Horizon – News and Trends in Sustainability Law

Deadline alert

US: California. The California Air Resources Board (CARB) has postponed the deadline for reporting Scope 1 and Scope 2 disclosures under SB 253, the state’s greenhouse gas (GHG) emissions-disclosure law, from August 10 to November 10.

US: California. Under SB 54, producers of plastic covered material must submit individual source-reduction (ISR) plans to show how they plan to reduce, by both weight and number of components, the amount of plastic covered material they introduce into the state. The ISR plans will also explain prior source-reduction efforts so that producers can obtain credit against future “maluses.” ISR plans are due by August 1 to the Circular Action Alliance (CAA).

European Union. The EU Packaging and Packaging Waste Regulation (PPWR) enters into force on August 12. Key compliance milestones and targets will phase in through 2040. See our alert for more information about the PPWR.

Disclosures and voluntary reporting

CARB previews next-phase SB 253 rules, pushes back reporting deadline. On July 21, CARB held a public workshop previewing regulatory concepts for its forthcoming rulemaking related to SB 253. CARB confirmed that it is deferring the 2026 Scope 1 and Scope 2 reporting deadline from August 10 to November 10, 2026 after withdrawing its Final Package from the Office of Administrative Law to make limited clarifying changes. Additional reporting guidance is expected by September 1. For 2027, staff narrowed proposed Scope 3 reporting to five mandatory categories – purchased goods and services, fuel- and energy-related activities, waste generated during operations, business travel, and employee commuting – with the remaining ten categories to be submitted voluntarily. CARB is also proposing a unified November 10 deadline covering Scopes 1, 2, and 3. The workshop identified specific third-party assurance standards (including AA1000AS v3, AICPA AT-C 210, ISAE 3410/3000, ISSA 5000, and ISO 14064-3:2019) that will satisfy the requirement to provide limited assurance of Scope 1 and 2 emissions beginning in 2027. The proposal also includes new requirements related to data quality, biogenic emissions, and recalculation. Finally, CARB proposes to narrow the insurance company exemption starting in 2027 and expects to revise its economic analysis of the program’s compliance costs in response to stakeholder feedback. CARB will hold six sector-specific listening sessions from August 5 through September 9 before finalizing its 2027 proposal, which remains subject to a future 45-day public comment period.

GHG Protocol introduces Land Sector and Removals Guidance, addressing emissions in agricultural land use. Greenhouse Gas Protocol has published its Land Sector and Removals (LSR) Guidance, created to help companies account for their GHG emissions and CO₂ removals arising from agricultural land use. The new guidance supports implementation by businesses of the accounting and reporting requirements in GHG Protocol’s LSR Standard, setting out equations, tips on calculations, and case studies that highlight how individual corporations have applied the LSR Standard in practice. In further support of the standard, GHG Protocol also launched two supplemental tools: a reporting requirements checklist and a sample reporting template. The LSR Standard and Guidance will go into effect on January 1, 2027. In addition, GHG Protocol has opened a request for information (RFI) on forest carbon accounting, asking for “proposals on how to best reach a robust and practicable outcome in light of the broad range of perspectives on this topic.” The RFI is open through February 1, 2027.

Public comment period is open on Canada’s Sustainable Finance Taxonomy draft report. On July 9, Business Future Pathways Canada and the Canadian Climate Institute released a methodology report draft intended to serve as the foundation for Canada’s coming sustainable finance taxonomy. Sustainable finance taxonomies are standardized classification systems that define economic activities that are considered environmentally or socially sustainable, translating policy targets into actionable, quantifiable frameworks. The ultimate goal of Canada’s taxonomy is to drive investment into projects and companies that align with the country’s goal of net zero by 2050.

In developing the sustainable investment guidelines, the draft identifies six priority sectors in the Canadian economy where decarbonization would deliver the most significant results: electricity, buildings, transportation, mining, manufacturing, and agriculture and forestry. The methodology sets out three categories:

• Green, covering such zero- to near-zero-emission climate solutions as electric vehicle manufacturing and renewable energy generation
  
  
• Transition, covering emissions-intensive activities that could potentially realize deep emissions reductions and achieve the scale of decarbonization necessary to align with the green definition by mid-century
  
  
• Abatement, covering activities that would drive immediate, significant emissions cuts by high-emitting sectors expected to experience a decline in demand on the way to net zero – examples are oil and gas producers

Typically, sustainable taxonomies exclude fossil fuel production activities because, as the report states, they are “misaligned with the long-term objectives of the Paris Agreement.” Acknowledging this, the draft text states that including the abatement category “is novel relative to international taxonomies” but that including the new category “will help enable select, tightly ring-fenced emissions-reduction investments made in the short-term.” The proposed taxonomy thus includes what it calls “guardrails” added to “ensure that investments focus squarely on reducing emissions in the short to medium term and do not lead to carbon lock-in.” Dr. Marlene Puffer, Chair of the Canadian Taxonomy and Transition Planning Council, reportedly stated that it is an “open question” whether the abatement category will survive in the final taxonomy.

Comments on the draft report are open through August 13. Feedback is especially requested in three areas: the draft’s proposed categories and definitions, its recommendations on Do No Significant Harm (DNSH) and Minimum Social Safeguards (MSS), and the technical screening criteria used to determine whether a specific eligible activity meets the threshold for inclusion. Find the draft report here.

EU Taxonomy update.

