The Latest ESG Regulatory Changes and What They Mean for Your Business

The sustainability regulatory landscape is evolving faster than ever, with new standards, disclosure requirements, and reporting expectations emerging across global markets. To help organisations stay ahead, we’ve summarised the latest updates shaping ESG, climate reporting, and corporate sustainability. Below is a concise overview of the key developments every business should be aware of.

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Notable ESG Changes:

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European Union

Corporate Sustainability Reporting Directive (CSRD): The European Commission has formally delayed the adoption of specific European Sustainability Reporting Standards (ESRS). This postponement includes the standards for third-country undertakings (delayed until after October 2027) and all sector-specific standards.

Australia

AASB S2 Climate-related Disclosures: The Australian Accounting Standards Board (AASB) has issued guidance requiring that biogenic emissions be included within the main Scope reporting categories for greenhouse gas disclosures in line with ISSB.

United states

Senate Bills 253 (Climate Corporate Data Accountability Act) and 261 (Climate-Related Financial Risk Act): The California Air Resources Board (CARB) has published a preliminary list of entities that may be subject to the climate-related reporting obligations under these new statutes. Over 4,000 companies—including most S&P 500 firms—will fall under new state climate disclosure laws, driving significant compliance planning that will drive near-term reporting action.

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Notable Supply Chain Changes:

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EU CSDDD: European Parliament rejected the JURI Committee’s Omnibus I mandate

The European Parliament rejected the latest plan for the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), so lawmakers are reworking the details. The next big debate and vote will happen from November 11 to 13, 2025. The latest plan has major changes:

Only very large companies, those with 5,000 or more employees and annual sales above EUR 1.5 billion, would be covered.

In-depth due diligence would focus on areas where negative impacts are most likely. This change would reduce compliance obligations in lower-risk areas.

Fines would be capped at 5% of annual revenue if companies break the rules.

Requirements to create climate transition plans would be relaxed, giving businesses fewer obligations to change how they operate.

US-Malaysia and US-Cambodia Trade Agreements – Forced Labour Rules

Within the reciprocal trade agreements there is a clause whereby countries must prohibit the importation of goods made with forced labour. The agreements also include:

The deals respect U.S. border controls like Withhold Release Orders (WROs).

Countries will share enforcement tips and work together on best practices.

All sides commit to upholding international labour rights.

If your business buys from these countries or the region, it’s time to check operations and make sure you follow the new requirements.

Taiwan: Mandatory Human Rights Due Diligence regulation

The Taiwanese government has released a draft of the Supply Chain Enterprise Human Rights Guidelines and Framework that will require big manufacturers (those with annual sales over NT$50 billion) to run full human rights checks on their own teams and direct suppliers, and to publish details in their sustainability reports. These checks will become mandatory in 2026, with the first public reporting needed in 2027. This will push Taiwanese businesses to look closer at worker rights and risks across their supply chains.

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