With Climate Week NYC now behind us, we’re taking a look at September’s key policy developments and what they mean for the months ahead. There’s plenty for sustainability teams to catch up on, from revised EU reporting standards and new rules on environmental claims to the UK’s finalized sustainability reporting requirements for listed companies.
In California, companies also have new guidance to help prepare their first SB 253 reports ahead of the November deadline. Here’s a look at what changed, what’s still proposed, and what to keep on your radar as we head into October.
Draft ISO net-zero standard returns for further review
ISO’s draft standard for net-zero-aligned organizations, ISO/DIS 14060, did not receive sufficient approval in a ballot of national standards bodies. The committee will review the feedback and determine the project’s next steps.
GRI pilots new approach to sector reporting with food and beverages standard
On September 28, the Global Reporting Initiative (GRI) announced work on a new sector standard for food and beverage companies. The project will pilot a faster process for developing sector standards while retaining GRI’s multistakeholder review. The standard will help companies identify likely material topics across their operations and value chains and direct them to existing GRI Topic Standards for reporting. GRI is seeking up to 20 experts to join a Peer Review Group, with applications open through October 23, 2026.
EU proposes sustainability rating scheme for data centers
The European Commission proposed a common sustainability rating scheme for data centers with capacity above 500 kW. Building on reporting requirements introduced in 2024, the scheme would cover energy and water use, as well as contributions to the energy system, such as waste heat reuse. The delegated regulation is subject to a two-month scrutiny period by the European Parliament and Council, with the first labels expected in 2027.
UK proposes overhaul of corporate sustainability reporting requirements
On September 7, the UK’s Department for Business, Innovation, Science, and Trade (BIST) published a consultation paper proposing reforms to corporate reporting obligations in the Companies Act. The proposal includes potential rollbacks of rules for non-financial disclosure, including reporting on issues like environmental impact, employee diversity, social responsibility, and human rights. Companies would still be expected to report on these topics where financially material. These proposed changes to strategic reporting would not remove existing Companies Act climate-related financial disclosure requirements. Consultation is open until November 30, 2026.
European Parliament agrees on proposal to expand CBAM carbon import tax to downstream products
The European Parliament agreed to proposed changes to the Carbon Border Adjustment Mechanism (CBAM), including expanding CBAM to cover some downstream products, which aims to prevent production from shifting to countries with weaker climate laws. Changes include a long list of downstream products, as well as tougher anti-circumvention rules to prevent abuse, and a temporary decarbonization fund to protect EU firms in export markets. Plenary adopted its position 464 to 50, with 159 abstentions. Parliament is now ready to start negotiations with EU member states on the final shape of the bill.
EU Deforestation Regulation Delegated Act enters into force
On September 18, the EU Deforestation Regulation Delegated Act on product scope entered into force. Company obligations under EUDR begin to kick in at year end, on December 30. The Delegated Act updates Annex I of Regulation, removing from scope cattle hides, skins and leather, articles of vulcanized rubber, conveyor and transmission belts, and aircraft and motor vehicle seats, and adding soluble coffee and specified palm oil derivatives. The newly added products will become subject to EUDR requirements from December 30, 2027.
Sustainable Finance Disclosure Regulation (SFDR) 2.0 advances
The European Parliament’s Economic and Monetary Affairs Committee adopted its position on proposed amendments to the Sustainable Finance Disclosure Regulation (SFDR), which governs sustainability disclosures by financial market participants and for financial products. The negotiating mandate is expected to be announced at the October plenary session, after which the final legislation must be negotiated with the Council of the European Union. The changes are not yet final.
UK FCA adopts “comply or explain” approach across sustainability reporting
On September 30, the UK’s Financial Conduct Authority (FCA) finalized rules requiring covered listed companies to report against the UK Sustainability Reporting Standards, the UK-endorsed ISSB standards, or explain any departures. The approach applies to both climate and wider sustainability disclosures, replacing the FCA’s proposal to make most climate disclosures mandatory. The rules replace the existing TCFD-aligned framework for accounting periods beginning on or after January 1, 2027, with the first reports published in 2028. Companies can use one year of transitional relief for Scope 3 emissions disclosures and two years for wider, non-climate sustainability disclosures.