• The European Securities and Markets Authority (ESMA) has launched a consultation on proposals to simplify the disclosure framework of the EU Taxonomy for Sustainable Activities, focusing on reducing reporting burdens while maintaining the usefulness of sustainability disclosures for investors. The review is particularly significant for asset managers and other financial market participants because Taxonomy disclosures are increasingly used to support sustainable investment products and investor decision-making. The consultation provides an early indication of how EU regulators are approaching the ongoing review of the Taxonomy disclosure framework. A key focus is whether existing key performance indicators (KPIs) – particularly those regarding operational expenditure (OpEx) – continue to deliver meaningful information for investors relative to the cost of producing them. ESMA is also seeking feedback on potential simplifications to group reporting and disclosure structures, with a view to improving usability and comparability while reducing reporting burdens. The consultation is open until August 12, with ESMA expected to submit its final technical advice to the European Commission by the end of October.

European Commission adopts revised European Sustainability Reporting Standards and voluntary sustainability reporting standard for smaller companies. The European Commission has adopted revised European Sustainability Reporting Standards (ESRS) and a voluntary sustainability reporting standard for smaller companies. The revised standards reduce the number of mandatory datapoints by more than 60 percent and the total number of data points by more than 70 percent, with the Commission estimating that these changes could reduce reporting costs for each company by more than 30 percent. The package also introduces a voluntary reporting framework for smaller companies outside the scope of the Corporate Sustainability Reporting Directive (CSRD) and reinforces the value chain reporting cap, preventing CSRD-reporting companies from requesting more sustainability information from value chain partners than is covered by the voluntary standard. The Commission has removed data points considered less relevant for general-purpose sustainability reporting, increased the emphasis on quantitative information, and provided clearer guidance on the application of materiality. Together, these changes are intended to focus reporting on information most relevant to investors and other stakeholders while reducing complexity for reporting companies. The revised standards also strengthen the distinction between mandatory and voluntary disclosures and seek to improve interoperability with international sustainability reporting frameworks. Next, the revised ESRS faces a two-month period of scrutiny by the European Parliament and Council. Unless that period is extended, the standards will enter into application.

EFRAG releases proposed sustainability reporting standard for non-EU companies. On July 23, the European Financial Reporting Advisory Group (EFRAG) published an exposure draft of the ESRS for certain non-EU undertakings (ESRS-40a), setting out proposed sustainability reporting requirements for non-EU companies within the scope of the CSRD. The draft has been released for public consultation. Following recent amendments under the EU's Omnibus simplification package, the 40a reporting requirements now apply to non-EU groups that generate more than EUR450 million of net turnover in the EU in each of the previous two consecutive financial years and have an EU subsidiary or branch generating more than EUR200 million in turnover in the preceding financial year. Unlike the ESRS, which is applicable to EU companies, the proposed ESRS-40a is based on impact materiality only, focusing on a company's impacts on people and the environment, rather than requiring reporting on sustainability-related risks and opportunities. The draft also proposes a mixed reporting approach which allows reporters to limit the disclosure of impacts (other than those related to climate) to EU-related impacts only when certain conditions are met, rather than mandatory disclosure at a global level. The consultation is open until October 31, 2026. EFRAG is expected to provide technical advice to the European Commission in 2027, with reporting by in-scope non-EU groups currently scheduled to commence in 2029 based on data from the 2028 financial year.

Singapore proposes ISSB-aligned sustainability reporting standards. On July 27, Singapore's Accounting and Corporate Regulatory Authority (ACRA) launched a consultation on proposed Singapore Sustainability Disclosure Standards aligned with the International Sustainability Standards Board (ISSB) framework. The proposed standards are intended to support Singapore's climate-related disclosure roadmap for listed companies and large non-listed companies. The proposed standards, Singapore Financial Reporting Standards (SFRS) S1 and SFRS S2, are based on International Sustainability Standards Board (ISSB) IFRS S1 and IFRS S2, adapted to Singapore's "climate-first" approach. Under the proposal, climate-related disclosures aligned with SFRS S2 would be mandatory, while broader sustainability disclosures under SFRS S1 would remain voluntary. Singapore has not yet established a timetable for mandating non-climate sustainability reporting requirements. The proposals would further align Singapore's reporting framework with international disclosure standards while providing companies with a phased pathway towards enhanced climate-related reporting obligations. The consultation closes on October 25, 2026. Following that, the standards are expected to be finalized and incorporated into Singapore's phased implementation of ISSB-aligned climate reporting requirements.

XRB launches consultations on NZ IFRS S2 and amendments to NZ CS1 to align New Zealand's climate reporting framework with international standards. The External Reporting Board (XRB), New Zealand's independent accounting and climate reporting standard setter, has opened a consultation on a draft climate reporting roadmap that proposes a new climate reporting standard, NZ IFRS S2, based on the globally recognized IFRS S2 framework. The proposed standard aims to align New Zealand's existing climate-reporting requirements with international standards, support harmonization with Australia's regime, and maintain relevance to New Zealand's legislative and regulatory environment. Consultation on the draft roadmap closes on September 30. The XRB has also released a consultation on proposed amendments to NZ CS 1, Climate-related Disclosures, New Zealand's domestic climate reporting standard. The amendments would align New Zealand's Scope 3 GHG emissions disclosure requirements more closely with international standards, allow climate reporting entities to exclude certain investment-related emissions from Scope 3 disclosures, and incorporate existing XRB guidance on emissions exclusions into the standard as mandatory application material. The consultation closes on July 29.

New Zealand: FMA raises the bar on climate reporting. New Zealand’s Financial Markets Authority (FMA) has published its third climate-related disclosures (CRD) insights report, setting out observations from its review of 62 climate statements prepared during the New Zealand CRD regime's second reporting period. As the regime matures, FMA’s focus has shifted from baseline compliance to the quality and usefulness of disclosures. There is increased scrutiny on whether climate statements operate as integrated disclosures that clearly link climate-related risks and opportunities to strategy, expenditure, and financial performance. Find out more.

