As ESG continues to evolve from a voluntary framework to a regulatory imperative, July marked a pivotal month across regions with governments recalibrating policies, tightening disclosure norms, and expanding the scope of environmental and social accountability. From Europe’s strategic “quick fixes” to its sustainability directives, to North America’s legal tug-of-war over climate disclosures, and Latin America’s bold strides in circular economy and taxonomy frameworks regulators are signaling a clear shift toward enforceable, data-driven ESG governance. Meanwhile, APAC and Oceania are harmonizing standards and accelerating renewable transitions, and the Middle East & Africa are emerging as proactive players in carbon tracking and market regulation.
Europe
July 2025 saw significant regulatory recalibrations in the EU’s ESG landscape. The Council of the EU advanced its Omnibus I package, proposing to ease the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) by raising thresholds—excluding many SMEs and increasing employee and turnover limits. The CSRD “quick fix” allows large companies to defer certain disclosures until 2027, especially on biodiversity and Scope 3 emissions. The EU also adopted simplification measures under the Taxonomy Regulation, exempting non-material activities from reporting and streamlining KPIs. Meanwhile, the Green Claims Directive faced procedural delays, though the Commission reaffirmed its commitment. The Sustainable Batteries Regulation due diligence requirements were postponed to 2027. Additionally, the EU launched a roadmap for nature credits and expanded the Carbon Border Adjustment Mechanism (CBAM) to include downstream steel and aluminum products.
North America
In the U.S., ESG regulation remains contentious. The SEC requested the Eighth Circuit Court to resume litigation over its Climate Disclosure Rules, signaling a desire for judicial clarity amid political pushback. California’s SB 253 and SB 261 climate disclosure laws remain in effect despite legal challenges, with the California Air Resources Board (CARB) issuing detailed FAQs to guide compliance. At the state level, Colorado enforced its Extended Producer Responsibility (EPR) law, requiring annual reporting by July 31. In Canada, the Canadian Sustainability Disclosure Standards (CSDS) are progressing toward mandatory adoption, with updated guidance on Scope 3 emissions and financial institutions’ climate risk disclosures.
South America
Latin America is accelerating ESG reforms. Brazil, host of COP30, launched consultations on its National Adaptation and Mitigation Strategies and the Brazilian Sustainable Taxonomy (TSB), with final versions expected in August. The Brazil RoHS regulation on hazardous substances in electronics is nearing approval. Mexico proposed a sweeping Circular Economy and Waste Management Law, targeting emissions and promoting reuse, while Mexico City introduced a Waste Act banning single-use plastics and mandating producer responsibility. Chile expanded its Recycling Law (REP) to include textiles and set new recovery targets for batteries and electronics. Colombia and Peru proposed stricter hazardous waste and WEEE regulations, while Uruguay and Ecuador updated energy efficiency labeling standards. Argentina modernized vehicle and consumer safety rules, and AI regulation is emerging in the Dominican Republic, Costa Rica, and Panama.
APAC & Oceania
The Asia-Pacific region saw diverse ESG regulatory activity. Singapore introduced new controls on persistent organic pollutants, effective August 1, 2025, requiring permits and enhanced safety protocols. Vietnam enacted a new Electricity Law to boost renewable energy, aiming for 60% solar and wind by 2050. Australia published its Sustainable Finance Taxonomy, while Malaysia slashed renewable tariffs. The IFRS Foundation proposed amendments to 41 SASB standards and issued guidance on transition plan disclosures under IFRS S2. The GRI released new standards on climate change and energy, emphasizing just transitions and Scope 1–3 emissions. These updates reflect a strong regional push toward harmonized, science-based ESG reporting.
Middle East & Africa
The UAE took a leadership role by enacting Federal Decree-Law No. (11) of 2024, mandating carbon emissions tracking across all sectors, including free zones, aligning with its Net Zero 2050 strategy. In Africa, Kenya introduced Climate Change (Carbon Markets) Regulations, establishing frameworks for voluntary and compliance carbon markets. These developments mark a shift from voluntary ESG initiatives to enforceable mandates, positioning both countries as regional ESG frontrunners. Broader regional momentum is building, though progress remains uneven due to geopolitical and economic challenges.
