Sustainability reporting and carbon-accounting initiatives are giving companies more detailed frameworks for assessing environmental risks and transition investments, but financing flows remain uneven.

The International Sustainability Standards Board proposed guidance to help companies report nature-related financial risks under IFRS S1. World Bank data showed contrasting issuance trends between advanced and emerging markets, alongside differing performance across green, social and sustainability-linked instruments.

In China, industrial carbon-accounting requirements and an expanding emissions-trading market are giving companies more detailed benchmarks for measuring emissions and assessing transition investments. Green-bond activity included Bank of Chengdu’s biodiversity-focused issuance, supported by World Bank Group technical assistance.

Read more on the week’s key developments:

1. ISSB releases nature-related disclosure consultation draft

On 22 October, the International Sustainability Standards Board released a consultation draft on nature-related disclosures, proposing requirements in the form of an IFRS Sustainability Practice Statement, with comments open until 19 February 2027. IFRS S1 already requires disclosure of material nature-related information, and the proposed practice statement is intended to support consistent application of that requirement. The draft draws substantially on the Taskforce on Nature-related Financial Disclosures framework and emphasises links between nature disclosure, climate reporting and financial statement information.

Companies would not need to comply with the practice statement to state compliance with ISSB Standards. For issuers with exposure through water, land use or supply chains, the TNFD alignment provides a foundation for developing disclosures. Companies will need to connect exposure at particular locations, such as water-dependent facilities, to potential financial effects.

2. UNEP releases Emissions Gap Report 2026

On 21 October, the United Nations Environment Programme released the Emissions Gap Report 2026 in Nairobi. Between 2016 and 2025, annual greenhouse gas emissions fell in 63 countries or regions and power-sector emissions fell in 90. Of 69 significant emission reductions between 2000 and 2020, 63 occurred within two years of new or strengthened climate policies. Solar PV and wind avoided about 4.1 billion tonnes of CO₂ emissions in 2025. Global emissions have not yet peaked. Under current policies, warming could reach 2.8°C this century and increase thereafter; full implementation of Nationally Determined Contributions, followed by similar efforts, would limit warming to 2.6°C.

The report also examines a pathway with peak warming of roughly 1.7–1.8°C around mid-century and about a 50% chance of returning to or below 1.5°C by 2100. This would require emissions cuts of 18% by 2030 and 45% by 2035 against 2025 levels, alongside increasing carbon dioxide removal. The pathway would require the removal and permanent storage of roughly 320 billion tonnes of CO₂ over the century, although UNEP warns that socioeconomic and technological constraints make delivery uncertain.

3. MIIT issues implementation plan for industrial carbon-emissions control

On 21 October, China’s Ministry of Industry and Information Technology published its implementation plan for accelerating the construction of a dual-control system for carbon emissions in industry and information technology for 2026–2030. By 2030, the plan targets around 400 carbon-footprint accounting rules and standards for key industrial products and around 500 national zero-carbon factories and zero-carbon computing facilities. It also targets reductions of more than 17% in CO₂ emissions and more than 10% in energy consumption per unit of value added in industry above designated size, both against 2025 levels.

Extending control from energy consumption to carbon emissions, and pairing it with product-level footprint standards, requires more consistent measurement of factory emissions and product carbon footprints. The standards are particularly relevant to exporters facing requests for embedded-emissions data. Companies in steel, aluminium, chemicals and computing infrastructure will need to incorporate the accounting and assessment requirements into their investment plans.

4. China carbon-market trading exceeds one billion tonnes as price nears RMB 100

China’s national carbon emissions trading market closed at RMB 98.15 per tonne on 21 October, up 0.04% day-on-day. Daily trading volume was 2.5893 million tonnes, with a transaction value of RMB 249 million. By that date, cumulative trading volume had reached approximately 1.015 billion tonnes, with a cumulative transaction value of RMB 70.798 billion.

The market’s expansion to steel, cement and aluminium smelting increases the range of industrial companies facing carbon-compliance obligations. Companies must assess whether their allocated allowances cover emissions and budget for any shortfall. The cost of purchasing allowances also gives them a carbon-price benchmark against which to assess emissions-reduction investments.

5. HydoTech reports green-hydrogen project operating results

On 19 October, Chinese hydrogen-equipment supplier HydoTech released operating results associated with its 600MW green-hydrogen flagship project. A company statement republished by industry publication H2Weilai said the first hydrogen-production facilities were operating at Goldwind’s green-methanol project in Hinggan League, Inner Mongolia. HydoTech reported annual availability above 97% and a levelised cost of hydrogen as low as RMB 15 per kilogram. It also introduced the X2000 square electrolyser, with single-unit capacity of 10MW and a stated 30% reduction in capital expenditure per unit of power.

