ESG International Weekly News 5/27 -6/2

1.Starbucks Launches Home Compostable and Recyclable Takeaway White Cup in Europe

Summary:
Starbucks announced that beginning June 2025, it will roll out a redesigned takeaway white cup across ten European countries, replacing the traditional plastic lining and plastic lids with a mineral-based coating (supplied by Italy’s Qwarzo) and fibre-based lids (manufactured by Transcend Packaging in Wales). This new cup can be home-composted or recycled without the need to separate plastic from paper, addressing a key sustainability challenge of current disposable cups. The paper is sourced from traceable Northern European forests via Finland’s Metsä Board. The rollout will expand to the UK and Ireland later in the year. This initiative aligns with Starbucks’ “resource positive” commitment and its global goal to offer reusable cup options for every visit by 2025.

• Product Design and Material Sourcing:

  • Cup body: Made from paper provided by Finland’s Metsä Board, utilizing traceable wood fibre from Northern European forests.

  • Inner lining: Mineral-based coating developed by Qwarzo, offering a waterproof barrier that is both recyclable and home-compostable.

  • Lid: Fibre alternatives replace plastic, coated with the same mineral-based material to ensure both cup body and lid can be composted or recycled.

• Rollout Plan and Regions:

  • Launching June 2025 in Germany, France, Spain, Italy, the Netherlands, Belgium, Luxembourg, Austria, Sweden, and Norway.

  • Scheduled to arrive in the UK and Ireland later in 2025.

• Sustainability Strategy and Targets:

  • Addresses the challenge of existing cups needing separation of plastic lining before recycling or composting, simplifying disposal for consumers.

  • Supports Starbucks’ 2022 “reusables-first” approach by incentivizing customers who bring reusable cups and offering in-store ceramic options in most European locations.

  • Aims for global availability of a reusable cup option for every visit by 2025.

Quotes:

Duncan Moir, President of Starbucks EMEA:
“Our hot cup solution is the first introduction of this emerging technology applied to a coffee cup at scale. Starbucks’ new hot cup in Europe provides a widely recyclable and home compostable alternative for when customers don’t have a reusable cup. I am really proud of the team that has worked to develop this innovative solution, and I am so excited to see it in the hands of our customers in Europe as they enjoy their coffee. We are keen to learn more from this rollout and remain focused on introducing more sustainable innovations to meet the shifting requirements of markets worldwide.”

Lorenzo Angelucci, CEO of Transcend Packaging:
“Starbucks and the Europe go-to-market commitment it has made in this new technology allows us to demonstrate the transformative potential of the packaging solution we have developed. We welcome Starbucks’ courage in innovation to redesign and totally transform its packaging production processes, creating a premium new product while removing the plastic lining in coffee cups and swapping to fibre lids.

2.European Commission Assesses Member States’ Energy and Climate Plans: EU Nearly on Track for 2030 Targets

Summary:
The European Commission today released a report evaluating EU member states’ National Energy and Climate Plans (NECPs), finding that the bloc is very close to meeting its 2030 targets, including the legally binding goal of reducing greenhouse gas (GHG) emissions by 55% relative to 1990 levels. The assessment indicates that, based on the final NECPs, the EU is on course to cut net GHG emissions by approximately 54% by 2030. Member states also aim for a 41% share of renewables, slightly below the 42.5% EU-wide target. As of the end of 2023, the EU had already achieved a 37% reduction versus 1990, despite 68% economic growth since then, and posted an 8% emissions drop in 2023 alone. In 2021, the EU enshrined the 55% reduction and 2050 climate neutrality targets into law, launching the “Fit for 55” package to expand the Emissions Trading System, introduce a carbon border adjustment mechanism, and set sectoral decarbonization policies. Draft NECPs were submitted in June 2023, with the Commission calling for improvements in December 2023; final NECPs were due June 2024, and the Commission noted “substantial improvements.” The report also found that sectors covered by the Effort Sharing Regulation—domestic transport, buildings, agriculture, small industry, and waste, representing nearly 60% of EU emissions—are on track to reduce emissions by 38% by 2030, slightly missing the 40% target, although member states’ final plans put greater emphasis on policies for decarbonizing transport and buildings. The land sector is not on track to meet its goal of an additional 42 million tonnes of CO₂ removals by 2030, as carbon sequestration has declined in recent years. Energy efficiency ambitions in NECPs amount to only an 8.1% reduction by 2030, below the 11.7% EU target. The Commission is expected to propose a 2040 emissions goal this year; in February 2024, it recommended a 90% reduction.

