The European Union is implementing new legislation ensuring products in the EU market are not linked to deforestation. While this law will not be effective until the end of 2025 due to an extension for the implementation process, it is important for operators to understand the ramifications of this regulation now and prepare accordingly. In response to global concerns about deforestation, the EU decided to take action and guarantee that products sold in the EU will not be associated with deforestation.

The financial sector has invested $4.6 trillion into the fossil fuel industry since the Paris Agreement. However, this figure does not account for the full scope of emissions related to financial activities, particularly those from financed emissions, known as Scope 3 emissions. When these are included, the financial industry's impact on global greenhouse gas (GHG) emissions is significantly higher, highlighting the critical need for comprehensive carbon accounting and reduction strategies.

As we move into 2023, we do so with a war in Europe, high inflation, energy markets in turmoil, political uncertainty, an ever growing list of climate-induced disasters, and a rapidly growing pressure on ESG and Sustainability. Based on the report, MSCI’s ESG and Climate Trends to Watch for 2023 we will summarize what experts in the field are watching out for in 2023 and what Sustaira hopes to provide around these topics.