EU consumer protection rules on greenwashing take effect
The rules introduced by the Empowering Consumers for the Green Transition Directive began applying on September 27. They address misleading environmental claims and sustainability labels in consumer-facing commercial practices. The European Commission also published updated Q&A guidance to support implementation.
European Commission publishes revised ESRS
The European Commission published the revised European Sustainability Reporting Standards (ESRS) in the EU Official Journal. The rules will enter into force on November 10, 2026, applying to fiscal years beginning from January 1, 2027.
California releases guidance for first SB 253 reports
On September 1, the California Air Resources Board (CARB) released its guidance for SB 253 2026 reporting. The deadline for Scope 1 and Scope 2 is November 10, 2026, assuming the Office of Administrative Law (OAL) approves the initial regulation. The guidance is consistent with the December 2024 Enforcement Notice with reliefs and flexibility for first-year reporting:
- Entities can submit an existing annual report, data already reported elsewhere, or CARB's draft template
- CARB will accept submissions whether or not limited assurance was obtained
- For Scope 2 factors, eGRID 2023 or the Cornerstone eGRID 2024 dataset both work, as does another credible source the entity identifies
- Companies that were not collecting data as of December 5, 2024 are asked to send a statement of non-reporting on letterhead instead
- The intake platform is voluntary this year and can be used for contact information, the report itself, or billing information for fee invoicing
- While use of the platform is voluntary, this does not make the underlying reporting obligation voluntary. Companies may also submit reports by email to climatedisclosure@arb.ca.gov.
In subsequent listening sessions, CARB provided additional guidance for specific industries:
- Manufacturing, Industrial, Fuel & Life Sciences
- Agriculture, Food, Beverage & Forestry
- Energy, Utilities, Transportation, Logistics & Waste Management
- Retail, Consumer Goods, Technology & Commercial Services
- Banking, Finance & Insurance
Canada explores framework for international carbon trading
On September 24, Canada announced it is exploring a framework for trading internationally transferred mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement. The framework could help Canadian companies participate in international carbon markets and attract investment in carbon removal technologies and nature-based solutions. Credits would need to represent emissions reductions or removals beyond what would otherwise occur, with safeguards to prevent double counting between countries. The government plans to engage provinces, territories, Indigenous organizations, and other partners as it develops its approach.
EPA repeals most 2024 power plant emissions standards
On September 14, the EPA finalized a partial repeal of its 2024 greenhouse gas standards for fossil fuel power plants. Some requirements remain, including efficiency-based standards for new combustion turbines. The change directly affects operators of covered plants. For companies purchasing electricity, the potential impact is longer term: changes in the generation mix could affect grid emissions and progress toward Scope 2 reduction targets. Companies whose decarbonization plans assume a cleaner grid should review those assumptions as energy policies evolve.
SEC proposes changes to shareholder proposal rules
On September 16, the SEC proposed rescinding Rule 14a-8, which would leave decisions about shareholder proposals to state law and company governing documents. Proposed amendments to Rule 14a-4 would also expand companies’ discretionary voting authority over certain proposals excluded from their proxy materials. For public companies, these changes could affect how investors bring climate-related requests to a shareholder vote. Sustainability teams should consult with legal and investor relations colleagues to assess the implications for investor engagement and proxy planning. The changes remain proposals.
Hong Kong launches consultation on sustainable finance taxonomy
On September 7, the Hong Kong Monetary Authority launched a public consultation on Phase 2B prototype of the Hong Kong Taxonomy for Sustainable Finance, a market-enabling tool for promoting informed decision-making in green and sustainable finance.
We’ll continue to keep an eye on these policies as they develop. Please reach out to our team with your questions about the latest sustainability regulations in any jurisdiction. We’re happy to help.
