Emerging and developed markets accelerate moves to clarify, regulate and verify green finance practices

The latest wave of regulatory moves across emerging and developed markets shows policymakers sharpening tools to steer capital toward a low‑carbon transition while attempting to reduce market fragmentation and greenwashing.

In South Africa, National Treasury has published a consultation paper outlining a comprehensive overhaul of the domestic carbon credit market aimed at unlocking and scaling supply for both compliance and voluntary buyers. According to the Treasury, the proposals , published on 29 October 2025 , would, among other measures, clarify the legal nature of carbon credits by classifying them as unlisted securities under the Financial Markets Act to enable trading and stronger oversight; upgrade registry architecture, including a dedicated Article 6 registry for internationally transferred mitigation outcomes; and enable the South African National Accreditation System (SANAS) to accredit local validation and verification bodies while developing fit‑for‑purpose national crediting standards. The paper also recommends easing capital and market access constraints by allowing carbon credits to be traded through existing financial infrastructure, adjusting financial market regulation and introducing an exchange control framework. Stakeholders were invited to submit feedback via an online questionnaire by 1 December 2025, signalling a fast‑moving consultation designed to link market design with broader climate policy objectives.

In Brussels, the European Commission on 19 November 2025 proposed targeted amendments to the Sustainable Finance Disclosure Regulation (SFDR) intended to tackle implementation shortcomings and make disclosures more useful for investors. The Commission’s package would simplify disclosure obligations, introduce a clearer three‑category product classification and restrict the use of ESG claims in product names and marketing to products that meet the proposed categorisation. According to the Commission, the aim is to align regulatory burdens with market realities and curb misleading sustainability labelling, a response to industry feedback and complaints that the current regime has been complex and unevenly applied.

The UK’s Financial Conduct Authority has opened a consultation on a domestic ESG ratings regime as part of efforts to boost transparency and reliability in third‑party sustainability assessments. The FCA consultation seeks views on whether and how to regulate ESG ratings providers to address conflicts of interest, methodological opacity and inconsistent outputs that market participants say complicate investment decisions. The paper frames a regulated regime as a potential way to increase comparability and market confidence in ESG scores and ratings.

Small states are also moving. Brunei’s Ministry of Finance and Economy has launched a Sustainable Finance Roadmap that sets out steps to integrate Environmental, Social and Governance factors into its financial sector. The roadmap identifies actions to expand ESG disclosures, foster green product development and position the sultanate as a regional sustainable‑finance hub, reflecting a wider push among Southeast Asian governments to attract sustainable capital.

Taken together, these initiatives illustrate two converging regulatory themes. First, authorities are prioritising market infrastructure and legal clarity to make green assets more tradable and investable , exemplified by South Africa’s proposals to recast carbon credits as tradable securities and modernise registries. Second, regulators in large capital markets are emphasising disclosure quality and label integrity to tackle greenwashing , visible in the European Commission’s SFDR amendments and the FCA’s consideration of a regulated ESG ratings framework.

Industry responses are likely to differ by jurisdiction. Market participants have previously warned that tighter disclosure rules and labelling restrictions can raise compliance costs and reduce product variety, while exchanges and asset managers argue that clearer rules could unlock institutional flows seeking credible sustainable exposures. Government statements and consultation documents stress balancing market integrity with growth: South Africa’s Treasury highlights the need for local capacity building and cost reductions in certification; the European Commission frames SFDR changes as simplification to support market functioning.

The coming months will be pivotal. Consultation deadlines and legislative timetables will determine the pace of change: South Africa’s consultation closed on 1 December 2025, the Commission set out its SFDR proposals on 19 November 2025, and the FCA consultation is under way. If enacted, the combined effect of infrastructure reform, tighter disclosure standards and potential regulation of ESG ratings could reshape how carbon credits are created, verified and priced, and how sustainable products are labelled and marketed across multiple jurisdictions.