. These groups are central to building alignment on global ESG disclosure standards.

The SEC’s exit from these forums signals a significant retreat from coordinated climate disclosure initiatives and weakens the U.S. role in shaping global ESG norms.

Market Response

Despite the rollback, some companies may continue voluntary climate-related disclosures. Those that have already invested in reporting infrastructure may opt to maintain transparency to meet investor expectations, mitigate reputational risk, and support long-term sustainability goals.

Simultaneously, ESG data providers and rating agencies are expected to play a more prominent role in filling the information gap. Financial institutions may also develop their own internal frameworks to evaluate climate risks, further privatizing what was once a public regulatory function.

Looking Forward

The path ahead remains uncertain. State-level legislation may introduce a patchwork of new rules. Global investors—particularly those with mandates in the EU or UK—may continue demanding robust disclosures from U.S. firms. And future federal administrations could choose to reintroduce or reshape mandatory disclosure regimes.
In the interim, companies and investors will need to adapt by maintaining flexible reporting systems, monitoring evolving voluntary frameworks, and diversifying their sources of ESG data. While federal requirements may have receded, the underlying investor interest in climate-related financial risk is not going away. Climate disclosure, in one form or another, remains firmly on the radar.

SESAMm’s AI Technology Reveals ESG Insights

Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.

The educational technology (EdTech) sector, including companies like Udemy, Coursera, and Byju's, has grown rapidly but faces major social and governance challenges. Key issues include costly legal battles over privacy violations and deceptive practices, which raise investor concerns. Financial instability is also prevalent, with layoffs and bankruptcies highlighting doubts about workforce rights and sustainable business models. While some companies manage ESG issues better, operational inefficiencies remain a concern for long-term stability.
What are the most pressing ESG challenges currently facing the EdTech sector? Read to find out.

BYJU’S: Treading Turbulent Waters Amidst Financial and Regulatory Challenges

Byju’s, an EdTech startup in India, has faced significant challenges since 2022. The company has dealt with controversies, including data breaches, financial mismanagement, and regulatory investigations. Key issues include the shutdown of its Kerala office, mass layoffs, allegations of Goods and Services Tax evasion, and defaults on loan payments. In 2023 and 2024, Byju's continued to struggle with layoffs, money laundering investigations, and the resignation of executives. As of 2024, the company is at risk of insolvency, with ongoing bankruptcy proceedings and regulatory action against its leadership, highlighting its financial instability after years of rapid growth.

Key Controversies:

• Congress MP Karti Chidambaram urges SFIO to probe Byju's finances
• Byju's shuts down Kerala office, forces employees to resign
• India Raids Byju’s Offices in Money Laundering Probe
• Byju's Lays Off Over 1,000 Employees, 2nd Mass Job Cut In A Year
• Byju's US Unit Files For Chapter 11 Bankruptcy Amid Financial Turmoil

Udemy: Battling Legal and Ethical Challenges in the E-Learning Landscape

Udemy, a leading e-learning platform, has encountered increasing legal, financial, and operational challenges. These include a settlement over deceptive pricing practices, antitrust issues leading to a board member's resignation, and multiple lawsuits related to Facebook data sharing and video privacy violations. The company has also restructured its workforce to streamline operations and faced concerns over its generative AI policy regarding consent and transparency among instructors. These controversies highlight the complexities faced by EdTech companies in navigating legal and ethical challenges.

Key Controversies:

• Udemy Agrees to Pay $4 Million Settlement Over Deceptive Pricing Practices
• Udemy Board Member Resigns Due to Antitrust Concerns by Justice Department
• Udemy Faces Lawsuits Over Facebook Data Sharing
• Udemy class action over violations of the Video Privacy Protection Act
• Generative AI policy at Udemy raises consent and transparency concerns
• Massive E-Learning Platform Udemy Gave Teachers a Gen AI 'Opt-Out Window'. It's Already Over.

Coursera: Navigating Challenges in Security, Ethics, and Workforce Dynamics

Coursera, another widely used online learning platform, has faced relatively few controversies as reflected by its Controversy Exposure Score. However, a few noteworthy challenges include security vulnerabilities, AI use, an investigation into misleading financial statements, and workforce reductions due to declining growth. The company is dealing with a class action lawsuit over subscription renewals and a data privacy lawsuit for sharing customer viewing history with Meta. Coursera also faces controversies related to AI, in this case on AI-powered tools for grading, providing feedback, and course-building, promising greater efficiency but raising questions about transparency and ethics. Finally, as part of restructuring, Coursera plans to cut its global workforce.

Key Controversies:

• Investigation for potential violations of securities laws related to misleading financial statements
• Coursera reducing workforce to counter declining growth
• Coursera Hit With Class Action Over Subscription Renewals
• Coursera data privacy class action lawsuit
• Coursera Faces Video Privacy Class Action Lawsuits

Conclusion

Each of these companies illustrates the growing ESG challenges in the EdTech sector. From maintaining data privacy and ethical AI use to ensuring sound governance, financial sustainability, and fair treatment of employees and customers, Udemy, Coursera, and BYJU’S all face heightened scrutiny. Recent controversies and operational troubles highlight the need for robust risk management as education technology firms mature on the global stage. The ESG risks – whether legal, social, or governance-related – not only threaten their reputations but also have material impacts on their long-term viability. By addressing these issues transparently and proactively, EdTech companies can work toward a more sustainable and responsible growth trajectory in the years ahead.

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