Your January Sustainability Wrap-Up

If you're like most sustainability professionals, you probably spent the holidays blissfully ignoring LinkedIn notifications and pretending carbon footprints only referred to winter boot prints in the snow. Well, January 2026 just delivered the busiest, most consequential three weeks in carbon accounting history. If you blinked, you missed some game-changing developments.

Don't panic. We've got you covered. Think of this as your friendly neighborhood carbon accounting catch-up, like that one colleague who actually reads all the regulatory updates and summarizes them over coffee.

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The "Did That Really Happen on New Year's Day?" Moment

Remember all those "CBAM is coming" warnings from 2025? Well, it's here, and it's working better than most people's New Year's fitness resolutions.

The EU's Carbon Border Adjustment Mechanism officially entered its definitive phase on New Year's Day, which means companies are now paying real money for carbon-intensive imports. And the first week numbers? They're honestly impressive:

• 12,000+ operators scrambled to get CBAM authorization (apparently procrastination isn't just a personal problem)
• 10,483 customs declarations processed in the first week alone
• 1.66 million tonnes of goods covered—98% of which was iron and steel

The real kicker? The first actual certificate surrender happens in February 2027 for 2026 imports. So while you were making resolutions about eating less sugar, the EU was making carbon pricing at borders a very expensive reality.

Turkey, China, and India are probably having some interesting internal conversations right about now.

Here's what most people are missing: CBAM isn't just a regulatory compliance exercise. It's creating a two-tier market where low-carbon suppliers have a concrete price advantage. If your competitors are securing lower-carbon inputs while you're stuck with high-carbon suppliers, you're not just paying more in CBAM certificates, you're losing market share.

Also: don’t miss our Davos 2026 Wrap-updon’t miss our Davos 2026 Wrap-up

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When Mining Meets Carbon Squeeze

On January 15th, Rio Tinto and Amazon Web Services announced a collaboration that sounds like science fiction but is actually happening right now.

Rio Tinto's Nuton Technology has achieved industrial-scale bioleaching—basically using naturally occurring microorganisms to extract copper instead of traditional smelting. The result? Copper production with a carbon footprint of just 2.82 kgCO₂e per kilogram (the global average ranges from 1.5 to 8.0).

The technology eliminates traditional concentrators, smelters, and refineries entirely, producing 99.99% pure copper cathode directly at the mine. It uses 71 liters of water per kilogram versus the industry average of 130 liters, runs on 100% renewable electricity, and makes the Johnson Camp facility in Arizona the lowest-carbon primary copper producer in the U.S.

Why this matters more than just copper: AWS didn't make this deal because they're nice. They made it because their customers demand low-carbon data centers, and copper is a massive part of that footprint. This is the new playbook: major buyers will increasingly require product-level carbon data and give preference to low-carbon suppliers.

The carbon squeeze is real: CBAM creates financial penalties for high-carbon imports from one direction. Customer requirements like AWS create market pressure from the other. Companies caught in the middle without verified low-carbon alternatives are going to find themselves priced out—literally and competitively.

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A New Global Carbon Accounting Framework

The ICC and Carbon Measures are taking a shot at standardization

On January 18-19, the International Chamber of Commerce and Carbon Measures announced a Technical Expert Panel aimed at creating a global, ledger-based carbon emissions accounting system.

The panel includes some heavyweight names:

• Amy Luers from Microsoft
• Kate Maher from Stanford
• Jakob Stausholm, former Rio Tinto CEO
• Experts from Tata Steel, Banco Santander, Bayer, and Mitsui

Their stated mission? Create verifiable, product-level carbon tracking across global value chains.

What does "ledger-based" actually mean? In theory, it's like creating a universal barcode system for carbon where every product gets a verified emissions ID that follows it through the supply chain. Instead of "we estimate our Scope 3 to be approximately..." you'd have "This specific batch of steel has 1.85 kgCO₂e per kilogram, verified on December 15, 2025, at Mill XYZ."

Why this matters operationally: Customers like AWS are already requiring product-level carbon data, and manual calculations don't scale. When you're managing thousands of SKUs with complex supply chains, interoperable systems where emissions data flows automatically would solve a real problem.

The catch? Carbon Measures has faced criticism as some in the sustainability community are skeptical about whether another framework is what we need or whether existing standards (GHG Protocol, ISO 14067, Pathfinder) just need better implementation and enforcement.

That said, if you're in a sector with complex supply chains (chemicals, automotive, electronics, construction materials), it's worth monitoring how this develops. The application deadline is February 15th, but given the controversy, you might want to wait and see how the first phase plays out before committing resources.

Bottom line: The problem they're trying to solve is real. Whether this particular initiative is the solution remains to be seen.

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Climate Liability Cases Are Building

Two major legal developments may be rewriting the rules on corporate climate accountability, and they should be getting attention from risk management teams.

The BHP Dam Collapse Decision

On November 25, 2025, an English High Court found BHP liable under Brazilian law for the 2015 Mariana dam disaster. When BHP tried to appeal in January, the High Court refused permission on January 19th. BHP is now taking it to the Court of Appeal.