The figures are company-reported, and the statement does not establish that the full 600MW is already operating. The cost estimate cannot be compared directly with other projects without its electricity-price assumptions, operating hours and capital-cost treatment. Availability above 97% indicates equipment readiness, but does not establish how intensively the equipment operates. Lenders also need evidence of operating hours, electricity costs and contracted hydrogen sales to assess repayment capacity.

6. Chinese issuers bring green bonds to market

China’s primary green-bond market saw active issuance. China Development Bank’s RMB 8 billion follow-on issuance of “26 CDB Green Bond 02” was registered on 19 October and began trading on 20 October, following issuance on 16 October. China Resources Leasing issued RMB 500 million of “26 Run Zu GC3” carbon-neutral green corporate bonds on 21 October at a coupon of 1.63%, attracting subscriptions of 4.12 times the issue size. Separately, Bank of Chengdu issued RMB 3 billion of green bonds on 15 October, prioritising projects aligned with China’s Biodiversity Finance Guidelines.

The Bank of Chengdu transaction received technical assistance under the World Bank-led GEF-7 China Green and Carbon Neutral Cities Project. IFC supported work on the biodiversity-bond framework, including project screening, biodiversity-risk assessment, environmental-benefit measurement and disclosure. The bank received further assistance to develop the biodiversity-focused issuance, prioritising nature-based solutions for sustainable urban development.

7. Emerging markets lose share of sustainable-bond issuance

Global labelled sustainable-bond issuance reached $882 billion in the first nine months of 2026, according to World Bank Group Treasury’s third-quarter market update. Advanced-market issuance rose 13.1% year-on-year, while emerging-market issuance fell 32%. Emerging markets accounted for 12% of third-quarter issuance, down from 17% a year earlier, with declines across both public and private issuers. Green bonds represented 61.6% of issuance through September.

Performance also varied by instrument. Third-quarter green-bond issuance rose 11% year-on-year and social bonds increased 8.5%, while sustainability bonds fell 40% and sustainability-linked bonds declined 23%. Public-sector issuance through September reached $354 billion, exceeding the full-year 2025 total of $342 billion. Overall issuance fell 27% quarter-on-quarter to $248 billion, although the report noted that a third-quarter slowdown was consistent with seasonal funding patterns.

8. Khan Bank secures $172 million facility with larger local-currency tranche

On 22 October, Dutch development bank FMO announced a $172 million multi-currency syndicated facility for Mongolia’s Khan Bank. Thirty per cent of the proceeds are targeted towards green financing, with the remainder earmarked for SMEs and microenterprises, including women-owned businesses, young entrepreneurs and rural and agricultural enterprises. The syndicate includes Impact Fund Denmark, Finnfund, BlueOrchard Microfinance Fund and ILX Funds.

The facility includes an $80 million-equivalent five-year local-currency tranche funded by FMO, twice the amount in the earlier $200 million FMO-led facility. Local-currency funding helps match the currency of domestic loans, reducing currency mismatches and reliance on Mongolia’s limited hedging market. The larger tranche expands this funding channel, although the announcement does not disclose lending rates or establish whether borrowing costs will fall.

9. BNG issues $1 billion social bond

Dutch public-sector lender BNG announced a $1 billion five-year social benchmark bond on 22 October, carrying a 5% coupon and maturing on 28 October 2031. The bank issued the transaction under its Sustainable Finance Framework. Investor allocations were geographically broad, with 49% going to the Americas, 30% to Europe, the Middle East and Africa, and 21% to Asia-Pacific.

BNG finances Dutch public and semi-public organisations, including municipalities, housing associations and healthcare providers. Half of the bank is owned by the Dutch state, with the remainder held by other public authorities. Its social issuance supports a lending mandate spanning housing, healthcare, education and public infrastructure, adding supply beyond the green bonds that dominate labelled sustainable debt markets.

10. UK and Singapore discuss transition and adaptation finance

On 20 October, the UK and Singapore held their 11th bilateral financial dialogue in Singapore, discussing transition finance, climate adaptation and resilience alongside broader financial-services cooperation. The UK shared updates on its Transition Finance Pilot, Transition Finance Council Guidelines and the Green Finance Institute’s Transition Finance Lab. Singapore outlined ongoing revisions to the Singapore-Asia Taxonomy 2.0 and its experience with the Financial Sector Carbon Market Grant.

The UK also shared lessons on supporting climate adaptation through insurance markets, the FCA’s Climate Scenarios Sandbox and the Climate Financial Risk Forum. The Bank of England has warned that declining insurance coverage could transfer climate risks to households, businesses, banks and governments, making investment in resilience relevant to financial stability as well as protection against physical damage.