Life and health insurers removed from New Zealand's climate reporting regime. The New Zealand Government has confirmed that health and life insurers will be removed from the country’s mandatory climate-related disclosures regime and will no longer be required to prepare climate statements. The decision reflects the government's view that health and life insurers do not face the same direct physical climate risks as general insurers. It will remove nine health and life insurers from the regime. Combined with earlier reforms that removed 88 entities, the number of climate reporting entities will decrease from 164 to 67. Pending those legislative changes, financial regulator FMA confirmed a "no action" approach for affected insurers with balance dates from March 31, 2026 onwards.

AASB publishes guidance on climate-related transition disclosures. The Australian Accounting Standards Board (AASB) has published educational material – intended as guidance only – on disclosing information about an entity’s climate-related transition under AASB S2 Climate-related Disclosures. The guidance provides practical support on applying existing disclosure requirements in AASB S2, particularly those relating to an entity’s climate-related transition, transition planning, and transition plans. It explains how entities can disclose information about climate-related risks and opportunities, strategic goals, targets, governance arrangements, and progress against transition-related objectives. The guidance is available immediately and may be used by entities preparing climate-related disclosures under AASB S2.

Global sustainability reporting is increasingly converging: report. A study by three major accountancy organizations concludes that global sustainability reporting is “transitioning from a fragmented landscape toward one that is increasingly structured, standardized, and integrated.” The State of Play: Sustainability Disclosure and Assurance (Six-Year Trends and Analysis, 2019-2024) gathered data from the 100 largest companies in each of six key jurisdictions (among them the United States), as well as the 50 largest companies in 16 other jurisdictions – in all, 1,400 global companies. Among its findings: 97 percent of these companies reported that they disclosed some sustainability information in 2024, and 75 percent also obtained assurance on their reporting, primarily from auditors. In the US, 95 percent of the top 100 companies reported that they had disclosed sustainability data during 2024, a decline from 100 percent in 2023. About 20 percent of responding companies worldwide reported that they already use, or are planning to use, the ESRS, a sign that the EU’s reporting rules are affecting reporting beyond the bloc. Of note: While the reporting landscape is increasingly moving toward a more standard framework, this convergence, the report states, “may continue to be challenged by shifting geopolitical and regulatory sentiment within some of the world’s largest economies.” Research for The State of Play was conducted jointly by the American Institute of CPAs (AICPA), the Chartered Institute of Management Accountants (CIMA), and the International Federation of Accountants (IFAC). See the report here.

Extended producer responsibility

California SB 54 update.

• Agricultural groups call for repeal of SB 54. A coalition of California agricultural industry groups has written to Governor Gavin Newsom and legislative leaders, calling on them to repeal and replace SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act. In their July 6 letter about the extended producer responsibility (EPR) law, the groups stated that SB 54 is “unworkable as written” and will “substantially” raise costs for food producers, farmers, and consumers. Some sources are also reporting that the California State Board of Food and Agriculture has joined the criticism of SB 54’s costs and timelines.
  
  
• Dairy association calls for exemption on dairy plastics. In addition, the International Dairy Foods Association (IDFA) has called on California’s Packaging Producer Responsibility Advisory Board to exempt dairy packaging plastics from the recycling targets set out in SB 54. SB 54 offers a number of potential exemption pathways, among them one for agricultural and food packaging in instances where complying with the law would create a conflict with federal regulations. The implementation plan proposed by CAA, the producer responsibility organization that administers SB 54, would provide temporary exemptions for certain plastic materials commonly used in dairy product packaging. Calling the timeline set out in SB 54 “out of step with current market and recycling system realities,” IDFA Vice President of Regulatory Affairs and Counsel Danielle Quist recently stated, “The proposed temporary exemptions are necessary to give producers and CAA additional time to meet SB 54’s requirements in a more practical and achievable way while continuing to protect safe, nutritious and highly perishable dairy foods.” Businesses using food and agricultural packaging may apply for a categorical exclusion from SB 54 by submitting a Categorically Excluded Materials Notice.
  
  
• Navigating antitrust compliance under California’s SB 54: What producers, suppliers, and industry conveners need to know. Despite ongoing challenges, implementation of California SB 54 is moving forward. Given the collective nature of its source-reduction requirements, that reality comes with a set of antitrust compliance implications that participants in the packaging value chain are encouraged to understand. Our alert tells you more.

Maine issues RFP for stewardship organization. Maine’s Department of Environmental Protection (DEP) has begun its search for a stewardship organization to manage Title 38 S 2145, the state’s EPR law, with a recently issued Request for Proposals (RFP). (As we noted in May, Maine uses the term “stewardship organization” rather than “producer responsibility organization.”) Although Maine was the first US state to enact an EPR law in 2021, implementation of the program has taken longer than initially anticipated. The RFP was issued several months behind schedule, and municipalities recently learned they would not be reimbursed for costs incurred under the program until at least the end of 2027. In a recent survey conducted by DEP, only 16 percent of Maine’s municipalities said they intend to participate in the EPR program. The stewardship organization would be required to operate the program for at least ten years. Bids on the RFP are due by August 3.

Oregon EPR updates: a bench trial, a new lawsuit, and ongoing implementation. The five-day bench trial in National Association of Wholesaler-Distributors v. Feldon concluded July 17. In this case, the National Association of Wholesaler-Distributors (NAW) and other industry groups are seeking to halt implementation of Oregon’s Plastic Pollution and Recycling Modernization Act (RMA) and invalidate its implementing regulations. As we reported early this year, in February, the US District Court for the District of Oregon granted a preliminary injunction in the case preventing the Oregon Department of Environmental Quality (DEQ) from enforcing the RMA against the plaintiffs. During the trial, the plaintiffs argued that the RMA is unconstitutional, violating the Due Process Clause and the Commerce Clause. Next, both NAW and Oregon must submit post-trial briefs by July 31. The court asked both parties to answer a series of focused questions in their briefs, having previously indicated that it will issue a decision by August 31.

