The Year Ahead 2022: Six themes set to shape the corporate ESG landscape in 2022

Sustainability continues to edge up the corporate agenda – so what does 2022 have in store?

Listen to our podcast on the key themes dominating the corporate ESG landscape in 2022: Apple PodcastsSpotifyYouTube.

1. ESG data to become more democratised

While many companies voluntarily disclose environmental, social, and governance (ESG) data, there is a lack of reporting regulations to define the metrics employed. This can make it difficult to evaluate them – and the targets that companies are meant to be hitting – against peers. Increasing the availability of comparable and meaningful ESG information, or ‘democratising ESG data’, – is essential to assess whether companies’ sustainability strategies and initiatives are effective. It will also help investors make better-informed decisions about which companies to support.

The year ahead will see increased availability of freely accessible resources that will help us evaluate companies’ sustainability performance. A good example is the Transition Pathway Initiative (TPI), which provides assessments of companies’ transitions to net-zero. The TPI’s new Global Climate Transition Centre, set to open in 2022, will expand the number of companies assessed from 400 to 10,000, a 25-fold increase.

Regulation also has a role to play as it can ensure the process of reporting ESG data is simplified, streamlined, and standardised. For example, the EU introduced the Non-Financial Reporting Directive in 2014, requiring around 6,000 large companies to publish standardised reports on the ESG policies they implement. In April 2021, the initiative was expanded to nearly 50,000 companies via the Corporate Sustainability Reporting Directive, with the first set of standards to be adopted by October 2022.

2. Holistic Decarbonization to become the priority

The past twelve months has seen a growing number of companies set carbon reduction targets and make commitments alongside improvements in sustainability governance, transparency, and reporting mechanisms. Building on this foundation, 2022 is likely to see entire value chains play a more pivotal role within transition strategies.

We’ll see further pressure on companies to reduce greenhouse gas emissions in line with the science-based targets and report on their progress. Wherever firms are unable to target all of their Scope 3 emissions (indirect greenhouse gas emissions within a company’s value chain), they’ll increasingly be expected to implement targets for their most material activities.

As companies seek to address Scope 3 emissions, the ability to engage with supply chains in emerging markets to reduce emissions is likely to present challenges. We expect companies to rely on partnerships across sectors to deliver on broader decarbonisation targets.

3. Green and social taxonomies will move to the fore

From 2022, the EU Taxonomy Regulation will oblige companies to report on their alignment with climate change mitigation and adaptation objectives. Alignment criteria for the remaining four categories (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and  protection and restoration of biodiversity and ecosystems) will be outlined in 2022 and enforced from January 2023.

In addition to the 'Green' Taxonomy, the EU has signalled its potential expansion to include social factors. Further details about the development of a Social Taxonomy are expected in 2022 and as a result, stakeholder pressure to account for social aspects will increase.

Taxonomies of sustainable activities aren’t exclusive to the EU. As part of its 'Build Back Better' report in July, the UK government announced its intention to produce its own green taxonomy.

The development and application of sustainable taxonomies in 2022 will increase firms’ reporting obligations and result in ESG criteria being further embedded in financing activities. Taxonomies will also provide an additional benchmark for investors and other stakeholders to assess corporate performance against, and lead to higher quality and more consistent reporting.

4. Scrutiny of greenwashing will intensify

ESG markets have come under intensifying scrutiny in recent times, not least because of a series of high-profile whistle-blowers providing details about questionable practices in organisations that claim to adopt a sustainable approach.

With awareness of greenwashing on the rise, we expect investors to analyse corporate disclosures in greater depth and breadth in 2022. We also expect healthy scepticism from various stakeholders – not just investors – about companies’ ESG claims and targets.

“Additionality” – the positive net-benefit associated with an activity or project – is therefore expected to remain high on investors’ wish-lists, with corporates able to use labelled financing to bring the biggest impact, whether targeting benefits to society or the environment. This is likely to sharpen the focus on companies, activities, projects, and expenditures, to ensure they can evidence the real-world impact of their claims

5. Private ESG funding markets to take off

Sustainable finance first emerged within public funding market – the first labelled ESG instruments were bonds issued by multinational organisations. The concept is now gaining traction in private markets, with around €2 billion of ESG-labelled private debt transactions in 2021 according to Bloomberg.

A key driver of this trend is that improved ESG disclosures and data are enabling investors to evaluate the sustainability characteristics of private assets. Companies seeking to issue a sustainable private placement (PP) can now use a sustainability-linked structure, and US-domiciled investors – which are among the largest investors in PPs – are under increasing pressure to incorporate sustainability into their mandates.

Sustainability looks set to drive execution dynamics in the private markets in 2022, and issuers with strong ESG narratives or those introducing ESG structures are likely to prove attractive to a broader investor base and, in certain cases, secure a greenium (more attractive pricing).

6. Carbon markets transparency will improve

About one fifth of the world’s largest companies have set out a net-zero or carbon-neutral pledge. With a wave of commitments in 2020 and 2021, attention has now turned to how firms are using voluntary carbon markets and buying carbon credits and offset emissions to achieve these goals. Companies will need to be more transparent in the use case of carbon credits, either to offset residual emissions, compensate for emissions in the value chain (Scope 3), or pursue “negative emissions. Nascent but fast-developing industry platforms like Project Carbon are helping to accelerate this trend.

With an agreement for implementing Article 6 cast at COP26,  we expect the transparency of carbon offset projects to improve in the near to medium term, as companies will want to understand what the return on each credit looks like (particularly as they seek to avoid accusations of greenwashing. This will help carbon to be accurately priced on a company’s or lender’s balance sheet, and in turn, help develop the liquidity of carbon as an asset class.

