May 2025: Second-Hottest May on Record Worldwide

Today’s ESG Updates

• • EU scientists warn of rising heat: May 2025 was the second-warmest on record, with temperatures 1.4°C above pre-industrial levels.
  • Vietnam launches emissions trading scheme: Vietnam has begun piloting an emissions trading system covering key industrial sectors.
  • InvestEU boosts green finance in Bulgaria: The EBRD’s InvestEU program is mobilizing over €300 million to fund Bulgaria’s sustainable transition.
  • EU methane law faces pushback: Several EU countries are urging the simplification of methane reporting rules amid trade tensions with the U.S.
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  EU scientists share findings about increasing global heat

  Last month was the second-hottest May on record. The European Union’s Copernicus Climate Change Service (C3S) released the data in a monthly bulletin, stating that global surface temperatures were 1.4 degrees Celsius (2.5 degrees Fahrenheit) higher than the pre-industrial period. During a May heatwave, Greenland saw massive ice melting at a rate 17 times faster than average. Pakistan saw temperatures reach 50 °C (122°F). Despite the record-breaking heat that affected many communities, 1.4 degrees Celsius above pre-industrial levels was an improvement. May was the first month to drop below 1.5 °C (2.7°F) in 22 months. While the EU and China are cracking down on emissions, the U.S. is easing up. This “mixed momentum” in climate action creates more uncertainty for the future of our warming planet.

  📊 Insight: With May 2025 marking the second-warmest on record and severe global impacts, including floods in Nigeria, heatwaves in Pakistan, and rapid ice melt in Greenland, it is clear that climate risks are accelerating. These prominent natural disasters and increased global warming highlight urgent environmental and social challenges central to ESG considerations.

   

  Further reading: Month of May was world’s second-warmest on record: EU scientists

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  Pilot phase of emissions trading scheme launches in Vietnam

  

  Vietnam’s steel, cement, and thermal power producers are facing major changes as the country formally introduces its emissions trading scheme. In an effort to reach net-zero by 2050, Vietnam intends to reshape its industrial sectors to decrease carbon emissions.  Through this scheme, companies will be required to buy allowances to cover their carbon dioxide intensity. The carbon dioxide intensity will be calculated by comparing the amount of CO2 produced to unit outputs. The first phase of this scheme is expected to cover 50% of Vietnam’s total carbon emissions between now and 2029. After 2029, the country aims to expand this system to commercial buildings and cargo transportation. The scheme will offer free allowances during the first phase, aiming to introduce the regulation first and then measure its environmental impacts. 

  📊 Insight: The allowances required by the Vietnamese government are a significant step in strengthening ESG strategies, signaling stronger climate governance and aligning with global efforts toward carbon pricing and net-zero targets. The new scheme lays the groundwork for long-term environmental accountability in high-emitting sectors, such as cement, steel, and thermal power.
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  Further reading: Vietnam launches first phase of emissions trading scheme

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  InvestEU encourages sustainable investment in Bulgaria

  

  The European Bank for Reconstruction and Development (EBRD) launched a new program on Tuesday tailored to bolstering green investments in Bulgaria. The InvestEU program has an initial funding of €300 million for sustainable financing in Bulgarian businesses. It focuses on funding projects that develop and improve clean transportation, renewable energy, and energy efficiency. The goal of the initiative is to help companies enhance their ESG capabilities while mitigating risks and reducing costs. Through improved lending terms, risk-sharing tools, and hands-on support, the InvestEU program expands access to sustainable investments across large corporate businesses and individual households. The initiative is a significant move in the green transition, strengthening the country’s climate governance. 

  📊 Insight: The EBRD’s launch of the InvestEU program in Bulgaria is a significant ESG development, guaranteeing over €300 million in green finance to accelerate the country’s transition to a low-carbon economy.

   

  Further reading: EBRD launches InvestEU programme in Bulgaria’s financial sector to boost sustainable investment

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  Member countries demand EU slackens methane emissions law 

  

  Many countries within the European Union are calling for the European Commission to soften regulations around methane emissions law. As the EU transitions away from Russian gas imports, it is looking to liquefied natural gas (LNG) from the United States as a replacement. The current law requires countries in the EU to monitor and report methane emissions from oil and gas imports, which may pose a challenge, as U.S. exporters claim to be unable to track emissions along the supply chain. Governments across the EU are demanding simplification of current laws in order to reach a trade deal before the Trump administration’s July 9 tariff deadline. 

  📊 Insight: As the EU considers simplifying the law to reduce trade tensions, the debate raises crucial questions about the balance between environmental integrity and economic and geopolitical priorities in the energy transition. Companies that wish to adhere to environmental governance can look to ESG solutions.

   

  Further reading: EU countries consider softening methane emissions law on gas imports

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  Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit:  Aryan Ghauri