Meanwhile, Lollicup USA, a manufacturer of disposable food-service supplies, has launched a separate, similar lawsuit against the RMA, also brought against DEQ Director Leah Feldon, in the US District Court for the District of Oregon – this one a putative class action. The RMA, Lollicup’s complaint states, “conscripts a national supply chain into a state-specific regulatory regime that is opaque, retrospective, unilaterally revisable, judicially unreviewable, and administered by a private actor whose founding members and board are the very industry participants the Act empowers them to regulate.” Pointing to the NAW litigation, the case seeks to represent companies that were not included in the preliminary injunction. On July 16, the parties to the litigation entered into an agreement under which DEQ will not issue pre-enforcement notices – the initial step before formal enforcement proceedings begin – against Lollicup USA or any members of the putative class until at least August 31.

Finally, as these lawsuits move forward, the CAA has released its first annual report on Oregon’s EPR program. The report covers the program’s first six months in 2025, stating that 2025 was “a build year,” laying the foundation for full implementation in 2027. During that time, producer-funded recycling infrastructure had already begun rolling out statewide, “including expanded access to recycling services, new infrastructure and funding to support local governments and service providers.” The report states, “These learnings are helping the team to optimize funding and service delivery, but equally important, these learnings will also be used in emerging states to improve future program roll outs.”

EU Council formally adopts circularity requirements for vehicle design and management of end-of-life vehicles. The Council of the EU has formally adopted the regulation on circularity requirements for vehicle design and the management of end-of-life vehicles, marking the final step in the legislative process. The formal adoption finalizes a regulatory framework introducing circularity requirements across the vehicle lifecycle, from design and production to end-of-life treatment. A key feature of the regulation is the introduction of minimum recycled-plastic content requirements for new vehicles, with at least 15 percent recycled plastic required after six years, rising to 25 percent within ten years, and a minimum of 2 percent of that recycled plastic sourced from end-of-life vehicles. The regulation also strengthens EPR goals by making manufacturers financially and organizationally responsible for the collection and treatment of vehicles at the end of their life. In addition, enhanced traceability requirements and export restrictions address illegally dismantled or exported vehicles, improve enforcement, and retain valuable materials within the EU for reuse and recycling. The regulation will start applying two years after its entry into force. Next, based on a feasibility study to be finalized one year after the regulation enters into force, the Commission must introduce future targets for other materials such as recycled steel, aluminum, magnesium, and critical raw materials.

European Commission adds exemptions to portable battery removability rules. The European Commission has adopted a delegated act introducing additional exemptions from the EU Batteries Regulation's requirements on the removability and replaceability of portable batteries incorporated in products. As a general rule, portable batteries in products placed on the EU market must be removable and replaceable by end users during the lifetime of the product. The new delegated act adds six further product categories for which batteries only need to be removable and replaceable by independent professionals rather than by consumers. The additional derogations cover, among others, wearable devices such as smartwatches and fitness trackers, electric toys, and products within the scope of the ATEX Directive, which concerns equipment intended for use in potentially explosive atmospheres. The Commission indicates that the exemptions are intended to address cases where end-user removability may raise technical, safety, or product-integrity concerns, while still preserving professional access for repair, replacement, and end-of-life battery removal.

For manufacturers and importers, the development is relevant when assessing product design and compliance documentation under Article 11 of the EU Batteries Regulation. Businesses relying on a derogation should ensure that the relevant product category is clearly mapped, that technical justifications are documented, and that independent professionals can remove and replace the battery in practice. The Commission is also updating its guidance on battery removability and replaceability to support manufacturers in applying the new derogations.

Next, the delegated act will be transmitted to the European Parliament and the Council for scrutiny. If neither institution objects, the act will enter into force 20 days after publication in the Official Journal of the European Union.

Find out more about EPR. Visit DLA Piper’s Extended Producer Responsibility Hub to learn more about the firm’s work assisting businesses with their EPR obligations up and down the supply chain.

Sustainability: Regulatory

Proposed rule would reportedly restrict ESG factors in ERISA retirement investment decisions. The US Department of Labor’s Employee Benefits Security Administration (EBSA) is reportedly close to issuing proposed investing rules that would restrict plan fiduciaries from prioritizing environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) factors when selecting investments and exercising shareholder rights in retirement plans covered by the Employee Retirement Income Security Act (ERISA). The proposed rule was drafted pursuant to President Donald Trump’s February 2025 Executive Order (EO), “Ensuring Lawful Governance and Implementing the President's ‘Department of Government Efficiency’ Deregulatory Initiative,” which directed federal agencies to review regulations that exceed statutory authority or address matters of social, political, or economic significance without clear congressional authorization. In 2022, EBSA released a final rule, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, that allowed plan fiduciaries to consider climate change and other ESG factors in selecting retirement investments. The rule, sometimes nicknamed the ESG Rule, did not require plan fiduciaries to consider ESG factors; instead, because ERISA still prioritizes financial metrics, ESG factors could only be used in risk-return analyses or as tiebreakers when all other factors were seen to be equal. As we reported last year, the District Court for the Northern District of Texas upheld the rule in May 2025, emphasizing that nothing in it violates ERISA standards. On July 21, Bloomberg reported that the White House Office of Information and Regulatory Affairs (OIRA) has been reviewing the proposed new rule since June 30, “an indication it’s nearing public release.” ERISA governs approximately 670,000 retirement plans covering roughly 90 million workers and retirees.