Download the summary report

The Year Ahead 2022 Summary Report (PDF, 5.4 MB)


This presentation has been prepared by National Westminster Bank Plc (“NatWest”) and NatWest Markets Plc and/or NatWest  Markets Securities Inc. (collectively “NWM”) or its affiliated entities (together, ”NatWest”/”NWM”, “we” or “us”)  exclusively for internal consideration by you (the “Recipient” or “you”).  This presentation is incomplete without reference to, and should be viewed solely in conjunction with, any oral briefing provided by NatWest/NWM.  NatWest/NWM and its affiliates, connected companies, employees or clients may have an interest or position in, or deal in, transactions or securities (or related securities or derivatives) of the type described in this presentation and may provide, or be seeking to provide, general banking, investment banking, credit and other financial services to any company or issuer of securities or financial instruments of the type referred to in this presentation. This material may constitute an invitation to consider entering into a derivatives transaction under U.S. CFTC Regulations sections 1.71 and 23.605, but is not and shall not be considered as a binding offer to buy or sell any financial instrument or enter into any transaction.

Nothing in this presentation should be construed as legal, tax, regulatory, accounting, finance, investment advice or other advice to you or any other party, or as a recommendation or offer, or solicitation of an offer,  by us to purchase securities from you or to sell securities to you as defined under US securities law, or to underwrite any of your securities or extend to you any credit or similar financing, or to conduct any such activities on your behalf and is not intended to form the basis of any investment decision. NatWest/NWM are not acting as advisor or fiduciary in any respect in connection with providing this information. Neither this presentation nor our analyses are, nor purport to be, appraisals or valuations of the assets, securities or business(es) of the Recipient or of any transaction counterparty.

This presentation is based solely upon information provided to NatWest/NWM by the Recipient and/or publicly available information. It reflects prevailing conditions and our initial views as at this date which we reserve the right to change from time to time. In preparing this presentation, we have relied upon and assumed, without verification, the accuracy and completeness of all information available to us, whether from public sources or provided by or on behalf of the Recipient, including any statements with respect to projections or prospects of the Recipient and related assumptions.  NatWest/NWM makes no representations or warranties (express or implied) with respect to this presentation, and disclaims all liability for any use by you, your affiliates, connected companies, employees, or your advisers make of it.  Any views expressed in this presentation (including statements or forecasts) constitute the judgment of NatWest/NWM  as of the date given and are subject to change without notice. NatWest/NWM  does not undertake to update this presentation or determine the accuracy or reasonableness of information or assumptions contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not lawfully be disclaimed. Past performance is not indicative of future performance.

NatWest/NWM transact business with counterparties on an arm’s length basis and on the basis that each counterparty is sophisticated and capable of independently evaluating the merits and risk of each transaction and that the counterparty is making an independent decision regarding any transaction.

This presentation has been prepared in response to a request to provide you with solutions to manage a risk or pursue an opportunity identified by you. This presentation is provided to you on the basis that you understand that NatWest/NWM  is not providing you with any "investment advice" within the meaning of Article 53 of the FSMA 2000 (Regulated Activities) Order 2001 and as a result, NatWest/NWM  is under no obligation to assess the suitability of the information provided in light of your knowledge and experience, financial situation and/or investment objectives. A consequence of the above is that NatWest/NWM  will not provide you with advice on the merits of buying, selling, subscribing for or underwriting (or exercising rights to acquire, dispose of or underwrite) any particular investment instrument. In accepting this information you acknowledge that you have been correctly categorised by NatWest/NWM as a Professional Client for the purposes of the Financial Conduct Authority's rules. As such, you acknowledge that you are capable of interpreting the information provided by NatWest/NWM  and using that information to take decisions as regards the merits of investing in particular investment instruments.

This presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. The information in this presentation is confidential and proprietary to NatWest/NWM  and is intended for use only by you and should not be reproduced or disclosed (in whole or in part) to any other person without our prior written consent. 

Not withstanding the foregoing (but subject to any applicable federal or state securities laws), NatWest/NWM may disclose to any and all persons, without limitation, the tax treatment and tax structure of any transaction contemplated hereby and all materials (including opinions or other tax analyses) relating thereto. IRS Circular 230 Disclosure: NatWest/NWM or affiliated entities do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with us, of any matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

No banking product or service described herein is or shall be considered as being offered by a US chartered bank or covered by FDIC insurance.

National Westminster Bank Plc. Registered in England & Wales No. 929027. Registered Office: 250 Bishopsgate, London EC2M 4AA. National Westminster Bank Plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

NatWest Markets Plc. Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh, EH2 2YB. NatWest Markets Plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is provisionally registered as a swap dealer with the United States Commodity Futures Trading Commission . Securities business in the United States is conducted through NatWest Markets Securities Inc. a FINRA registered broker-dealer (, a SIPC member ( and a wholly owned subsidiary of NatWest Markets Plc. NatWest Markets Securities Inc. is authorised by NatWest Markets Plc to act as its agent for certain kinds of its activities.  

NatWest Markets N.V. is authorised and regulated by De Nederlandsche Bank and the Autoriteit Financiële Markten.  NatWest Markets N.V. is a wholly owned direct subsidiary of NatWest Markets Plc. Registered Office: Claude Debussylaan 94, 1082 MD Amsterdam, The Netherlands.

The Royal Bank of Scotland plc and National Westminster Bank Plc are authorised to act as agent for each other.

scroll to top