While the U.S. may be softening federal ESG and sustainability mandates, global capital is moving in the opposite direction. If you’re securing financing and investment from European institutions — or any ESG-conscious investor — sustainability is still very much on the table. In fact, 2024 saw $26.5 billion in foreign investment in U.S. commercial real estate. Investor giants like Norges Bank Investment Management — manager of the world’s largest sovereign wealth fund and recent investor in a $3.2 billion, 48-building U.S. logistics portfolio — expect portfolio companies to reach net zero greenhouse gas emissions by 2050, in line with the Paris Agreement.
These partners require companies to set science-based interim emission reduction targets and implement credible transition plans that achieve measurable environmental performance, regardless of domestic policy shifts. That means ESG considerations aren’t optional; they’re baked into the terms of your funding. For U.S. commercial real estate owners and operators, aligning with these expectations isn’t just about compliance — it’s about staying competitive and capital-ready in a global marketplace.
For foreign investors — especially those from the EU — responsible solar adoption means more than reducing carbon. ESG reporting frameworks like CSRD and SFDR require companies to demonstrate not only environmental outcomes but also ethical sourcing and labor practices throughout the supply chain. That means where your solar panels come from — and how they were made — can impact your access to capital and compliance status.
We asked our channel partner South Pole — a global leader in climate solutions and sustainability advisory — to outline the key ESG regulations that matter most to foreign investors and to discuss how they differ from U.S. standards. Special thanks to Arturo Mora, Renewable Energy Managing Consultant at South Pole, for providing this overview and helping U.S. commercial real estate stakeholders better understand the ESG expectations that often come with global capital.
The solar photovoltaic (PV) industry plays a crucial role in the transition to renewable energy. However, as the industry grows, concerns about environmental, social, and governance (ESG) issues across its supply chain are coming into sharper focus. Regulatory frameworks play a key role in shaping how companies source, produce, and deploy solar PV technologies — especially for businesses operating across multiple regions.
While both the United States (U.S.) and European Union (EU) recognize the importance of ESG in the solar PV sector, their approaches differ significantly. The EU has established a strong regulatory framework, requiring companies to meet high sustainability and ethical standards. In contrast, the U.S. takes a more market-driven approach, with rules varying by state and sector. These differences affect how companies manage compliance and ESG risks across the global supply chain.
In Europe, ESG requirements are more stringent and comprehensive. Key European regulations include:
These rules aim to create a transparent and accountable business environment with a strong emphasis on sustainability and responsible sourcing.
In the U.S., ESG regulation is more fragmented and generally voluntary. Compliance is often guided by industry standards rather than binding regulations. Still, there are important developments:
Other states, including New York, Washington, and Texas, are exploring ESG policies across various sectors, such as fashion and manufacturing. At the federal level, ESG enforcement relies more on Securities and Exchange Commission (SEC) investigations, shareholder pressure, and litigation rather than mandatory disclosures or penalties.
When it comes to solar PV solutions, one of the most crucial and pressing ESG concerns is the risk of forced labor. Approximately 40% of the world’s polysilicon—the raw material used in PV panels—comes from China’s Xinjian region, which has been linked to human rights violations.
To reduce the risk of sourcing PV panels linked to forced labor, several initiatives have been launched in both Europe and the U.S.
European Response
In April 2024, the European Parliament approved a new regulation banning products made with forced labor from entering the EU market. Once this is implemented into national law, noncompliant companies could face penalties. To support compliance, companies operating in Europe have already started adopting mechanisms for ethical solar PV procurement, such as:
The SSI is aligned with EU regulations like CSRD and the upcoming Corporate Sustainability Due Diligence Directive (CSDDD). It has been piloted in China, Germany, and Norway and now includes 48 corporate members — 12 of which are PV manufacturers.
United States Response
The U.S. has also taken strong action through the Uyghur Forced Labor Prevention Act (UFLPA), banning imports linked to forced labor in Xinjiang. Companies must ensure their supply chains do not include materials from entities on the UFLPA entity list.
As the solar PV industry grows, ESG compliance is becoming a critical factor in global supply chains. The EU leads with strict, mandatory regulations, while the U.S. takes a more decentralized, market-based path. Emerging technologies like digital traceability and blockchain could further improve supply chain transparency, helping companies verify ethical sourcing and meet environmental compliance more effectively. Businesses that take proactive steps today — by aligning with global ESG standards — will be better prepared for future regulatory changes and investor scrutiny.
From responsibly sourcing panels to delivering verifiable carbon savings, solar adoption helps real estate owners meet investor expectations and prepare for evolving regulations.
For commercial real estate owners and operators, investing in solar — whether through direct ownership, leasing, or community solar — offers a dual benefit: reducing emissions and aligning with global ESG standards. The chart below outlines key performance indicators prioritized by EU regulations and explains how solar directly supports each one with actionable data and measurable outcomes.
At SolarKal, we help commercial real estate leaders evaluate every solar pathway to ensure it supports both their sustainability goals and financial returns. We also guide clients in tracking key performance indicators — such as avoided emissions, system uptime, and energy cost savings — so they can report measurable ESG outcomes with confidence.
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