Eversheds Sutherland | Global Sustainability & ESG Insights – August & September 2025

Europe

Carbon Border Adjustment Mechanism

On September 29, the European Council adopted a regulation to simplify the Carbon Border Adjustment Mechanism (CBAM) as part of the Omnibus I legislative package. The reform is designed to ease administrative burdens and reduce compliance costs, particularly for SMEs, while preserving CBAM’s climate ambition, which continues to cover approximately 99% of embedded emissions in imported goods. Notable changes include a new de minimis threshold that exempts importers from CBAM obligations for up to 50 tons annually, streamlining requirements for small-scale operators.

Waste Framework Directive

On September 26, the amendment to the Waste Framework Directive was published. The updated Directive introduces extended producer responsibility for textiles, requiring producers to cover the costs of collection, sorting, reuse, and recycling. Fees will be linked to the environmental performance of products. The Directive also sets binding food waste reduction targets: a 10% cut in processing and manufacturing, and a 30% per capita reduction at retail and consumption levels, based on 2021–2023 averages.

Deforestation Regulation Delayed

On September 23, the European Commission announced plans to delay the Deforestation Regulation  by another year, citing unresolved issues with the IT system required to monitor imports. The regulation, which aims to block goods linked to deforestation such as palm oil, soy, cocoa, and wood from entering the EU, was already delayed once. The delay must first be agreed by the EU Council and Parliament.

Regulation to Reduce Microplastic Pollution

On September 22, the European Council adopted the Regulation Preventing the Loss of Plastic Pellets into the Environment. The Regulation requires companies handling pellets to implement risk management plans covering packaging, handling, training, and clean-up procedures. Operators managing over 1,500 tonnes annually must obtain third-party certification. Non-EU carriers must appoint an authorised EU representative. The European Parliament is expected to vote on the Regulation October.

Data Act

On September 12, the Data Act officially entered into force. The Act grants users greater control over data generated by connected devices such as smartwatches, cars, and industrial machinery. Key provisions include enabling users to share device data, choose cost-effective repair options, and switch between cloud providers. The Act also prohibits unfair data-sharing contracts. This initiative complements the Data Governance Act and forms part of the EU’s broader strategy to simplify and strengthen its digital framework.

Environmental Omnibus

On September 10, the feedback period closed for the European Commission’s call for evidence on a legislative initiative to simplify administrative burdens in environmental law. Targeting waste, products, and industrial emissions, the omnibus proposal aims to make EU rules easier and less costly to apply. The full legislative proposal is expected in Q4 2025.

ESMA and EEA Sign MoU to Boost Cooperation in Sustainable Finance

On August 20, the European Securities and Markets Authority (ESMA) and the European Environment Agency (EEA) signed a Memorandum of Understanding (MoU) to enhance collaboration in sustainable finance. The MoU focuses on integrating environmental factors into the EU’s sustainable finance framework and improving its supervision. It establishes mechanisms for exchanging data, expertise, and capacity-building between the two bodies, while also promoting cooperation between national securities regulators and environmental authorities.

Consultation on the Circular Economy Act

On August 1, a consultation on the Circular Economy Act was published. The proposed Act aims to create a unified market for secondary raw materials. Set for adoption in 2026, the Act focuses on two key pillars: enhancing e-waste recycling and boosting demand for secondary critical raw materials. It seeks to reduce reliance on imported resources, improve economic resilience, and support decarbonization. Measures include digitalizing producer responsibility schemes, and mandating circular procurement standards. The consultation will close November 6, 2025.

 

UK

Key Sustainability Disclosure Consultations close

On September 17, the three consultations aimed at strengthening sustainability reporting and assurance closed. The first proposed updates to UK Sustainability Reporting Standards, including removing transition reliefs and making certain classification references optional. The second explored oversight for third-party assurance of sustainability disclosures, suggesting a voluntary registration regime overseen by the Audit Reporting and Governance Authority. The third reviewed climate-related transition plan requirements, seeking feedback from pension schemes on integrating new obligations with existing climate reporting rules. Together, these initiatives aim to improve consistency, transparency, and accountability in UK sustainability disclosures.