New York State: Pause on data centers. The New York State Legislature has passed the first-in-the-nation Responsible Data Center Development Act (S10642/A11560), imposing a one-year moratorium on state permits for new large data centers with peak demand of 20 megawatts (MW) or more. The act reflects a broader national movement in which communities and state governments are reassessing data center development in light of concerns over energy costs, water use, grid strain, and community impacts. See our alert. Furthermore, this month New York Governor Kathy Hochul issued EO No. 62, directing the Department of Environmental Conservation to pause permit applications for the construction or expansion of certain data center projects. This alert summarizes the Order and sets out key takeaways for parties whose projects may be affected.

UK consults on strengthening regulation of in-use vehicle emissions. The UK Department for Transport has launched a consultation on proposals to strengthen legislation governing emissions from vehicles in use on Great Britain’s roads. The consultation focuses on enhancing regulatory oversight of vehicle emissions throughout a vehicle’s operational life, complementing existing standards that apply when vehicles are first placed on the market. By strengthening enforcement powers and compliance requirements, the proposals seek to ensure that emissions-control systems continue to function as intended once vehicles are in use. If implemented, the changes could increase scrutiny of vehicle modifications, maintenance practices, and emissions-control technologies, with implications for vehicle owners, fleet operators, and the aftermarket sector. Feedback from the consultation, which closes on September 6, will inform the government's decision on whether and how to strengthen the legal framework governing in-use vehicle emissions.

EU ban on destruction of unsold clothing and footwear enters into application. From July 19, large companies across the EU are prohibited from destroying unsold clothes, clothing accessories, and footwear. Medium-sized companies will be subject to the same rules from 2030. The measure was introduced under the Ecodesign for Sustainable Products Regulation (ESPR). Under the new rules, businesses must prioritize keeping products in use through resale, donation, or preparation for reuse, including repair, refurbishment, or remanufacturing. Destruction will only be permitted in limited circumstances, including where products are unsafe, damaged, or counterfeit; infringe intellectual property rights; or have been rejected by donation schemes. Businesses using these exemptions must retain supporting evidence and publish annual information on discarded products.

England reforms Biodiversity Net Gain requirements for smaller developments. On July 13, the UK government adopted the Biodiversity Gain (Town and Country Planning) (Amendments and Transitional Provisions) (England) Regulations 2026, introducing changes to the Biodiversity Net Gain (BNG) regime for developments requiring planning permission in England. The amendments include new exemptions for certain small and temporary developments and changes to the biodiversity gain hierarchy for minor developments. A key change is the introduction of a new exemption for developments of 0.2 hectares or less, meaning the smallest developments will no longer be subject to mandatory BNG requirements unless onsite priority habitat is adversely affected. The regulations also introduce an exemption for certain temporary developments where the development and any works to reinstate the land will be completed within five years. Previously, developers were generally expected to prioritize onsite habitat enhancement before considering offsite measures. Under the revised approach, eligible minor developments will have greater flexibility to use offsite biodiversity gains. The regulations also remove the existing exemption for self and custom-build developments, meaning those projects will generally be subject to BNG requirements unless they qualify for another exemption, such as the new 0.2-hectare threshold. The regulations will come into force on August 6.

UK adopts administrative framework for Carbon Border Adjustment Mechanism. His Majesty’s Revenue & Customs (HMRC) has adopted the Carbon Border Adjustment Mechanism (Administrative Provisions) Regulations 2026, establishing the administrative framework for the operation of the UK’s Carbon Border Adjustment Mechanism (CBAM), which are due to come into force from January 1, 2027. The regulations, adopted on July 13, set out requirements relating to registration, returns, recordkeeping, reimbursement arrangements, and the calculation of the value and weight of CBAM goods. They also establish requirements for registration with HMRC, the submission of CBAM returns, recordkeeping obligations, and procedures for determining the value and weight of CBAM goods.

EU updates rules on waste recovery shipments to Switzerland. The European Commission has adopted a targeted and limited amendment to the EU Waste Shipment Regulation allowing the continued export of mixed municipal waste from the EU to Switzerland for recovery purposes, including recycling and energy recovery. The amendment is intended to preserve long standing waste management arrangements between the EU and Switzerland following the introduction of new EU waste shipment rules, which starting in May prohibited the export of mixed municipal waste for recovery to non EEA countries, including Switzerland. According to the Commission, around 200,000 tonnes of mixed municipal waste are sent from border regions in Austria, France, Germany, and Italy to Switzerland each year for recovery. The change applies only to exports for recovery purposes, such as recycling and energy recovery, and does not alter the stricter rules that apply to waste shipments for disposal. The amendment enters into force on July 30, which is 20 days after publication in the Official Journal of the European Union.

China issues 15th Five-Year Carbon Peaking Action Plan and Circular Economy Development Plan. On July 14, China’s State Council published its Carbon Peaking Action Plan for the 15th Five-Year Plan period. The plan sets national targets for 2030, including a 17-percent reduction in CO2 emissions per unit of gross domestic product compared to 2025 levels and a 25-percent share of non-fossil energy in total energy consumption. It also calls for combined wind and solar power capacity to exceed 2.8 billion kilowatts, faster development of grid flexibility and energy storage, tighter controls on high-energy-consuming and high-emission projects, and energy-saving and carbon-reduction upgrades in traditional industries. During the planning period, China aims to establish around 100 national-level zero-carbon industrial parks and 500 zero-carbon factories. The plan further supports direct green power supply, carbon management services, and coordinated green transformation across industrial and supply chains. See the summarized action plan here.

Also in furtherance of the 15th Five-Year Plan period, China’s National Development and Reform Commission has released the Circular Economy Development Plan. The plan targets a roughly 16-percent increase in major resource productivity by 2030 compared with 2025, annual comprehensive use of around 4.5 billion tonnes of bulk solid waste, annual recycling of 510 million tonnes of major renewable resources, and RMB8 trillion in output from the resource recycling industry. The plan touches upon the full chain of production, consumption, collection, and utilization; promotes the use of recycled materials; and aims to foster high-level remanufacturing.

