In this week’s edition of Economy and Society:
- ISO launches draft standard for net zero framework
- EU considers expanding free emissions permits for factories
- ESG legislation update
- Private banks finance climate adaptation without government funding
- SpaceX lands lowest ESG score as $75 billion IPO launches
Around the world
ISO launches draft standard for net zero framework
What’s the story?
On June 17, 2026, the International Organization for Standardization (ISO) launched a 12-week public consultation for the ISO Net Zero Aligned Organizations Standard, known as ISO 14060. According to ISO, this represents "the world’s first international independently verifiable standard designed to support organizations in developing credible and comprehensive net zero transition plans."
The consultation includes ISO's members in more than 170 countries, with national consensus positions due by early September. The British Standards Institution and ICONTEC, Colombia's National Standards Body, co-led the international working group developing the standard.
ISO 14060 requires organizations — including businesses, governments, nonprofits, universities, and financial institutions — to publish a detailed transition plan within two years of setting a net zero target. The plan must include data justifying emissions reduction strategies, timelines for planned actions, processes for integrating climate strategy into business operations, and details on carbon credit use. The standards include separate guidance for small and medium-sized companies, allowing them to report progress every three years rather than annually.
Why does it matter?
ISO says it aims to address fragmentation in net zero transition planning. Companies currently navigate multiple national disclosure rules, voluntary frameworks, sector guidance, and investor expectations. An internationally recognized standard could align these demands and help investors compare corporate climate plans across markets and sectors.
More than 130 countries have committed to net zero emissions through climate legislation, national policy frameworks, or public pledges, yet many organizations lack clear frameworks and face difficulties translating those targets into actionable implementation strategies. ISO Head of Sustainability and Partnerships Noelia Garcia Nebra said, "ISO 14060 has been developed to provide a globally agreed framework that helps organizations build credible transition plans while supporting resilience, innovation and long-term growth.”
What’s the background?
ISO 14060 builds on the ISO Net Zero Guidelines launched in 2022. The standard was developed through nearly two years of negotiations involving experts from business, government, academia, civil society, and national standards bodies.
ISO is also developing ISO 32212, a separate transition planning standard for financial institutions, and partnering with Greenhouse Gas Protocol to combine emissions accounting guidance into co-branded standards. The draft standard references the Science Based Targets initiative's (SBTi) Corporate Net Zero Standard version 2.0, released June 11.
EU considers expanding free emissions permits for factories
What’s the story?
The European Commission is preparing a proposal to increase free CO2 permits for heavy industry, responding to pressure from Italy, Poland, and the Czech Republic over carbon compliance costs. The plan would adjust the European Union's Emissions Trading System (ETS), which requires power plants, factories, and refineries to buy permits for each metric ton of CO2 they release.
According to draft conclusions for an EU leaders' summit, the Commission agreed to put forward "a separate proposal to address concerns expressed by some industrial sectors on ETS benchmarks." The changes took effect on Jan. 1, 2026, allowing chemical producers, refineries, and other high-emitting sectors to receive additional free permits.
The ETS requires companies to buy permits to emit CO2. This system includes free permits to prevent carbon leakage, where production moves to countries with weaker climate rules. The broader ETS revision is expected in mid-July.
Why does it matter?
More free permits reduce compliance costs for manufacturers but weaken the financial incentive to cut emissions. The expansion comes as manufacturers say they face unfair competition from foreign rivals with lower carbon costs.
The shift signals that the EU is prioritizing industrial competitiveness over carbon reductions. Governments want to retain manufacturing capacity while maintaining climate targets — a tension the ETS was designed to manage through carbon pricing.
In the states
ESG legislation update
Michigan and North Carolina took action on three ESG-related bills since June 16, 2026.
States with legislative activity on ESG last week are highlighted in the map below. Click here to see the details of each bill in the legislation tracker.
On Wall Street and in the private sector
Private banks finance climate adaptation without government funding
What’s the story?
The Glasgow Financial Alliance for Net Zero (GFANZ) released two reports on June 22, 2026, documenting how private financial institutions are funding climate adaptation projects globally. Private banks, insurers, and asset managers financed nearly half the projects studied by using conventional loans, bonds, and insurance products.
The reports drew on 22 detailed case studies and 40 blended finance funds — structures that combine public and private capital to finance climate adaptation projects in emerging markets. They show private finance is already addressing climate risks in agriculture, water systems, energy grids, and real estate across emerging markets and developing countries.
Why does it matter?
According to GFANZ, the reports demonstrate that private finance can support climate adaptation projects using commercial financial products. GFANZ stated that "while financial institutions are developing practical financing solutions, scaling them will require broader action across the economy, including supportive government policy, greater availability of public-good physical risk data, stronger demand signals from companies, and robust pipelines of investable projects."
GFANZ noted that developing countries need $300 billion annually by 2035 for climate adaptation, but private sources provided less than $6 billion in 2023.
What’s the background?
United Nations (UN) Special Envoy Mark Carney and the COP26 presidency founded GFANZ in April 2021 in partnership with the UN Race to Zero campaign. The initiative brings together banks, insurers, asset managers and investment firms across multiple regions to mobilize private sector capital for climate transition.
The Net Zero Asset Managers Initiative (NZAM), launched in December 2020, is a global coalition under GFANZ that provides a framework for asset managers to publicly disclose climate-related investment commitments.
SpaceX lands lowest ESG score as $75 billion IPO launches
What’s the story?
MSCI, one of the world's largest index providers, awarded SpaceX the lowest possible ESG rating on June 11, 2026, just one day before the company's record $75 billion initial public offering (IPO). The Triple C assessment puts SpaceX on par with the Russian state on MSCI's ESG government rating scale following Russia's 2022 invasion of Ukraine.
The rating cited concerns over governance standards. SpaceX scored 3.2 out of 10 in MSCI's governance score and received an orange flag in the controversies category. An orange flag is only given when a company is deemed:
- indirectly involved in very severe controversies or
- directly involved in severe controversies.
Since the IPO filing, investors and analysts raised concerns about SpaceX's share structure, limits on shareholder rights, concentration of control among insiders, potential conflicts of interest, and lack of board independence.
Why does it matter?
Edhec business school Director Frédéric Ducoulombier said, "This is very close to a governance horror story for public-market investors." He added that "it would be difficult for a serious ESG data provider, or for a fund applying its own ESG screening, not to identify major governance concerns at SpaceX."
European asset managers are debating whether SpaceX meets the EU's sustainability disclosure rules, which could limit access to any funds managing more than €6.5 trillion.
What’s the background?
MSCI underwrites more than $17 trillion in assets and has about $1.27 trillion benchmarked against its sustainability and climate-focused equity indices. The rating reflects Elon Musk's history with ESG assessments. In 2022, S&P Global dropped Tesla from the S&P 500 ESG Index over concerns, including claims of racial discrimination and lack of details on low-carbon strategy. Musk said, "ESG is a scam. It has been weaponized by phony social justice warriors."
SpaceX's governance concerns have prompted institutional action. In May 2026, Denmark's largest pension fund excluded SpaceX from its portfolio, citing governance and valuation concerns. Despite launching at $135 per share, SpaceX stock peaked around $225 before declining to $155 as of late June.
