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In January 2025, UN Secretary General António Guterres stated “The world now invests almost twice as much in clean energy as it does in fossil fuels”. For the first time, global energy investment will cross USD 3 trillion, with USD 2 trillion directed towards clean technologies alone. The expenses on renewable energy sources have surpassed the aggregate expenses on coal, oil, and gas. According to a report from BloombergNEF, the amount of new investment in renewable energy for the first six months of 2025 reached a record of USD 386 billion. These figures signal not just momentum, but a global race, one where social reality must remain central. The question is no longer whether the world will transition, but whether it will transition justly. Introduction A "just transition" is the process of shifting from an extractive, carbon-intensive economy to a low-carbon, regenerative one through social consciousness, equity, and participation. Born in the labor movements of North America in the 1970s, it has since evolved into a complete framework that tackles the uneven impacts of climate change and the policies intended to lessen it. Workers and communities connected with such sectors experience unpredictability and disruption because of nations shutting down fossil fuel sectors to adopt renewable energy resources. To fill such gaps, the Paris Agreement has now incorporated the concept of a just transition. It pushes nations to devise a support system, including citizens and evaluating socio economic risks. The idea is currently at the center of international decarbonization initiatives. It addresses structural injustices, including the vulnerabilities of low-income populations, historical emissions imbalances between nations, and global divide in renewable energy access. The International Labor Organization defines a just transition as: “Greening the economy in a manner that is as fair and inclusive as possible, creating decent work and leaving no one behind.” This is the goal for which governments, enterprises, and civil society must work together. The Business Case for Renewable Fuels Sound economic rationale is driving the shift to renewable fuels. Transportation regulations, aviation regulations, and heavy industry regulations are pushing the growth of the biofuels market, which is expected to cross USD 200 billion by 2030. With the increase in the adoption of Electric Mobility, Green Hydrogen is set to increase dramatically by 2030. Companies like Shell, BP, and Indian Oil Corporation are allocating massive budgets to green hydrogen hubs, advanced biofuels, and renewable blending infrastructure. Additionally, low carbon fuel production facilities hold unquantifiable value in terms of carbon credits, paving ways for new finances to be generated through Voluntary and Mandated Markets. Renewable energy forms have come to be identified not only by their significance to the environment, but also by their cost-effective and future-proof nature. Obstacles on the Way The following structural barriers continue to stand in the way of a just and inclusive transformation, regardless of the movement's acceleration: Potential Employment Disruption: By 2030, there will be 5.6 million workers in the worldwide coal industry, down from 7.8 million in 2022. Regulatory and Policy barrier: Inadequate coordination, a delayed clearance process, and a disturbed decision-making process all restrict the expansion of renewable energy sources. Lack of Data: Policies are not closely targeted since many nations lack specific data on vulnerability to workers, informal sectors, and climate-related risks. Deepening social inequality: Marginalized groups lack the training and resources which could exacerbate the existing inequalities. Labor market mismatch: Jobs may not be spatially aligned with areas losing employment due to fossil fuels, even if clean energy might provide 24 million additional jobs by 2030. Pillars of a Just Transition  According to the United Nations Economic Commission for Europe (UNECE), nations should adhere to the following six guidelines for a just transition: Social Progress: Improving lives by happiness, greater equality, and access to necessities. Workers' Protection and Empowerment: Providing a secure working environment, social security, and opportunities for reskilling and upskilling. Environmental Consciousness & Responsibility: Lowering emissions while conserving and restoring key natural habitats. Economic Success: Promoting low carbon sectors and innovative activities. Participatory Governance: Engaging communities and civil society organisations to ensure accountability and transparency. Institutional Support: Enhancing financial tools, governance frameworks, and policies. Why the Transition Must Be Just With an increasing trend towards renewables and low-carbon transitions, it is important for the transition to incorporate not only emissions but essentially people, communities, and governance frameworks that get affected by it. There are 666 million people who do not have electricity access yet, and even energy access might deteriorate if transitions take place without equity considerations. The renewable energy sources by 2050 will provide almost 52% of World’s final energy demands; this shows an unprecedented transformation on such massive scales. However, initial levels vary widely. India’s per capita energy use is now one-third of the global average, which is many times lower than what is practiced in developed nations. A technological or market forced transition might end up worsening imbalances, especially where there is little power and job distribution. Equity and justice are therefore achieved when decarbonization is linked with different sectors such as social protection and governance. Conclusion  The coming decade will decide whether the global transition will be a story of shared progress or a story of unequal growth. A just transition offers a vision of shared progress whereby renewable fuels offer more than just a low-carbon future but a future of more jobs, stable institutions, and a better quality of life. To achieve this vision, countries should dedicate equal attention to funding, technology support, and capacity building in countries, as well as investments by sectors in community and skills development. Thus, a planned and collective approach can help transform a transition towards a renewable future as a tool of inclusive growth: as urgent as it is necessary. Author - Aman Vashisth (Executive)

