November Global Regulatory Brief: Green finance

The Global Regulatory Brief provides monthly insights on the latest risk and regulatory developments. This brief was written by Bloomberg’s Regulatory Affairs Specialists.

The financial sector continues to face new rules and government expectations as part of the broader effort to aid the green transition. The following green finance policy developments represent a sample of wider regulatory and policy coverage available to Bloomberg Terminal customers. Run REGS <GO> to find out more or contact your Bloomberg representative to learn more:

• EU: European Parliament Adopts Mandate on Sustainability Omnibus
• Singapore: Singapore Government Launched Carbon Market Initiatives
• Hong Kong: HKMA to issue new bank climate risk management guidances
• Bahrain: Bahrain proposes new rules for sustainability-linked debt

European parliament adopts position on sustainability omnibus package

The European Parliament has endorsed its negotiating position to simplify corporate sustainability reporting and due diligence with the aim to reduce administrative burdens for businesses. The proposal – led by Rapporteur MEP Jörgen Warborn (EPP, Sweden) – passed with 382 votes in favour, 249 against, and 13 abstentions.

The proposal limits obligations to large and very large companies and eliminates mandatory transition plans. It also envisages the creation of an EU digital portal providing free access to sustainability reporting tools and information.

Context

The update forms part of the European Commission’s Omnibus I Simplification Package tabled on 26 February 2025, which seeks to streamline the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). The vote in the European Parliament follows the Council’s earlier agreement on its negotiating mandate and reflects the EU’s broader priority to simplify rules and enhance competitiveness.

Key takeaways

• Scope reduction:
  • Sustainability reporting will apply only to firms with over 1,750 employees and net turnover above €450 million.
  • Due diligence duties will apply solely to companies with over 5,000 employees and turnover above €1.5 billion.

• Simplified reporting standards:
  • Reporting requirements under the CSRD will involve fewer qualitative disclosures; sector-specific standards will become voluntary.
  • Large firms cannot compel smaller suppliers to provide more data than required by voluntary templates, protecting SMEs from cascading obligations.

• Due diligence obligations:
  • A risk-based approach will replace blanket requirements. Large companies may rely on existing information and engage smaller partners only as a last resort.
  • The requirement to prepare climate transition plans aligned with the Paris Agreement will be removed.
  • Liability will be established and enforced at national level only (no EU-wide requirement).

• Digital portal:
  • The European Commission will establish an EU-wide online portal offering templates, guidelines, and free access to all sustainability reporting obligations.
  • The platform will complement the European Single Access Point (ESAP) initiative.

Next steps

Trilogue negotiations between the Parliament, EU Member States, and European Commission will begin on 18 November 2025, with the objective of finalising the legislation by end-2025.

Singapore government launched initiatives to support the development of high-integrity carbon markets

Summary

The Singapore Government has announced a series of coordinated initiatives to advance the development of high-integrity carbon markets, reinforcing the city-state’s role as a leading regional hub for climate finance and sustainability solutions. The initiatives, jointly led by the National Climate Change Secretariat (NCCS), Ministry of Trade and Industry (MTI), Enterprise Singapore (EnterpriseSG), and the Monetary Authority of Singapore (MAS), focus on three key areas: providing guidance for companies on the use of carbon credits, fostering an industry-led buyers’ coalition to drive credible demand, and introducing a new grant scheme to support financial institutions’ participation in carbon markets.

Together, these measures aim to catalyse market growth, strengthen confidence in carbon credit integrity, and channel capital into credible projects that contribute to the global transition towards net zero.

In more detail

Carbon markets play an increasingly important role in facilitating global decarbonisation by mobilising private capital towards emission reduction and removal projects. However, their growth has been constrained in recent years by weak demand, limited supply of high-quality credits, and gaps in market infrastructure. To address these challenges, Singapore is introducing a comprehensive framework that strengthens both demand and supply while enhancing transparency and governance.