Sustainability: Litigation

Court halts enforcement of CA SB 343, Truth in Recycling. On July 14, the US District Court for the Southern District of California issued a preliminary injunction halting enforcement of California SB 343, the Truth in Recycling Law. SB 343 sets out restrictions on when a product or packaging may be labeled as recyclable in California. For instance, the law restricts the use of the familiar chasing-arrows symbol to materials that are truly recyclable, and, to be regarded as recyclable under SB 343, a product must be accepted by programs serving jurisdictions that collectively make up at least 60 percent of California's population. SB 343 would have gone into effect on October 4. In its ruling, the court stated that the plaintiffs were likely to succeed on both their constitutional and vagueness theories. While enforcement of SB 343 has been paused, the law itself remains in effect as the case, California League of Food Producers, et al. v. Bonta, proceeds.

Washington State: Wrongful death climate lawsuit moves forward. The first-ever wrongful death climate lawsuit in the US has proceeded to the discovery phase after a Washington state court denied the defendants' motion to dismiss on July 8. The lawsuit, filed in May 2025, charges that major oil companies are responsible for the death of a woman on the hottest day in Seattle’s history. The case was brought by Misti Leon, daughter of Julie Leon, age 65, who was found unresponsive in her car on June 28, 2021 and died later that day despite medical intervention. In declining to dismiss, the King County Superior Court distinguished the case from the numerous other climate cases now moving through US courts, concluding that this matter "is about a single individual and an allegation that a single weather event contributed to her untimely passing. It is seeking damages for her death and nothing else. In terms of prospective relief, it is not asking for anything regarding future emissions." The court also pointed to Leon’s theory of liability, which is based on claims of deceptive marketing and failure to warn Washington consumers, stating, "The Plaintiff will be held to this stated theory going forward.” The court did allow two of the defendant companies to be removed from the case. See the court's order here.

Chicago climate accountability case will remain in state court. The Seventh Circuit Court of Appeals has rejected the defendants’ attempt to move a climate accountability lawsuit brought by the City of Chicago to the US District Court for the Northern District of Illinois. The litigation, originally filed in 2024, charges that the defendants, an array of major energy companies, violated Illinois and Chicago laws by engaging in a decades-long “successful climate deception campaign” that has exacerbated climate change and caused extensive damages to the city and its residents. In seeking to move the case, the defendants invoked the federal officer removal statute, arguing that their historical fossil fuel production of specialized fuels for use by the military allowed them to move the case into the federal court system. The panel rejected that line of thought, affirming an earlier remand obtained by Chicago in 2025. The case will return to Cook County Circuit Court.

New Zealand: Judicial review files to challenge the Climate Change Response (Tort Liability) Amendment Bill. The government of New Zealand has introduced the Climate Change Response (Tort Liability) Amendment Bill, which would amend the Climate Change Response Act 2002 to prevent New Zealand courts from imposing tort liability for climate change-related damage arising from GHG emissions. As we reported in May, the legislation would shut down the landmark Smith v. Fonterra litigation. Michael Smith, the plaintiff, has filed judicial review proceedings challenging the government's decision to remove tort liability. He alleges that the government consulted with the companies defending the underlying climate litigation, but not with him, and failed to adequately consider how climate-related harm would be addressed if existing causes of action were removed. Smith and several NGOs have also raised the issue with the UN Special Rapporteur on Climate Change. In response to these developments, the Labour Party has announced that if it is elected in the November 2026 general election, it intends to repeal the legislation.

Greenwashing

Greenwashing litigation trends we are watching. In recent months, we have monitored greenwashing lawsuits that address companies’ claims that their products are recyclable. One example is Tuennerman v. Flowers Foods, a putative class action in the US District Court for the District of Arizona. In this case, the plaintiffs state that the company markets its low-density polyethylene #4 plastic film bread and bakery bags as recyclable, but that “the packaging is not recyclable in real-world conditions through ordinary curbside or municipal recycling systems” and, when sent to a typical municipal recycling facility, the plastic “interferes with the recycling process, damages sorting equipment, and often causes otherwise recyclable materials to be diverted to landfills or incinerators.” The plaintiffs are alleging violations of Arizona and California consumer protection, unfair competition, and false advertising statutes and are seeking, among other things, class certification and monetary relief.

We are also following another rising trend: lawsuits that deploy consumer protection statutes to address allegedly misleading environmental and sustainability claims. In Fields v. CVS Pharmacy, the plaintiff charges that the company’s use of the Roundtable on Sustainable Palm Oil (RSPO) “Certifiable Sustainable Palm Oil” seal on its fiber gummy product violates New York’s General Business Law and other statutes by misleading consumers who are willing to pay premium prices for a product made using environmentally sustainable practices. A more appropriate label, the complaint states, would be the RSPO’s “mixed” certification label, which applies to products made with a blend of sustainable and conventional palm oils. This case was brought in the Superior Court of Kings County, New York.

A second relevant new case is Roman v. Dude Products, LLC, a putative class action in the US District Court for the Northern District of California. In this case, the plaintiffs, two California consumers, charge that the company’s marketing of its product Dude Wipes includes false and misleading claims – for instance, that they are “plant-based.” The complaint states that the plaintiffs “understood the Products to be composed exclusively of water and plant-derived ingredients and to be gentle, suitable for sensitive skin, and formulated and tested to minimize the likelihood of allergic reactions,” but that the products “contain multiple synthetic, non-plant-based ingredients.” While the wipes’ packages include complete, accurate ingredient lists, the complaint continues, “the ingredient list does not cure the deception.” The plaintiffs are seeking class certification and a jury trial. See the complaint here.

