As regulatory expectations evolve across regions, ESG leaders must prepare their organizations to comply with changing rules—and executives must understand how these shifts affect strategy, risk, and growth. Below, we break down the most critical developments into four actionable themes.

1. Climate Risk Disclosure Is Maturing—But Diverging

Across the globe, regulators are tightening climate risk reporting—but they’re doing so at different speeds and with different approaches:

• ISSB Proposals: The ISSB is proposing to ease Scope 3 emissions reporting for financial firms by excluding hard-to-measure categories like derivatives and insurance underwriting. However, financed emissions remain in scope.

• China and New Zealand: Both countries are exploring closer alignment with ISSB standards, though China’s draft disclosure standards will initially remain voluntary and localized.

• Canada: In contrast, Canada has paused work on its mandatory disclosure rule due to geopolitical and economic volatility, though material climate risk disclosure is still required under securities law.

Key Implications: Harmonization is coming—but not uniformly. Companies should prepare for a baseline of ISSB-aligned reporting, while monitoring jurisdictional differences that may require tailored compliance approaches.

2. EU Is Recalibrating Its ESG Rules to Drive Adoption

In a push to reduce compliance burden while keeping momentum behind the Green Deal:

• CSRD & Due Diligence Directives: Implementation timelines have been delayed—by up to two years for some firms—through a “stop-the-clock” mechanism approved by EU policymakers in April.

• EFRAG Consultation: The EU’s technical advisor is seeking input to simplify the ESRS standards, including what data points matter most, how to focus on materiality, and where global alignment can improve usability.

• Deforestation & Microplastics: Streamlined rules have been issued for both the Deforestation Regulation (e.g., allowing annual due diligence statements) and new microplastics laws targeting pellet use in manufacturing.

Key Implications: The EU is reducing red tape—not the need for ESG action. Simplified reporting frameworks will still demand robust data systems, materiality assessments, and proactive supply chain engagement.

3. Environmental Accountability Expands Beyond Emissions

Regulations are moving beyond carbon to encompass biodiversity, land use, and pollution prevention:

• Soil Health in the EU: A new soil monitoring law will require member states to create a public registry of contaminated sites, assess soil health using EU-wide methods, and address health and environmental risks.

• Brazil’s Mitigation Strategy: Brazil has launched a national plan focused on deforestation, renewable energy, and sustainable supply chains—key for companies sourcing from the region.

• UK Financial Sector Oversight: The UK’s Prudential Regulation Authority is reinforcing climate risk oversight expectations, requiring scenario analysis and board-level accountability.

Key Implications: ESG strategy must widen its lens. Companies should anticipate new disclosure areas—beyond carbon—and ensure cross-functional alignment between sustainability, compliance, and risk.

4. Maritime, Supply Chain & Operational Emissions Under Scrutiny

New standards are targeting high-impact sectors and operational intensity:

• IMO Maritime Rules: Binding rules will go into effect in 2027, requiring large ships to meet fuel efficiency and carbon intensity benchmarks. Noncompliance will trigger contributions to an IMO-managed net-zero fund.

• EU Microplastic Regulation: Operators handling plastic pellets will need third-party certification, packaging controls, and risk management plans.

• Operational Due Diligence Simplifications: EU updates allow companies to reuse due diligence statements for re-imported goods and streamline documentation.

Key Implications: Operational emissions—from logistics to manufacturing inputs—are increasingly regulated. Supply chain and logistics leaders need to be brought into ESG compliance planning early.

Final Thought: ESG Isn’t Getting Simpler—It’s Getting Smarter

While some jurisdictions are simplifying their frameworks, the overall direction is clear: ESG reporting is becoming a permanent, strategic feature of doing business globally. Forward-thinking companies will use this moment not just to react—but to lead.