A key component of this framework is the publication of the Voluntary Carbon Market (VCM) Guidance, developed by NCCS, MTI, and EnterpriseSG. The guidance provides a clear framework for companies on how to incorporate carbon credits into their decarbonisation strategies in a credible and transparent manner. It outlines principles for identifying high-integrity carbon credits, determining appropriate usage, and disclosing credit utilisation within corporate sustainability reporting. Developed in consultation with industry experts, academics, and international organisations, the guidance will be regularly reviewed to ensure it remains aligned with global best practices and evolving standards.

To complement the guidance, Enterprise Singapore is engaging with major corporates across Asia to form an industry-led buyers’ coalition that aligns and aggregates regional demand for high-quality carbon credits. The coalition is expected to enhance liquidity, provide stronger demand signals to project developers, and help scale the pipeline of credible carbon projects across Asia and beyond. Details on its structure and implementation are expected in 2026.

In parallel, the Monetary Authority of Singapore (MAS) will launch a Financial Sector Carbon Market Development Grant to strengthen the financial sector’s role in carbon markets. Financial institutions play a vital part in the carbon value chain — from project financing and structuring to insurance, trading, and risk management. However, early participation has been limited by high upfront costs and the complexity of developing new capabilities in this emerging field. The new grant, supported by S$15 million over three years until 2028 from the Financial Sector Development Fund, will help offset these challenges. It will support the establishment or expansion of financial institution teams engaged in carbon market activities, as well as defray costs associated with developing innovative financing structures, conducting due diligence and verification, managing risks, and purchasing carbon credit insurance. Applications will open on 1 November 2025, with details on eligibility and process available through the MAS website.

Through these initiatives, Singapore seeks to build a robust and trusted carbon market ecosystem, underpinned by integrity, transparency, and strong participation from both corporates and financial institutions. This effort builds on previous government actions, including the Carbon Project Development Grant launched at COP29 and ongoing Article 6 partnerships with international counterparts. Collectively, they form part of a broader strategy to scale up credible carbon finance and promote sustainable economic growth.

Next steps

The Singapore Government agencies will work closely with industry to promote adoption of the new VCM guidance and encourage companies to align their decarbonisation strategies with its principles.

For the financial sector, MAS will begin accepting applications for the Carbon Market Development Grant in November, prioritising projects that demonstrate strong potential to build market capacity or innovation. This phase is expected to lay the groundwork for sustained institutional participation in carbon financing, trading, and risk management.

EnterpriseSG will continue discussions with leading corporates to finalise the framework for the buyers’ coalition, with the goal of launching it in 2026. The coalition is expected to create a coordinated demand base that drives investment in verified, high-integrity carbon projects.

Over the medium term, Singapore will deepen collaboration with international partners through initiatives such as Article 6 cooperation and the Coalition to Grow Carbon Markets, enhancing cross-border trust and supporting the development of scalable, transparent carbon markets.

These efforts reinforce Singapore’s long-term vision of a credible, efficient, and high-integrity carbon market ecosystem that supports global climate goals while positioning the financial and corporate sectors for sustainable growth.

HKMA to issue new guidance on bank climate risk management good practices

The HKMA is preparing to roll out additional supervisory guidance on managing climate-related financial risks, highlighting three key trends observed in the banking industry.

In more detail

In a recent speech, Hong Kong Monetary Authority Executive Director Carmen Chu confirmed that climate risk is a financial risk impacting bank operations, collateral values, and cash flows. The HKMA is committed to solidify Hong Kong’s position as a leading sustainable finance hub by building a climate-resilient financial system, and support sustainable development in Asia and further afield. Central to this is to build a financial system that is truly climate-resilient. The Supervisory Policy Manual (GS-1) offers guidance on the essentials of climate-related risk management for banks. and two rounds of climate risk stress tests.

HKMA has supplemented this guidance by issuing circulars sharing tools and best practices that exceed minimum requirements. Furthermore, both the pilot and second rounds of sector-wide climate risk stress tests have been used to help banks enhance their methods for measuring and assessing climate exposures.

