Key highlights from September 2025 in the sustainability space.
1- EU court rules nuclear and gas can be included in EU Taxonomy
On September 10, the EU’s General Court rejected Austria’s challenge to the European Commission’s decision to classify nuclear energy and fossil gas as potentially sustainable under the EU Taxonomy. The Court found that the Commission was “entitled to take the view” that both could, under specific conditions, contribute substantially to climate mitigation and adaptation objectives. It credited the argument that nuclear power produces near-zero greenhouse gas emissions and that low-carbon alternatives of comparable scale remain limited.
The ruling confirms the EU’s pragmatic stance on transition finance, recognizing the need for a gradual reduction in emissions while maintaining energy security. However, it has renewed debate over the taxonomy’s credibility, with critics warning that including fossil fuels and nuclear power could dilute its environmental integrity. An appeal may still be filed.
2- EU Parliament adopts waste framework revision
The European Parliament approved a revision of the EU Waste Framework Directive that creates new obligations for textile and food producers in the EU. The September 9 revision requires textile producers in the EU, including fashion brands and online retailers, to fund the collection, sorting and recycling of their products. The updated directive also introduces the EU’s first binding food waste reduction targets, requiring a 10% cut in food manufacturing and processing waste and a 30% reduction in waste from households, retail and hospitality by 2030.
The reform, initially introduced in 2023, is aimed at reducing the EU’s textile and food waste. Member states have 30 months to establish Extended Producer Responsibility (EPR) schemes, with microenterprises granted an extra year after their implementation to comply with the rules. The directive is now deemed adopted as the position was already agreed by Council this summer.
3- China unveils first absolute emissions reduction goal
On September 24, the Chinese government committed for the first time to an absolute emissions reduction target. China has thus undertaken to cut economy-wide emissions 7–10% from peak levels by 2035. President Xi Jinping announced the goal during a UN Climate Summit that marked the 10th anniversary of the Paris Agreement.
Accordingly, the world’s biggest emitter will expand wind and solar capacity to 3,600 gigawatts and increase the share of non-fossil fuels in total energy consumption to more than 30% in less than 10 years. The move signals Beijing’s intent to lead on climate diplomacy as the U.S. steps back from some environmental commitments, marking a notable milestone in global climate governance.
4- European pension fund pulls €14bn from Blackrock over ESG policy
On September 3, PFZW, one of Europe’s largest pension funds, stopped investing in stock funds managed by BlackRock citing sustainability concerns. The withdrawn investment amounts to €14bn, and points to the widening gap between European asset managers and US counterparts on issues of sustainability strategy.
BlackRock’s withdrawal from the Net Zero Asset Managers initiative and lower support for ESG resolutions have frustrated European clients, prompting funds like PFZW to seek managers better aligned with their sustainability priorities. While asset managers face a fragmented regulatory landscape on climate risk, the broader trajectory is clear: climate costs are mounting, and the energy transition is now part of the market’s foundation.
- Content prepared with the help of Defne Fresko Tasci.