• GHG Emissions Reduction Progress:

  • The Commission’s assessment shows that, by 2030, the EU is projected to reduce net GHG emissions by around 54% compared to 1990—very close to the legally binding 55% target.

  • By end-2023, the EU had cut emissions by 37% relative to 1990, despite 68% GDP growth over the same period; 2023 alone saw an 8% emissions drop.

• Renewable Energy Share:

  • The EU’s 2030 target is a 42.5% renewable energy share. Member states’ NECPs collectively aim for a 41% renewable share, just below the overall target.

• “Fit for 55” Framework:

  • Legislation passed in 2021 raised the 2030 emissions reduction target from 40% to 55% and set climate neutrality for 2050.

  • Measures include expanding the EU Emissions Trading System, introducing a carbon border adjustment mechanism, and curbing emissions in key carbon-intensive sectors.

• NECP Submission and Improvements:

  • Initial NECP drafts were submitted by June 2023; the Commission’s December 2023 assessment called for stronger commitments. Final NECPs were due June 2024.

  • The Commission’s new assessment highlights that final plans exhibit “substantial improvements,” evidencing member states’ increased ambition on decarbonization pathways and policy measures.

• Effort Sharing Regulation (ESR) Sector Progress:

  • Sectors under the ESR—domestic transport, buildings, agriculture, small industry, and waste—represent nearly 60% of EU domestic emissions.

  • These sectors are projected to cut emissions by 38% by 2030, slightly short of the 40% target. The updated NECPs place greater emphasis on decarbonizing transport and buildings compared to draft versions.

• Land Sector Carbon Removal Challenges:

  • The land sector must remove an additional 42 million tonnes of CO₂ by 2030. The report notes that carbon sequestration in the land sector has declined in recent years and is not expected to improve sufficiently by 2030.

• Energy Efficiency Ambitions:

  • The EU aims to reduce energy consumption by 11.7% by 2030. Member states’ NECPs currently target only an 8.1% reduction, indicating a shortfall in energy efficiency measures.

• Outlook for 2040 Emissions Goal:

  • The Commission is set to propose a 2040 GHG reduction target later this year. In February 2024, it recommended a 90% reduction by 2040.

Quote:

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition:
“Europe is proving that reliable and predictable science-based targets and adequate regulation deliver. The updated National Energy and Climate Plans show that the green agenda is not just a target but a way to modernise our economies and to bet on industrial innovation and more opportunities for Europeans. Our task now is to deepen in our capacities and boost action with no delays. We can deliver 55% and we need to build the conditions to reach 90% by 2040.”

3.Microsoft Signs Agreement with Sublime Systems to Purchase Over 622,500 Metric Tons of Low-Carbon Cement

Microsoft has announced a long-term agreement with Sublime Systems, a spin-off from MIT founded in 2020, to purchase more than 622,500 metric tons of low-carbon cement over the next six to nine years. Traditional cement production emits over 900 kg of CO₂ per ton of product—roughly 8% of global CO₂ emissions—due to high-temperature kilns and the limestone-to-lime conversion process. Sublime’s proprietary electrolyzer technology produces cement at ambient temperatures, replacing energy‐intensive kilns and allowing CO₂ capture from limestone feedstocks. Under the agreement, Microsoft will procure Sublime cement from its first commercial plant and future full-scale factory whenever geographically feasible, and separately purchase environmental attribute certificates (EACs), decoupling the emission reductions from the physical material itself. Jeff Leeper, Microsoft’s Vice President of Global Data Center Construction, said the deal will accelerate mass production of clean building materials and help innovators overcome scaling challenges in heavy industries. Sublime CEO Dr. Leah Ellis noted that Microsoft’s commitment will catalyze the opening of their first commercial factory and rapid scale-up of production. The agreement is part of Microsoft’s broader actions to address embodied carbon, including using wood instead of steel and concrete in data center construction, updating contracts to require low-carbon materials, and investing in low-carbon materials developers (e.g., Stegra, Boston Metal, CarbonCure, Prometheus Materials) via the Microsoft Climate Innovation Fund (CIF). Katie Ross, Director of Carbon Reduction Strategy & Market Development at Microsoft, explained that buying existing low-carbon materials builds market demand, while EACs and CIF investments enable scaling new capacity, creating a positive feedback loop to drive down costs and risks.

• Cement Industry Emissions Challenge:

  • Cement production contributes approximately 8% of global CO₂ emissions, generating over 900 kg of CO₂ per 1,000 kg of cement.

  • Traditional processes rely on high-temperature kilns and release CO₂ from limestone, making decarbonization difficult.