Following recent industry consultations and examinations, the HKMA plans to issue new guidance focusing on good practices adopted by Authorized Institutions, grouped under three themes:

• Quantitative Frameworks: A move toward measuring climate risk with numbers, such as using metrics and limits in risk appetite statements, and leveraging financial technology (fintech) for more efficient risk management.
• Data-Driven Approaches: Banks are bridging data gaps by utilizing tailored ESG questionnaires, alternative datasets, and proxy methods to incorporate climate factors into credit decisions.
• Holistic Views: Banks are increasingly embedding climate considerations across all traditional risk disciplines, including operational, market, liquidity, and reputational risks. The Whole Industry Simulation Exercise (WISE) focus on “extreme weather” reinforces the need for holistic operational resilience.

What’s next

The HKMA is set to release additional guidance that will provide the best practices observed in the industry to further strengthen climate risk management among banks.

HKMA to issue new guidance on bank climate risk management good practices

The HKMA is preparing to roll out additional supervisory guidance on managing climate-related financial risks, highlighting three key trends observed in the banking industry.

In more detail

In a recent speech, Hong Kong Monetary Authority Executive Director Carmen Chu confirmed that climate risk is a financial risk impacting bank operations, collateral values, and cash flows. The HKMA is committed to solidify Hong Kong’s position as a leading sustainable finance hub by building a climate-resilient financial system, and support sustainable development in Asia and further afield. Central to this is to build a financial system that is truly climate-resilient. The Supervisory Policy Manual (GS-1) offers guidance on the essentials of climate-related risk management for banks. and two rounds of climate risk stress tests.

HKMA has supplemented this guidance by issuing circulars sharing tools and best practices that exceed minimum requirements. Furthermore, both the pilot and second rounds of sector-wide climate risk stress tests have been used to help banks enhance their methods for measuring and assessing climate exposures.

Following recent industry consultations and examinations, the HKMA plans to issue new guidance focusing on good practices adopted by Authorized Institutions, grouped under three themes:

• Quantitative Frameworks: A move toward measuring climate risk with numbers, such as using metrics and limits in risk appetite statements, and leveraging financial technology (fintech) for more efficient risk management.
• Data-Driven Approaches: Banks are bridging data gaps by utilizing tailored ESG questionnaires, alternative datasets, and proxy methods to incorporate climate factors into credit decisions.
• Holistic Views: Banks are increasingly embedding climate considerations across all traditional risk disciplines, including operational, market, liquidity, and reputational risks. The Whole Industry Simulation Exercise (WISE) focus on “extreme weather” reinforces the need for holistic operational resilience.

What’s next 

The HKMA is set to release additional guidance that will provide the best practices observed in the industry to further strengthen climate risk management among banks.

The Central Bank of Bahrain proposes new rules to introduce Sustainable and Sustainability-Linked Debt Instruments

Summary

The Central Bank of Bahrain (CBB) is proposing new regulatory rules to introduce and govern the issuance of Sustainable Debt Securities (SDS) and Sustainability-Linked Debt (SLD) instruments in Bahrain. These rules are intended to align with international sustainability standards, enhance market transparency, and support Bahrain’s broader ESG goals.

The consultation invites feedback on the proposed additions to Volume 6 of the CBB Rulebook, which focuses on the offering of securities and collective investment undertakings.

Key proposals include

New Chapter on Sustainable Instruments: Addition of a new chapter in Volume 6 (Offering of Securities Module) covering requirements for SDS and SLD instruments.

Eligible Instruments: Applies to bonds, sukuk, and similar debt instruments that are either:

• Labelled as “green,” “social,” or “sustainability” (SDS), or
• Sustainability-linked (SLD) with ESG performance targets.

Disclosure Requirements: Issuers must provide pre-issuance frameworks and post-issuance reports aligned with international principles (e.g., ICMA Green Bond Principles, Sustainability-Linked Bond Principles).

Verification and Reporting: Mandatory third-party external reviews (pre- and post-issuance). Ongoing annual updates are required for transparency.

SLD-Specific Obligations: For SLDs, key performance indicators (KPIs), sustainability performance targets (SPTs), and impact of failure to meet SPTs must be clearly disclosed.

Label Use: Use of sustainability-related labels must be justified with robust documentation.

Next steps

The CBB is soliciting comments from stakeholders until 30 October 2025.