Standard Setters’ Updates – H2 2025 This edition provides a concise and practical overview of the most significant accounting, regulatory, and sustainability reporting developments from the second half of 2025, helping organizations prepare for upcoming changes in 2026 and beyond. Key Highlights: Major Accounting Standards Updates (ASUs) issued in H2 2025, covering credit losses, internal-use software, derivatives and hedging, purchased loans, government grants, interim reporting, and codification improvements. Simplification and consistency initiatives by FASB, aimed at reducing complexity, improving comparability, and better aligning accounting outcomes with economic substance. Snapshot of FASB current projects, including debt exchanges, environmental credit programs, crypto asset transfers, equity method improvements, and cash flow statement refinements. Regulatory developments from the SEC, including leadership changes, crypto asset guidance, AI and fraud task forces, financial reporting manual updates, and implications of major U.S. fiscal legislation. Sustainability reporting developments, highlighting ISSB exposure drafts and significant simplification of European Sustainability Reporting Standards (ESRS), with reduced reporting burden and enhanced interoperability. Practical effective-date guidance, with appendices outlining ASUs effective in 2025 and 2026 to support timely implementation planning.

Explore the insights shaping 2025’s top risk priorities and how proactive risk management can drive resilience.

India’s IT landscape has experienced a dramatic shift over recent decades, moving away from traditional, paper-dependent bookkeeping methods to a vibrant, tech-powered ecosystem. Today, organizations depend on — ranging from enterprise resource planning (ERP) tools to cloud platforms — not only to boost efficiency but also to safeguard compliance, security, and data accuracy of financial reporting. This change entails additional responsibility since keeping thorough records helps to prove financial integrity and responsibility. An audit trail acts as the "black box" of an organization—a kind of financial journal that captures every activity. It records who did what, when, and how within the financial system. This creates a straightforward way to verify the accuracy and accountability of financial records. Think of it as holding a backstage pass that lets you peek behind the curtain—offering complete visibility into every transaction for transparency, tracking access to sensitive data to bolster security, and capturing system changes to ensure compliance. With their growing importance, audit trails are now a legal must-have in India, following regulatory mandates that came into effect on April 1, 2023. The push for audit trail comes straight from the Companies (Accounts) Rules, 2014, where Rule 3(1) says any organization using accounting software—whether it's ERP systems or even web portals—must have a permanent audit trail that can't be turned off. It’s got to automatically track every change, stamp it with a timestamp, and keep those records on hand for audits. Meanwhile, auditors, under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, must double-check that this feature was running all year, and wasn't tampered with. This rule isn't just for large organizations—it applies to every Indian organization. Whether it's nonprofits under Section 8 or foreign entities, it covers everything from standalone to consolidated financial statements.

Welcome to our Standard Setters' Updates of FASB & SEC. In this publication, we present a concise overview of the latest developments in financial reporting and highlight key considerations as we move through 2025. The Accounting Updates summarize FASB's new guidance issued in the first half of the current year and highlight the accounting standards that are effective in 2025. The FASB Current Projects section provides an overview and status of the items that FASB is actively working on. The Regulatory Updates section brings you noteworthy updates from the SEC. The Sustainability Reporting Developments section outlines the changes to ISSB’s Disclosure and European Union’s Reporting requirements. The Financial Accounting Standards Board (FASB), in November 2024, issued ASU 2024-03 which requires public business entities to disaggregate expenses in the income statement into specific categories and reconcile those to the totals reported in the financial statements. Subsequently, the Board realized a clarification was needed to avoid confusion regarding when the standard applies, particularly in interim periods. Therefore, the Board issued ASU 2025-01 clarifying the effective date to be the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. In 2022, the Securities and Exchange Commission (SEC) published interpretive guidance as Staff Accounting Bulletin (SAB) No. 121 on Topic 5.FF, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users. SAB No. 121 required entities safeguarding crypto-assets to record a liability and a corresponding asset at fair value. However, this guidance created practical challenges and accounting complexities. To address these concerns, the SEC later issued SAB No. 122, rescinding the interpretive guidance published as SAB No. 121. The amendment removes the obligation to recognize a safeguarding liability and corresponding asset, instead directing entities to apply traditional loss contingency guidance under ASC 450-20: Loss Contingencies when accounting for obligations to safeguard crypto-assets. Therefore, the Board issued ASU 2025-02 to inform about SAB No. 122 rescinding the interpretive guidance in SAB No. 121. Entities should apply the rescission of Topic 5.FF on a fully retrospective basis in annual periods beginning after December 15, 2024.