• Sublime Systems’ Innovative Technology:

  • Founded in 2020 as an MIT spin-out, Sublime’s proprietary electrolyzer process produces cement at ambient temperatures, eliminating the need for fossil fuel–fired kilns.

  • Limestone is converted to lime at room temperature, with CO₂ released during this process captured more easily, significantly reducing GHG emissions.

• Purchase Agreement Details:

  • Microsoft will purchase up to 622,500 metric tons of low-carbon cement over six to nine years from Sublime’s first commercial factory and future full-scale plant.

  • The agreement enables Microsoft to procure the physical cement material when geographically possible and separately acquire environmental attribute certificates (EACs), similar to decoupling renewable energy certificates from energy consumption.

• Market and Scaling Impact:

  • Microsoft’s long-term off-take commitment provides Sublime with a bankable customer, de-risking investment and accelerating construction of its commercial facility.

  • The deal will help create a market for clean construction materials, supporting large-scale adoption of low-carbon cement and decarbonization of heavy industry supply chains.

• Microsoft’s Broader Low-Carbon Building Initiatives:

  • In 2024, Microsoft announced plans to prioritize wood over steel and concrete in data center construction and updated contracts to include low-carbon material requirements.

  • Through its Climate Innovation Fund (CIF), Microsoft has invested in companies such as Stegra (formerly H2 Green Steel), Boston Metal, CarbonCure, and Prometheus Materials to advance low-carbon building materials.

Quotes:

Jeff Leeper, Vice President of Global Data Center Construction at Microsoft:
“In designing creative transactions such as this one with Sublime, Microsoft aims to accelerate the mass production and adoption of clean construction materials, enabling innovators to overcome the real, acute challenges of scaling in heavy industries with existing manufacturing capacity. We need breakthrough, reimagined products like Sublime Cement at scale to reduce emissions—both at Microsoft and globally.”

Dr. Leah Ellis, CEO and Co-founder of Sublime Systems:
“This purchase enables Microsoft to access Sublime’s low-carbon cement technology regardless of where their construction is. This solves a previously intractable challenge for clean cement scale-up: the lack of long-term cement transactions contrasted with the immediate need for innovators to demonstrate bankable customers to fund their manufacturing. Microsoft is stepping up as the first customer for our future megaton-scale plant, enabling us to more rapidly build and scale Sublime Cement as a global, enduring solution for clean construction.”

Katie Ross, Director, Carbon Reduction Strategy & Market Development at Microsoft:
“Buying and using existing low-carbon materials builds the market for existing solutions, while unlocking financing through EACs and CIF ensures new production capacity for low-carbon materials. Together, this approach to building new markets creates a flywheel effect to signal demand, grow supply, and drive down costs and risk over time.

4.EBA Proposes Amendments to Pillar 3 Disclosures, Simplifying ESG Reporting for Smaller Banks

The European Banking Authority (EBA) has released proposed amendments to Pillar 3 disclosure requirements, aiming to align with the European Commission’s Omnibus package by reducing reporting costs and streamlining sustainability reporting. Under the new proposals, ESG disclosures will be proportionate to a bank’s type, size, and complexity: large institutions must provide a full set of information, other listed institutions and large subsidiaries a simplified set, and small non-complex institutions (SNCIs) an essential set. This follows the 2024 EU Banking Package (CRR3), which from 2025 extends ESG-related disclosures to all banks—covering environmental physical risks, transition risks, social and governance risks, exposures to fossil fuel entities, and how ESG risks are integrated into business strategy, governance, and risk management. Key differences among the information sets include reporting frequency (e.g., large banks semi-annually versus annually for others) and depth of metrics. Large banks must also disclose their green asset ratio (GAR) fully aligned with the EU Taxonomy, with the option to reduce certain disclosures based on materiality. The EBA has opened a public consultation on these proposals, with feedback due by August 22, 2025.

• Context & Objectives:

  • Builds on the 2024 CRR3 Banking Package, which from 2025 requires all banks—beyond just large ones—to disclose ESG risks, including physical and transition risks, social and governance risks, and exposures to the fossil fuel sector.

  • In line with the European Commission’s 2025 Omnibus package, the EBA aims to lower reporting costs and simplify sustainability reporting by tailoring obligations to institution size and complexity.

• Differentiated Disclosure Framework:

  • Large Institutions (Full Set of Information):

    • Must disclose comprehensive ESG metrics, including semi-annual reporting on “Climate Change transition risk: Credit quality of exposures by sector, emissions, and residual maturity.”

    • Must report Green Asset Ratio (GAR), fully aligned with the EU Taxonomy.

