The May 2026 edition of Pierag’s ESG Perspective highlights how global sustainability regulations are rapidly moving from policy intent to operational execution. This edition covers key developments across climate policy, carbon markets, ESG reporting frameworks, sustainable finance, circular economy regulations, and water resource management. For CFOs, sustainability leads, and board members, the developments in this edition are no longer horizon risks. They are current compliance and strategic planning inputs.
Download the May 2026 ESG Perspective Edition (PDF)
Carbon Markets: CBAM Definitively Aligned with EU ETS Pricing
From 1 January 2026, the EU Carbon Border Adjustment Mechanism entered its definitive phase, requiring importers of steel, aluminium, cement, fertilisers, electricity, and hydrogen to purchase CBAM certificates aligned with EU ETS carbon prices. [1] The European Commission set the Q1 2026 certificate price at EUR 75.36 per tonne of CO2e, directly reflecting the average EU ETS auction price, strengthening global carbon pricing transparency. [2]
This confirms that Indian exporters in steel and aluminium face real, quantifiable carbon cost exposure on EU-bound shipments. The first annual CBAM declaration for 2026 imports and certificate surrender is due 30 September 2027. For Indian companies, CBAM is now a finance and procurement issue, not only a regulatory compliance question.
India’s Climate Transition: Revised 2035 Targets and SAF Inclusion
India submitted revised Nationally Determined Contributions for 2035, reinforcing its net-zero-by-2070 pathway while setting near-term emissions reduction targets consistent with the Paris Agreement. Sustainable aviation fuel has been included within India’s emerging regulatory framework for aviation decarbonisation, aligning India’s approach with the EU’s ReFuelEU Aviation mandate and international SAF certification frameworks. [3] For listed companies in aviation, logistics, and energy supply chains, these developments carry direct implications for transition risk assessment and BRSR Core climate disclosures.
ESG Reporting Standardisation: GRI-CDP Alignment and ISSB Adoption
CDP has aligned its 2026 disclosure questionnaire with IFRS S2, integrating the ISSB’s climate-related disclosure standard into its platform under a “one database, multiple reports” model. [4] Companies disclosing through CDP are simultaneously building data that meets ISSB-aligned requirements, reducing duplicate reporting effort.
Global ISSB adoption continued to accelerate through Q1 2026. South Korea published KSDS 1 and KSDS 2, and the UK published sustainability reporting standards based on IFRS S1 and S2, with mandatory application from 1 January 2027. [5] Jurisdictions representing close to 60% of global GDP are now taking steps to introduce ISSB standards into their regulatory frameworks. [4]
For Indian companies with global investors, ISSB-aligned reporting is increasingly a market expectation regardless of domestic mandate. India’s BRSR Core metrics are designed to be mappable to ISSB and GRI requirements, making early BRSR Core implementation a foundation for meeting future ISSB-aligned investor disclosure requests. Pierag’s ESG Reporting and Assurance services support organisations preparing aligned disclosures across BRSR Core and ISSB frameworks.
Sustainable Finance and Circular Economy
Investment in the blue economy, covering ocean-related industries including sustainable fisheries, offshore renewable energy, and marine conservation financing, is growing as a distinct asset class within sustainability-linked bond markets. Performance-linked sustainability bonds and blended finance structures are gaining regulatory recognition, expanding access to capital at potentially favourable terms for organisations with credible transition credentials.
New circular economy and water reuse initiatives across the EU and Asia-Pacific are shifting from voluntary commitments to binding regulatory frameworks affecting manufacturing, FMCG, and infrastructure operators. These require integration into procurement strategy, product design, and BRSR Core disclosures on resource consumption and waste management.
Pierag Perspective: GCCs as ESG Execution Engines
This edition’s featured Pierag Perspective, contributed by Sanchit Gupta, Partner and COO at Pierag Consulting, examines how Global Capability Centres are emerging as strategic enablers for scalable ESG execution. GCCs with strong data governance, reporting framework management, and technology integration capabilities are being repositioned as ESG centres of excellence for parent organisations.
Frequently Asked Questions
What does the May 2026 ESG Perspective cover?
EU CBAM definitive phase pricing, India’s revised 2035 NDCs and SAF regulation, GRI-CDP and ISSB alignment progress, sustainable finance including the blue economy, circular economy and water reuse regulatory updates, and Pierag’s perspective on GCCs as ESG execution engines.
How does CBAM pricing work from 2026?
CBAM certificates are priced to match average EU ETS auction prices. The Q1 2026 price was EUR 75.36 per tonne of CO2e. Importers must declare 2026 imports and surrender certificates by 30 September 2027. [1][2]
How many jurisdictions have adopted ISSB standards?
Jurisdictions representing close to 60% of global GDP are introducing ISSB standards. South Korea and the UK published ISSB-aligned national standards in early 2026. [4][5]
Where can I find other Pierag ESG Perspective editions?
All editions are in Pierag’s Insights hub.
References
[1] International Carbon Action Partnership (ICAP). (2026). EU ETS: Definitive CBAM phase from 2026. Retrieved from https://icapcarbonaction.com/en/ets/eu-emissions-trading-system-eu-ets
[2] Carbon Credit Markets. (2026, July 19). CBAM certificates reach EUR 75.36: Q1 2026 EU ETS average. Retrieved from https://www.carboncreditmarkets.com/en/single-post/29th-week-ccm-2026-aviation-emissions-european-union-revises-ets-includes-international-aviation
[3] EY India. (2026, May 9). CBAM trends in Indian industries: How Indian exporters are adapting to carbon pricing. Retrieved from https://www.ey.com/en_in/insights/climate-change-sustainability-services/how-indian-industries-are-adapting-to-cbam-and-carbon-pricing
[4] CDP. (2026). IFRS S2 and ISSB integration into CDP 2026 questionnaire. Retrieved from https://www.cdp.net/en/about/framework-alignment
[5] S&P Global Sustainable1. (2026, May 13). May 2026: Where does the world stand on ISSB adoption? Retrieved from https://www.spglobal.com/sustainable1/en/insights/research-reports/issb-q2-2026