In a dynamic and fast-paced global environment, organizations are navigating ever-increasing challenges driven by technological advancements, environmental demands, and changing societal expectations. These changes blur traditional risk boundaries and create a complex, interconnected risk landscape. As a result, it has become imperative for internal audit functions and organizations as a whole to develop the ability to identify, understand, and mitigate risks, enabling them to achieve resilient and sustainable growth. These emerging threats also provide internal audit teams with an opportunity to demonstrate agility, prudence, and strategic insights, thereby reinforcing their role in enhancing organizational resilience and long-term value creation. Business continuity risks are probable disruptions that hinder an organization's ability to operate effectively and deliver essential services. The disruptions may arise from multiple sources such as natural calamities, technological disruption, cybersecurity incidents, geopolitical conflicts, and supply chain disruptions. The COVID-19 pandemic or Suez Canal blockage were recent and powerful examples of how such risks can severely impact global operations. Continuity risks are highly interconnected and interdependent. A minor disruption in one part of the chain can trigger a domino effect, leading to operational and financial consequences globally. Thus, strengthening operational resilience is essential for maintaining stakeholder trust and sustaining long-term value delivery. Human capital risk is the vulnerability organizations encounter in attracting, retaining, and developing their talent. Employees are the most valuable assets and vital pillars of any organization. Failure to manage talent effectively can significantly impact business continuity, innovation, and competitive edge.

The importance of transparent financial reporting cannot be overstated in today's complex business environment. Investors, lenders, and other capital providers rely heavily on financial statements to evaluate an entity's performance, assess its prospects for future cash flows, and benchmark it against peers. A critical component of this evaluation is understanding the composition of expenses, as they often reveal key insights into cost structures, operational efficiencies, and long-term sustainability. Historically, U.S. GAAP has not required consistent disaggregation of income statement expenses, leading to diversity in reporting practices. This lack of standardization has posed challenges for users in comparing financial results across entities and industries. Recognizing this gap, the Financial Accounting Standards Board (FASB) introduced the proposed Accounting Standards Update (ASU) Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses in July 2023. After gathering extensive feedback through public comments and roundtable discussions, the FASB finalized the amendments in November 2024. These changes aim to enhance the decision-usefulness of financial reporting by requiring disaggregated expense disclosures within the footnotes of financial statements. In January 2025, FASB issued Accounting Standard Updates No. 2025-01, Income Statement-Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The updates apply to all public business entities and shall be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Securities and Exchange Board of India (SEBI) has introduced a new Industry Standard on "Minimum Information to be Provided for Review by the Audit Committee and Shareholders for Approval of Related Party Transactions (RPTs)." This standard, effective from April 1, 2025, applies to all listed entities in India and aims to standardize reporting and disclosure requirements, thereby elevating governance, transparency, and oversight of related party transactions (RPTs). The key requirements include ensuring accurate identification of all related parties as per Regulation 2(1)(zb) of SEBI’s LODR Regulations, 2015. Transactions must be classified based on materiality, distinguishing between material RPTs, transactions involving promoters or promoter groups exceeding prescribed thresholds, and residual RPTs outside the above categories. Internal auditors must verify that adequate documentation is maintained for each related party transaction (RPT), capturing all relevant details as applicable. This includes basic details of the related party, relationship and ownership of the related party, financial performance of the related party, details of previous transactions with the related party, amount of the proposed transactions, and basic details of the proposed transaction. Additional details must also be maintained for proposed transactions relating to the sale, purchase, or supply of goods or services, or any other similar business transaction; loans, inter-corporate deposits, or advances given by the listed entity or its subsidiary; investments made by the listed entity or its subsidiary; and guarantee (excluding performance guarantee), surety, indemnity, or comfort letter made or given by the listed entity or its subsidiary.

Explore how audits empower healthcare providers to tackle AI risks, policy shifts, and pricing reforms with confidence.