    • May reduce disclosure frequency of certain items based on materiality assessments.

  • Other Listed Institutions & Large Subsidiaries (Simplified Set):

    • Provide an annual or less-detailed version of key metrics, e.g., “Climate Change transition risk: Credit quality, emissions, and residual maturity” on an annual basis.

  • Small & Non-Complex Institutions (Essential Set):

    • Limited to core ESG disclosures, such as an annual “Transition and physical risk” report, with minimal additional social and governance risk details.

• Green Asset Ratio (GAR) Alignment:

  • Large banks must disclose their GAR—i.e., the proportion of assets aligned with sustainable activities—in full alignment with EU Taxonomy regulation to ensure comparability and transparency.

• Reduced Frequency & Simplification of Non-Core Information:

  • The EBA proposes that banks may reduce the frequency of certain disclosures if those metrics are not material to their risk profile.

  • SNCIs will face a significantly smaller reporting burden, focusing only on essential ESG risk indicators.

• Public Consultation & Timeline:

  • The EBA published the consultation paper in May 2025 and is soliciting feedback through August 22, 2025. The final amendments will be refined based on stakeholder input.

Quotes:

EBA:
“In line with the European Commission’s omnibus proposal to reduce reporting costs and simplify sustainability reporting, the EBA has designed a proportionate approach for ESG disclosures based on the institution’s type, size and complexity, with simplified disclosures for banks other than large, particularly for those that are small or non-listed.”

EBA (on large bank simplifications):
“We also aim to simplify ESG reporting for large banks by clarifying the existing requirements based on the experience gained.”

5.Hitachi Updates Environmental Innovation 2050 Strategy, Targets Net Zero GHG Across Value Chain by 2050

Japanese conglomerate Hitachi has announced a more ambitious update to its long-term “Environmental Innovation 2050” strategy, shifting from a goal of achieving carbon neutrality by 2050 to a comprehensive net zero greenhouse gas (GHG) target across its entire value chain by 2050. This new net zero commitment—validated by the Science Based Targets initiative (SBTi) in alignment with the Paris Agreement’s 1.5°C pathway—expands Hitachi’s environmental ambitions to include all GHGs. Under the revised strategy, Hitachi has broadened its initial focus on resource and water efficiency to embrace a circular economy mindset, emphasizing material reuse, recycling, and product life extension. The company also pledged to enhance its role in natural disaster mitigation and recovery through its operations and solutions. Additionally, Hitachi unveiled interim 2030 targets under its three core pillars: Decarbonization, Circular Economy, and Nature Positive. These include achieving carbon neutrality at factories and offices with a 52% reduction in value chain GHG emissions, zero landfill waste and eco-design for all product groups, a 10% reduction in water usage, and conducting both “to‐nature” and “from‐nature” impact assessments within the value chain.

• Upgraded 2050 Net Zero Target & SBTi Validation:

  • The goal has evolved from “carbon neutrality” to “net zero GHG emissions across the entire value chain,” encompassing all greenhouse gases.

  • Hitachi’s new net zero target has been validated by the Science Based Targets initiative (SBTi) as consistent with limiting global warming to 1.5°C under the Paris Agreement.

• Updated Environmental Innovation 2050 Strategy:

  • Decarbonization Pillar:

    • Commit to offering high‐efficiency products, innovative services, and future technologies to accelerate decarbonization across industries.

  • Circular Economy Pillar:

    • Expand original aims on resource and water efficiency toward a full circular economy approach, including material reuse, recycling, and extending product lifespans.

  • Nature Positive Pillar:

    • Increase engagement in natural disaster mitigation and recovery and proactively assess and reduce the environmental footprint of its value chain.

• 2030 Interim Targets:

  • Carbon Neutrality & Emissions Reduction:

    • Achieve carbon neutrality at all factories and offices by 2030.

    • Reduce value chain GHG emissions by 52% compared to the baseline year.

  • Waste & Eco-Design:

    • Reach zero landfill waste and implement eco-design principles across all relevant product portfolios.

  • Water Management:

    • Decrease overall water usage by 10% relative to the baseline year.

  • Nature Impact Assessments:

    • Conduct comprehensive assessments of both “impacts on natural ecosystems” and “dependencies on natural ecosystems” within the value chain.

Quote:

“In recent years, environmental risks have intensified. These include soaring electricity demand driven by generative AI, growing geopolitical risks on mineral resources for manufacturing products like batteries, and increasing severity of natural disasters. As society seeks innovative solutions such as the expansion of non-fossil energy, shifting to circular business models, and restoration of natural capital, Hitachi has responded with an update to its environmental vision.”