G20 countries’ sustainable finance rules have continued to expand in number and ambition, but progress on stringency and implementation has slowed as they “mature”, according to a review released on Thursday.
The Taskforce on Net Zero Policy, set up at COP28 in 2023, analyses the ambition, stringency and implementation of policy instruments using data from the Oxford Climate Policy Monitor from 2015 to July 2026.
The initiative’s report said governments are “developing more sophisticated approaches” that aim to shape corporate behaviour and strengthen risk management, but progress has slowed on implementation as jurisdictions “refine their frameworks”.
“There’s this real-world stress-testing, I think, that’s happening in the more advanced markets,” said Nathan Fabian, the taskforce’s secretary and chief policy and research officer at the Principles for Responsible Investment.
“They’re making adjustments where there are friction points, where there are inconsistencies or even in some cases where there were obligations on actors that maybe were not providing that much market-relevant information.”
The report focused on disclosure, transition planning, prudential regulation and carbon crediting rules.
Transition planning was the one area that saw policy instruments decrease after several years of growth, from 121 in 2025 to 112 in 2026. Other frameworks have continued to grow at a steady rate.
While Japan’s Green Transformation requirements entered into force, Fabian said, the EU’s revisions to the Corporate Sustainability Due Diligence Directive removed the rule – Article 22 – that mandated transition plans compatible with 1.5C.
“We’re using the word ‘maturing’ because what Europe’s done on transition planning, they’ve actually got higher transition disclosure obligations in their disclosure framework, even though they took out a specific provision on transition planning,” he added.
The scores given to G20 countries across the four areas also show a steady increase in ambition since 2015, but scores on rule stringency have remained flat since 2023.
The US scored lowest, or close to lowest, on ambition and implementation across all four areas. The report also separately assessed California, however, which scored considerably higher – particularly on carbon credits and transition planning.
Easing off
On disclosure, the research highlighted China’s introduction of double materiality. There were also advances in Japan, Mexico and Korea, but weakening on stringency in Brazil, the UK and EU.
The UK’s corporate reporting review, aimed at streamlining existing rules, has been met with concern by institutional investors, who say it could weaken governance, reduce access to decision-useful data and raise costs.
“It’s clear that regulators and market supervisors are wanting to ease off on the enforcement and strict supervision,” Fabian said.
“That’s partly because adoption is probably taking longer, and partly because of pushback from the market on learning the new obligations, the systems being available and, of course, the cost of implementing these obligations.”
The report said many of the foundations of corporate and financial climate policy are in place across the G20, so countries should now focus on strengthening regulatory capacity, closing material gaps in coverage and connecting its rules with broader sectoral policies and economy-wide strategies.
“It’s reasonable to be in a period of plateau and practical experience development,” Fabian said.
“We’ll need to adjust further to make sure that issuers are telling their story about transition, and financiers and investors are getting the data they need to make the right allocation and stewardship decisions.”
Source: www.responsible-investor.com