Supply chain integrity and human rights

US: Call for Trump Administration to ban seafood caught or processed by China. Pointing to concerns over forced labor, the Congressional-Executive Commission on China (CECC) has called on the Trump Administration to issue an EO banning imports into the US of seafood caught or processed by China. A letter from the CECC states, “Chinese seafood is too often produced through forced labor and enters our market at prices honest American fishermen cannot match. That is not competition. It is abuse shipped into the United States.” The letter cites a 2025 EO, “Restoring American Seafood Competitiveness,” which states, among other things, that the US must address unfair trade practices and “level the playing field that has benefited foreign fishing companies.” That EO directed the US Trade Representative to examine the relevant trade practices of major seafood-producing nations, including the use of forced labor in the seafood supply chain, and consider appropriate responses. The CECC letter then states, “The United States should not help pay for these egregious behaviors. I urge you to use your authority to make our country the least hospitable market in the world for Chinese harvested seafood.” The CECC is an independent US government agency that monitors human rights and the development of the rule of law in China.

UK government proposes reforms to Modern Slavery Act 2015. On June 30, the Government of the United Kingdom introduced the Immigration and Asylum Bill, which includes a number of proposed reforms to section 54 of the Modern Slavery Act 2015 (MSA). At present, that section requires companies with an annual turnover of GBP36 million or more to prepare and publish an annual slavery and human trafficking statement, called a modern slavery statement. The reforms would bring UK legislation in line with similar reporting requirements in such jurisdictions as California and Canada.

Among the proposed changes:

• The content of in-scope companies’ modern slavery statements would become mandatory rather than discretionary. A new MSA Schedule 4ZA would set out required topics for these statements, which would cover such areas as risk assessments, due diligence processes, and compliance training.
  
  
• The bill includes a financial penalty regime for non-compliance: up to the greater of GBP1 million or 1 percent of total turnover.
  
  
• Building on extant MSA requirements, parent companies would be allowed to approve and sign statements on behalf of subsidiary undertakings – a change that would streamline this part of the process. In addition, the statement would be required to include a declaration by its signatories confirming that, to the best of their knowledge and belief, the statement is accurate.

This bill is in the early stages of the parliamentary process.

Australia considers reforms to modern slavery legislation. Australian Attorney-General Michelle Rowland announced this month that the federal government intends to toughen the modern slavery regime set out in the Modern Slavery Act 2018. The reforms would introduce a new criminal offense for companies that fail to prevent modern slavery in their supply chain, applicable to companies with consolidated revenue above AUD100 million. However, a defense would be available where a company can demonstrate it took reasonable steps to prevent modern slavery. The reforms would also introduce civil penalties and enforcement powers for non-compliance with the existing reporting obligations under the Act.

European Commission publishes guidance on implementation of the EU Forced Labour Regulation. The European Commission has published guidelines on the application of the EU Forced Labour Regulation, providing practical information on how the ban on products made with forced labor is expected to be applied and enforced across the EU. For companies with complex international supply chains, the guidance provides a clearer indication of the governance, risk assessment, and supply chain information that may be scrutinized once the Regulation becomes applicable. The guidelines provide greater clarity on how the EU Forced Labour Regulation will operate in practice, including the investigative process, enforcement measures, and the use of a risk-based approach to prioritize cases. They also set out examples of the information that authorities may request from businesses when assessing potential violations. While the Regulation does not impose a standalone due diligence obligation, the Commission recognizes due diligence as an important tool for preventing and addressing forced labor in supply chains. The guidance notes that existing due diligence processes may help businesses demonstrate efforts to identify, prevent, and mitigate forced labor risks during investigations. The guidance also highlights the interaction between the Forced Labour Regulation and other EU due diligence frameworks, such as the Corporate Sustainability Due Diligence Directive. The EU Forced Labour Regulation will apply from December 14, 2027. Of note: The guidelines apply immediately as interpretative guidance, and companies with exposure to higher-risk jurisdictions, sectors, or supply chains may wish to review their due diligence and risk management processes in light of the Commission's expectations. Also see our alert, “Navigating the EU Forced Labour Regulation: What the new guidelines mean for companies.”

European Commission adopts EUDR Information System simplification measures. On July 13, the European Commission adopted Implementing Regulation (EU) 2026/1565, updating the rules governing the EU Deforestation Regulation (EUDR) Information System used for submitting due diligence statements and simplified declarations. The Commission also adopted a Delegated Act to update and simplify the list of products covered by the EUDR. The Delegated Act updates Annex I of the EUDR, following stakeholder consultation and public feedback. It removes cattle hides, skins and leather, re-treaded tires, soybeans for sowing, articles of vulcanized rubber, conveyor and transmission belts, and aircraft and motor vehicle seats from the scope of the EUDR. It adds soluble coffee, certain palm oil derivatives, and frozen cattle tongues. The Delegated Act will now be sent to the European Parliament and the Council of the EU for scrutiny before entering into force.

The Implementing Regulation focuses on the practical operation of the EUDR Information System. The amendments introduce simplified declaration processes for micro and small primary operators, update the rules for attribution of due diligence statements, and establish contingency arrangements where the Information System is unavailable.
Following technical updates, the Information System reopened at the end of June. The Implementing Regulation entered into force following its adoption on July 13 and applies to the operation of the EUDR Information System.

Energy and natural resources

European Commission proposes reforms to EU Emissions Trading System. Following its review of the EU Emissions Trading System (ETS), the European Commission has published a legislative proposal proposing changes to the bloc's carbon pricing framework aimed at supporting industrial competitiveness while maintaining progress towards the EU's climate objectives. A central feature of the proposal, issued on July 17, is a revised ETS emissions reduction trajectory from 2031 onwards. The proposal would also extend free allocation and indirect carbon cost compensation beyond the current period. According to the Commission, these changes are intended to support industrial competitiveness and investment in decarbonization while remaining aligned with the EU's 2040 climate target and climate neutrality objective for 2050. The proposal also includes reforms to the Market Stability Reserve, increased financial support for industrial decarbonization through ETS revenues, and the integration of permanent domestic carbon removals into the ETS. The proposals will now be considered by the European Parliament and the Council through the ordinary legislative process. Any reforms will require agreement between the co-legislators before they can take effect.

