Weekly ESG Regulatory Roundup: Key Developments Across the US, UK, EU and Asia

Week ending 24 July 2026

Two themes ran through the past fortnight. Regulators on both sides of the Atlantic kept trimming disclosure requirements, Brussels adopted its slimmed-down reporting standards, the FCA closed a consultation on scrapping TCFD rules for funds, while courts and enforcement agencies moved in the opposite direction, expanding what companies can be held to. A French court just ordered an oil major to put Scope 3 in its risk mapping. Simplification upstream, tightening downstream.

Here is what moved.

United States

CARB opens the 2027 rulebook. California's Air Resources Board held a virtual public workshop on 21 July covering regulatory concepts for Scope 1 and Scope 2 reporting from 2027 onward, including data assurance requirements and its proposed approach to Scope 3. This is the substantive follow-on to the June decision to push the first SB 253 reporting deadline from 10 August to 10 November 2026, alongside limited changes to the implementing regulation. Scope 3 reporting remains on track to begin in 2027. Companies that treated the three-month extension as breathing room should read the workshop materials as the real signal: assurance is the next thing being defined.

New York halts large data centres. Governor Hochul signed Executive Order No. 62 on 14 July, creating the first statewide moratorium on new hyperscale data centres. It pauses discretionary Department of Environmental Conservation permits for up to a year for facilities that consume, or could consume, 50 megawatts or more, while the state builds a regulatory framework and the Department of Public Service prepares a Generic Environmental Impact Statement covering energy demand, water use and quality, and air quality. The detail that matters: applications DEC had already declared complete before 14 July fall outside the pause, and the order does not touch local zoning or municipally issued permits. Facilities used primarily for manufacturing, medical care, education or specified research are excluded. Driving it is grid pressure, roughly 12 gigawatts of data centre load sat in the NYISO interconnection queue as of May. Guidance for localities negotiating community benefits is due within 60 days. A separate bill, the Responsible Data Center Development Act, passed the legislature at the end of session with a lower 20-megawatt threshold; it has not been signed.

Forced labour guidance consolidated. Customs and Border Protection issued a 79-page operational guidance for importers in mid-June, pulling enforcement under the Uyghur Forced Labor Prevention Act, CAATSA and the general forced labour import prohibition into a single framework for the first time. It supersedes the 2022 UFLPA guidance and sets out recommended supply chain documentation for high-priority sectors including cotton, polysilicon, apparel, aluminium and seafood. Since UFLPA took effect in 2022, enforcement actions have touched more than 69,000 shipments worth roughly $3.94 billion.

United Kingdom

FCA consultation closes on fund climate reporting. The window shut on 13 July for the FCA's proposal to replace TCFD-based climate reporting for investment products with a materiality-based regime. Under the proposal, asset managers would disclose climate risks and opportunities only where financially relevant, with institutional investors able to request product-level emissions data annually. The regulator estimates around £20 million in annual compliance savings across the sector, with implementation proposed for autumn 2026.

Deforestation due diligence framework announced. The government confirmed on 23 June that it will introduce mandatory due diligence in Great Britain covering illegal deforestation in supply chains. Businesses with turnover above £1 million using forest risk commodities, wood, cattle, cocoa, coffee, palm oil, rubber, soy and certain derived products, would need due diligence systems, activity reporting and geolocation data on product origins. It is designed to sit alongside the EU Deforestation Regulation. Legislation is expected in 2027, so this is a planning item rather than a compliance one.

European Union

Revised ESRS adopted. The Commission adopted the revised European Sustainability Reporting Standards on 3 July, together with a voluntary standard for smaller companies. Mandatory data points fall by more than 60% and total data points by more than 70%, with per-company reporting costs projected to drop by over 30%. The voluntary standard also introduces a value-chain cap that stops CSRD reporters demanding information from value chain partners beyond what it covers, a meaningful constraint on how far large companies can push data requests down their supply chains. Both instruments now sit with the Parliament and Council for a two-month scrutiny period, extendable by a further two months, before they apply.

Taxonomy simplification consultations running. ESMA, the EBA and EIOPA have each published proposals to simplify EU Taxonomy disclosure requirements for companies, asset managers, banks and insurers. Consultations close on 12 August.

Bank of Italy signs up to ESG stress testing guidelines. On 3 July the Bank of Italy notified the EBA that it intends to comply with the joint European Supervisory Authorities guidelines on ESG stress testing, which apply from 1 January 2027. The guidelines push supervisors toward two exercise types: short-horizon capital and liquidity resilience against macro-financial shocks including ESG risks, and long-horizon business model resilience across ESG scenarios over at least ten years.

