Happy New Year! As we welcome 2026, sustainability and ESG regulations continue to evolve at an unprecedented pace across all major regions. This edition provides a global snapshot of key developments during the month of December to help you stay ahead.
Europe
The European Union has introduced significant changes to streamline sustainability reporting. The CSRD thresholds have been raised to €450 million in turnover and over 1,000 employees, reducing the number of companies in scope. The CSDDD thresholds were also increased. Additionally, the European Commission’s “quick-fix” amendments to ESRS allow phased relief for certain disclosures, including Scope 3 and biodiversity, through FY2026. EFRAG has proposed a simplified ESRS framework, reducing mandatory datapoints by nearly 70% and improving interoperability with ISSB standards. Meanwhile, the SFDR is undergoing a major overhaul, introducing three new product categories – sustainable, transition, and ESG Basics, thus replacing Articles 8 and 9. These changes aim to simplify compliance while maintaining transparency and investor confidence.
North America
In the United States, the SEC’s climate disclosure rule remains in legal limbo after the Commission withdrew its defense in 2025, leaving federal requirements uncertain. However, California is moving forward with its landmark climate laws: SB 253 mandates Scope 1 and 2 emissions reporting starting August 2026, while SB 261 on climate risk disclosure is currently pending litigation. In Canada, the CSSB has launched voluntary standards aligned with IFRS S1 and S2 effective January 2025, with discussions underway for mandatory adoption. Across the Atlantic, the UK’s SDR and anti-greenwashing rules are now in effect, with entity-level disclosures phased in through December 2026. These developments underscore the growing importance of state-level and international frameworks for North American companies.
South America
Brazil has taken a leadership role in the region by mandating sustainability reporting aligned with ISSB standards (IFRS S1 and S2) for publicly listed companies, funds, and securitizers starting FY2026, with early adoption permitted for FY2025. This move positions Brazil as a regional benchmark for ESG transparency and signals growing investor expectations for standardized disclosures across South America.
APAC & Oceania
Asia-Pacific jurisdictions are rapidly converging on the ISSB global baseline. Australia and New Zealand have advanced climate disclosure regimes, with Australia’s Treasury-led bill and New Zealand’s Part 7A framework setting strong precedents. Singapore is moving toward mandatory climate reporting for listed companies, while India continues to strengthen its BRSR Core requirements. Japan and Hong Kong SAR have announced functional alignment with ISSB standards, and Malaysia is progressing toward adoption. These developments highlight the region’s commitment to harmonized sustainability reporting and improved comparability for global investors.
Africa
Momentum is building in the Middle East and Africa, with the UAE introducing Federal Decree-Law No. (11) of 2024 focused on climate impact reduction. Several African nations, including Ghana, Kenya, and Nigeria, are adopting or aligning with ISSB standards, signaling a broader regional shift toward standardized ESG disclosures. These changes reflect growing regulatory and investor pressure for transparency and climate risk management in emerging markets.
