“I think the regulatory landscape is a full-time job for many, many companies.”
Jayne Cunningham, Focus Group Leader – Environmental, Beazley
Regulatory Jeopardy
How can businesses with global operations remain fully compliant with competing environmental-related regulations?
This year, a raft of new environmental-related regulations are set to come into force for certain businesses that will impose stricter reporting requirements and, in some cases, compel businesses to restructure their operations in order to comply. These new regulations create a significant degree of uncertainty for multinational firms in particular, primarily due to growing divergence between jurisdictions.
Our latest Risk & Resilience research data reveals, almost a fifth (19%) of global executives cited environmental, social and governance (ESG) risk, and the failure to comply with new ESG requirements including related legislation, regulation, or reporting requirements, as their top concern this year.
Corporate Sustainability Reporting Directive (CSRD)
Large publicly listed in the EU companies must report FY 2024 data.
International Sustainability ​Standards Board (ISSB)​
IFRS S1 and S2 standards.
EU ESG Ratings Regulation
Regulation enters into force.
California Regulations
Voluntary Carbon Market Disclosures Act (AB 1305) compliance date.
ESG Fund Naming Guidelines
Mandatory for existing funds.
Harmonisation of ESG Reporting Standards in Europe
Omnibus simplification package updates.
Sustainable Finance Disclosure Regulation (SFDR)
Increased enforcement actions and new categorisation scheme.
EU Taxonomy
Draft report on activities and technical screening criteria published.
Corporate Sustainability Due Diligence Directive (CS3D)
Deadline for EU Member States to transpose the CS3D into national law.
Hong Kong
Full adoption of ISSB standards for large entities.
Corporate Sustainability Reporting Directive (CSRD)
All large EU companies must report FY 2027 data, including large EU subsidiaries of third country firms.
Corporate Sustainability Due Diligence Directive (CS3D)
EU companies with more than 3,000 employees and a net turnover above €900 million, along with equivalent non-EU companies, will also need to adhere to these regulations from 2028.
Singapore
Emissions assurance for large non-listed companies.
Corporate Sustainability Reporting Directive (CSRD)
All publicly listed SMEs must report FY 2028 data.
China
Full framework operational for ESG reporting.
Competing regulations are forcing businesses to make tough decisions when it comes to compliance. Executives must understand the global footprint of their business and identify which jurisdiction enforces the highest standards.
External advice is crucial, and executives should engage with both the regulators themselves and their industry peers to understand how best to comply with regulations whilst maintaining profitability.
There is a clear role for the insurance industry, which is well-placed to provide clear guidance to firms of all sizes and sectors. For multinationals, global insurance solutions can provide comprehensive, tailored coverage to businesses across a host of specialty lines.
Insurers can also help businesses mitigate the impact of regulation coming down the track, advising clients on how best to future proof their operations and prepare for likely reporting requirements.
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[ii] Highly’ and ‘moderately’ prepared answers combined.