Hungary tightens ESG consultant accreditation. From 1 July, both new applicants and currently accredited ESG consultants must obtain a qualification through a training institution accredited by the Hungarian Economic Development Agency. Failure to file proof can mean removal from the register, and where a deregistered individual was one of the accredited consultants underpinning a legal entity's accreditation, the entity's status may fall with it.

Asia-Pacific

South Korea finalises its disclosure roadmap. The Financial Services Commission published the final mandatory sustainability disclosure roadmap on 8 July, and the phasing is unusually generous. KOSPI-listed companies with KRW 10 trillion or more in consolidated assets report first, from 2028 on FY2027 data; the KRW 5 trillion tier joins in 2029, with possible extension to KRW 2 trillion from 2030. Disclosures go into corporate business reports under the Financial Investment Services and Capital Markets Act. Three features stand out: broad relief from civil, administrative and criminal liability during the first three years except for intentional greenwashing; third-party verification only from 2030; and Scope 3 deferred by three years for each tier. Initial standards are climate-focused, with other ESG topics voluntary.

Vietnam opens forest carbon markets. Decree No. 180/2026/ND-CP took effect on 15 July, establishing the country's first comprehensive framework for forest carbon sequestration and storage services, including creation, management and transfer of emission-reduction results and forest carbon credits. Eligible activities span forest protection, reduced deforestation, restoration, afforestation, enrichment and certain agroforestry models. Credits issue only after projects are formulated, registered and verified under recognised MRV methodologies. National standards for carbon projects, MRV, appraisal and safeguards are still being drafted.

Pakistan sets ESG fund rules. The SECP issued the country's first ESG Mutual Funds Framework on 1 July, requiring ESG funds to hold at least 50% of net assets in ESG-aligned investments. That is down from the 70% floated in the April consultation. Equity-based ESG funds will draw primarily on companies in the Pakistan Stock Exchange's Sustainability Index and those aligned with the SECP's ESG Disclosure Guidelines.

Enforcement and Litigation

TotalEnergies ordered to map Scope 3. The Paris Judicial Court ruled on 25 June, in a case brought by the City of Paris and four NGOs, that TotalEnergies breached its duty of vigilance by leaving Scope 3 out of its risk mapping, emissions from customers burning its oil and gas, which account for roughly 90% of its carbon footprint. The company has six months to publish a new vigilance plan with updated climate risk mapping and appropriate mitigation, with a further hearing on 21 January 2027.

Read it as a partial win, not a rout. The court expressly declined to order quantified emissions targets, production cuts, or a halt to new hydrocarbon projects, and TotalEnergies publicly welcomed those findings. What makes it consequential is narrower and more useful: it confirms climate risks fall within the environmental scope of France's 2017 duty of vigilance law, and treats downstream emissions as part of mandatory risk mapping rather than a reporting line item. The law reaches French-headquartered companies with more than 5,000 employees in France or 10,000 worldwide, if that is you, and you have material downstream emissions, your vigilance plan is now the document to review.

Volvic penalised for carbon neutrality claims. Two days earlier, the same court held the bottled water brand liable for misleading commercial practices over "carbon neutral" and "100% recycled" claims it found scientifically inaccurate, awarding EUR 75,000 in damages plus EUR 10,000 in costs to a consumer association. Modest sums, but another data point in the European trend of courts testing environmental marketing claims on their technical merits.

Proxy advisor laws blocked in two states. Federal judges in Kansas (24 June) and the Southern District of Indiana (28 June) granted preliminary injunctions to ISS and Glass Lewis, stopping laws that would have required proxy advisors to publish a written financial analysis, or state that none existed, when recommending against management. Both courts leaned on the First Amendment, with the Kansas judge finding the statute discriminated by viewpoint because its obligations triggered only for recommendations opposing management.

Seventeen states sue California over packaging EPR. A coalition of Republican attorneys general led by Nebraska filed suit on 22 June against SB 54, California's Plastic Pollution Prevention and Packaging Producer Responsibility Act, which took effect on 1 May. The complaint alleges Commerce Clause interference and raises First Amendment objections to compelling producers to fund and associate with a private organisation.

Dates Ahead

Compiled from primary regulatory sources and law firm reporting as of 24 July 2026. Several items, notably California's revised deadline and the EU's revised ESRS, remain subject to final approval processes and may change. Verify against the issuing authority before acting.

Sources

Simpson Thacher & Bartlett, European Commission, ESG Book, Greenscope, KnowESG, Davis Polk, White & Case, Office of Governor Kathy Hochul, CNBC, Axios, amNY, MLex, ICLG, EJIL: Talk!, Business & Human Rights Resource Centre, TotalEnergies, Tribunal Judiciaire de Paris, Nebraska Attorney General, KPMG UK, Linklaters

This article is intended for general professional information and does not constitute legal, financial, or investment advice.