Why this matters: The court established that parent companies can be held directly liable under overseas environmental laws for subsidiary operations. Not "indirectly responsible through poor governance", but actually liable as polluters. This isn't theoretical anymore.

The Shell Climate Damages Claim

In December 2025/early January, 103 Filipino individuals sued Shell in English courts for damages from Typhoon Rai in 2021, claiming Shell's historical emissions materially contributed to climate change that intensified the storm.

Why this is unprecedented: This is the first English case attempting to link a specific severe weather event directly to a company's cumulative carbon emissions. Previous climate litigation focused on disclosure failures or inadequate reduction targets. This is about attribution and damages.

The business implication one shouldn’t ignore: These cases establish two precedents that should concern any company with global operations:

1. Parent company liability for overseas environmental damage, even when local subsidiaries operated the facilities
2. Attribution of specific weather events to corporate emissions histories, opening the door to climate damage claims

If you have manufacturing operations in climate-vulnerable regions or suppliers in emerging markets, this fundamentally changes your risk profile. It's no longer just about disclosure and targets, it's about potential financial liability for historical emissions.

It's a present-day legal and financial risk that belongs in your enterprise risk management framework now.

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EU Decides to Actually Make Things Easier (Sort Of)

In a shocking turn of events that no one saw coming, the EU decided to make sustainability reporting less painful. The Omnibus reforms to CSRD and CSDDD were finalized in December, and they're actually... reasonable?

The good news for your sanity:

• CSRD now only applies to companies with €450M+ revenue and 1,000+ employees (down from ~50,000 to ~5,000 in-scope companies)
• Simplified ESRS removes 60% of original data points (mostly the soul-crushing qualitative ones)
• Only limited assurance required—reasonable assurance has been shown the door
• Companies can't demand sustainability data from suppliers with fewer than 1,000 employees

Translation: Your 2028 reporting (on FY2027 data) just got significantly more focused.

But here's the nuance everyone's missing: The simplification is real, but don't mistake "fewer data points" for "less important." With 95% of companies now out of scope, the 5% still reporting will face intense scrutiny from investors and customers as the de facto sustainability leaders.

Compliance is table stakes. The competitive advantage comes from using carbon data to make better sourcing decisions, win climate-conscious customers, and avoid the "carbon squeeze" created by CBAM and customer requirements.

The simplified standards should be adopted by mid-2026, giving you actual time to prepare instead of the usual last-minute regulatory panic. Member states must transpose by Q1 2027, with simplified standards mandatory for 2028 reporting.

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Your January Action Plan (Because 2026 Only Has 11 Months Left)

Forget generic advice. Here's what actually needs attention based on these developments, prioritized by urgency:

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THIS WEEK: CBAM Exposure Assessment

• Pull Q4 2025 and Q1 2026 import data for iron, steel, aluminum, cement, fertilizers, and electricity into the EU
• Calculate potential CBAM certificate costs using actual embedded emissions (or default values if you don't have supplier data yet)
• First certificate surrender is February 2027, but Q1 2026 imports are already on the clock
• Why now: If your current suppliers can't provide verified emissions data, you need time to find alternatives before costs spike

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BEFORE FEBRUARY 15: ICC Framework Evaluation

• Assess whether participating in the ICC/Carbon Measures framework pilot makes strategic sense for your sector
• If you're in chemicals, automotive, electronics, or construction materials with complex supply chains, the answer is probably yes
• Application deadline is February 15, 2026. After that, you're waiting for the next cohort
• Why now: Early participants help shape the standard and gain first-mover advantage in product-level carbon tracking

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Q1 2026: Legal Risk Audit

• Review climate liability exposure for overseas operations post-BHP decision
• Identify facilities in climate-vulnerable regions where weather events could trigger attribution claims
• Brief your general counsel on the Shell case implications for historical emissions
• Why now: Insurance policies and risk mitigation strategies need to be updated before the next extreme weather season

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Q1 2026: Customer Requirements Mapping

• Survey your top 20 customers on carbon data requirements—the Rio Tinto/AWS deal signals this is accelerating
• Identify which products need product-level carbon footprints (not just corporate inventories)
• Assess current capability to provide verified, product-specific emissions data
• Why now: Losing a major customer because you can't provide carbon data they require is an avoidable revenue risk

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Q1 2026: Simplified CSRD Strategy

• If you're still in scope under new thresholds, map the 40% of data points that remain—these are now the critical ones
• If you're out of scope, decide whether voluntary alignment makes commercial sense (hint: probably yes if your customers are in scope)
• Why now: FY2027 reporting starts January 1, 2027. That's less than 12 months away

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The Bottom Line

January 2026 marks an inflection point: carbon accounting stopped being the sustainability team's problem and became everyone's reality. Between CBAM's financial teeth, customer requirements for low-carbon products, global standardization efforts, and expanding legal liability, ignoring carbon management isn't just bad for the planet anymore. It's bad for business.

The "carbon squeeze" is real: regulatory pressure from one side, customer requirements from the other, and legal liability underneath. Companies without verified low-carbon alternatives and product-level emissions tracking will find themselves priced out, both literally and competitively.

The good news? You're not alone in this. The entire sustainability ecosystem is evolving rapidly, and the tools to manage these challenges are getting better every day.

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