Draft Regulations Environmental Protection (Wet Wipes Containing Plastic) Regulations published

On September 16, the Government laid draft Environmental Protection (Wet Wipes Containing Plastic) Regulations 2025. It sets out to reduce plastic pollution and environmental harm. The ban applies to all businesses supplying such products to end users, with limited exemptions for medical use and supply by registered pharmacies under strict conditions. The regulations form part of a broader UK-wide initiative to phase out plastic-containing wet wipes and support the transition to more sustainable alternatives.

DEFRA Launches Consultation to Modernize Environmental Permitting for Industry

On August 26, a consultation to reform the Environmental Permitting regime for industrial installations in England opened. Key proposals include shifting best available techniques standard-setting to the Environment Agency, applying integrated pollution control to more installations, and introducing flexible regulatory tiers for low-risk activities. Sector-specific reforms target streamlined regulation for areas like green hydrogen and battery storage, while new activities such as battery manufacturing and metal mining may be added. The consultation will close October 21, 2025.

Draft Transition Finance Guidelines

On August 18, the UK Transition Finance Council launched a consultation on draft Transition Finance Guidelines. The guidelines aim to help assess the credibility of transitioning entities globally, especially in high-emitting sectors like industry, transport, and agriculture. The voluntary framework focuses on entity-level application and aims to provide investors with tools to evaluate decarbonization plans. It outlines four principles: credible ambition, action into progress, transparent accountability, and addressing dependencies. The guidelines are designed to be globally interoperable and align with existing disclosure frameworks. Final publication of the guidelines is expected in March 2026.

Welsh Government Consults on Future Drinks Container Deposit Return Scheme

On August 18, the Welsh Government launched a consultation on its proposed drinks container deposit return scheme (DRS). The DRS is set to cover PET plastic, glass, aluminum, and steel containers from 150ml to 3 liters, including both single-use and reusable formats. The consultation explores phased glass inclusion, reuse targets for producers and the deposit management organization, and a reuse roadmap from the drinks industry. It also considers expanding the scheme’s scope, incentivizing standardized bottles, and adjusting deposit levels. Sector-specific exemptions and regulatory frameworks are proposed to support a transition to reusables. The consultation closes November 10, 2025.

Government Proposes Unified Minimum Wage

On August 5, the Government set out new considerations for the Low Pay Commission when recommending next year’s National Living Wage and National Minimum Wage. This includes removing age bands in minimum wage rates, moving toward a single adult pay rate. The updated remit for the LPC will now focus on narrowing the gap between the 18–20-year-old National Minimum Wage and the National Living Wage.

 

US

Proposal on the Reconsideration of the Greenhouse Gas Reporting Program

On September 16, the US Environmental Protection Agency proposed eliminating the Greenhouse Gas Reporting Program (GHGRP). The GHGRP currently requires facilities and suppliers across 47 source categories to report greenhouse gas emissions data. If finalized, reporting requirements would end for all sectors except petroleum and natural gas systems, with natural gas distribution reporting permanently discontinued and other segments deferred until 2034.

SEC publishes Spring 2025 Agenda

On September 4, the Securities and Exchange Commission (SEC) released its Spring 2025 Agenda, signaling a shift towards deregulation and away from ESG initiatives.  The Agenda withdraws from  rulemaking on climate and board diversity disclosures. The Agenda also proposes streamlining reporting requirements and modernizing shareholder proposal processes.

CARB Advances Climate Disclosure Rules Under SB 253 and SB 261

On August 21, the California Air Resources Board (CARB) held its second public workshop on implementing California’s climate disclosure laws, SB 253 and SB 261. CARB proposed revised definitions for the terms “revenue”, “doing business in California,” and “parent-subsidiary relationships”, and introduced a flat annual fee structure. SB 253 mandates annual Scope 1–3 emissions disclosures for companies with $1 billion+ in revenue, while SB 261 requires climate risk reports from companies with $500 million+ in revenue. Draft templates and a list of covered entities are expected to be published in the coming weeks.

 

Compliments of Eversheds Sutherland – a member of the EACCNY