China publishes 2026–2028 action plan for energy-sector energy saving and carbon reduction. On July 10, China’s National Energy Administration published the Energy-Sector Energy Saving and Carbon Reduction Action Plan (2026–2028). The plan aligns with the recently released 15th Five-Year Plan for Building a New Energy System and the Three-Year Action Plan on Industrial Energy Saving and Carbon Reduction (see our June 2026 issue). The 2026–2028 plan focuses on energy production, supply, storage, and sales, intensifying efforts to conserve energy and reduce carbon emissions in sectors such as coal, oil and gas, and coal-fired power generation. It also supports energy conservation and carbon reduction in major energy-consuming industries, promoting the replacement of fossil fuels with non-fossil energy sources. The goal is to improve energy efficiency, reduce carbon emissions in energy production and consumption, and drive coal and oil consumption to a peak. See the action plan here and the Q&A here.

Chile adds Climate Action Reserve to Green Tax Emissions Offset System’s recognized certification programs. Chile’s Ministry of the Environment has recognized the Climate Action Reserve (CAR) as the sixth External Certification Program of the Green Tax Emissions Offset System. For companies subject to Chile’s Green Tax, the recognition of CAR expands the alternatives available to offset taxed emissions and enables diversification of portfolios and suppliers. For project developers and managers, recognition of CAR may provide an additional avenue to monetize emissions reductions. Learn more in our brief alert, which is available in English and Spanish.

Sustainability in financial services

ASTM issues Green Finance Framework. In a move that could help advance the standardization of green finance, ASTM International, formerly the American Society for Testing and Materials, has formalized its inaugural Green Finance Framework. The framework was crafted to advance the issuance of green finance instruments in support of projects that concentrate on sustainable infrastructure, climate change adaptation and mitigation, and the circular economy. Confirming the framework’s alignment with both the International Capital Market Association Green Bond Principles and the Loan Market Association’s Green Loan Principles, Moody’s Ratings has assigned the framework a sustainability quality score of SQS2 (Very Good).

Singapore central bank issues latest sustainability report. The Monetary Authority of Singapore (MAS), the country's central bank and integrated financial regulatory authority, has published its Sustainability Report 2025/2026, detailing its efforts to strengthen the resilience of its financial sector to environmental risks and to develop a vibrant, sustainable finance ecosystem. Among other things, the report notes that during the 2025–2026 financial year, which ended March 31, MAS slashed its internal carbon emissions arising from business travel, electricity consumption, and outsourced services by about 33 percent, a dramatic reduction that exceeds its stated targets. The central bank has also worked to lower the carbon intensity of its investment portfolio by shifting toward less carbon-intensive sectors and excluding oil sands and thermal coal mining companies. Although loans linked to ESG performance declined during the covered period, the report states, Singapore remains the largest market for labeled debt issuance in the Association of Southeast Asian Nations.

Korea: Financial Services Commission finalizes mandatory sustainability reporting. Korea’s Financial Services Commission (FSC) has finalized the government’s roadmap for sustainability reporting. Of note: While regulators in the EU and the US have dialed back reporting requirements, Korea is actually expanding them, significantly increasing the number of companies required to comply with its mandatory sustainability reporting regime. That choice reportedly arises from institutional investors’ request that the country expand the scope of its requirements. Under the first phase of the roadmap, companies listed on the Korea Composite Stock Price Index (KOSPI) and with consolidated assets of at least KRW30 trillion based on 2026 data must begin reporting in 2027. Nearly 300 companies would be impacted by this mandate. Phase 2 will encompass companies with assets exceeding KRW10 trillion, which must comply by 2028. During phase 3, regulators will consider whether to lower the asset threshold further to encompass companies with consolidated assets of KRW2 trillion. Full implementation is projected to be in place by 2030. Reporting will be based on the Korean sustainability reporting standards, KSSB 1 (General Requirements) and KSSB 2 (Climate-related Disclosures), which, to support global interoperability, align with the widely used ISSB frameworks.

Calendar

Key global reporting deadlines

^{This calendar highlights coming reporting deadlines in key jurisdictions and is not a comprehensive summary of global sustainability regulations. Our Sustainability team’s interactive Global Sustainability Regulatory Dashboard provides our clients with an in-depth, comprehensive analysis of global sustainability regulations pertinent to their business. For more information about the Global Sustainability Regulatory Dashboard, please contact us via DLAPiperCorporateDataAnalytics@us.dlapiper.com.}

Coming events

• 2026 UN Convention to Combat Desertification (UNCCD) COP17 will take place August 17 to August 28, 2026 in Ulaanbaatar, Mongolia.
• 14th International Conference on Sustainable Development will be held September 9 and 10, 2026 in Rome.
• United Nations Climate Week 4 will be held September 7 to 11, 2026 in Baku, Azerbaijan.
• DLA Piper will host an array of events in support of Climate Week NYC, which takes place September 20 to 27, 2026 in New York City. Please be on the lookout for our registration updates
• The 2026 United Nations Climate Change Conference (COP31) will be held November 9 to 26, 2026 in Antalya, Turkey, with Australia presiding over negotiations.
• The 2026 United Nations Water Conference will take place December 2 to 4, 2026 in Abu Dhabi.

For professional responsibility reasons, these summaries may not include discussions of developments relating to certain matters.