Practice News:
An Alert discussing developments relating to California’s climate reporting law SB 253 was published on July 22.
Americas
CARB Advances Climate Disclosure Rules and Extends SB 253 Deadline
On July 21, CARB hosted a public workshop to clarify the near-term implementation path for SB 253, focusing on reporting deadlines, phased Scope 3 reporting, insurance-company treatment, and assurance. During the workshop, CARB introduced a new initial reporting deadline of November 10, 2026 for Scope 1 and Scope 2 emissions reporting, and discussed phased-in Scope 3 reporting beginning in 2027. CARB also signaled that future rules will rely heavily on the GHG Protocol, including disclosures on methodology, boundaries, emissions factors, data sources, and global warming potential values, and previewed expected future application of the climate reporting laws to insurance companies. The modified initial regulations were published on July 27. Please see our client alert for more information and details.
DHS Announces Largest-Ever Expansion of UFLPA Entity List
On July 31, the Department of Homeland Security (DHS), on behalf of the Forced Labor Enforcement Task Force, announced the addition of 43 companies to the Uyghur Forced Labor Prevention Act (UFLPA) representing a 30% increase in the number of entities covered, and the largest single expansion of the list to date. The additions include companies in high-priority enforcement sectors such as aluminum, apparel, copper, cotton, tomatoes and downstream products, with trade commentary also noting that the expanded list appears to include several pharmaceutical companies. The revised list was published in the Federal Register on August 3, and now U.S. Customs and Border Protection will apply the UFLPA rebuttable presumption to goods produced by newly listed entities.
Texas Files Lawsuit Against Glass Lewis Over Alleged ESG and DEI Bias
On July 29, Texas Attorney General Ken Paxton sued Glass Lewis in the Texas District Court for Collin County, alleging deceptive trade practices based on proxy voting advice that the state says was advertised as objective but was influenced by ESG and DEI considerations. The complaint alleges that Glass Lewis incorporated ESG and DEI-related materials into advisory services while marketing itself as objective, and points to Glass Lewis proxy voting guidance regarding risks companies face from poor environmental and social practices. AG Paxton also seeks an injunction requiring clear and conspicuous notice when Glass Lewis provides proxy advisory services focused on ESG initiatives. The suit follows a similar complaint filed against proxy advisor ISS on May 20, 2026, and a law passed in 2025, which is subject to legal challenge by the two proxy advisory firms.
EEOC Moves to Rescind EEO-1 and Related Workforce Reporting
On July 21, the EEOC voted to rescind the requirement for employers and other covered entities to file annual EEO Data Reports, including EEO-1 through EEO-6 reports, summarizing aggregate employee race and sex data. The proposal would also rescind related recordkeeping requirements tied to those reports. EEOC Chair Andrea Lucas stated that the proposal is consistent with Title VII and Supreme Court precedent, framing the rescission as reinforcing equal treatment under the law. The agency noted that the proposal remains subject to Administrative Procedure Act requirements, including public comment and review of relevant data before any final determination. Comments may be submitted through regulations.gov for 30 days after Federal Register publication, and the EEOC held a public hearing on August 11 to gather information and hear public comments on the decision.
Pennsylvania Data Centers Face Increased Oversight Under New Law
On July 12, Pennsylvania Governor Josh Shapiro signed a budget requiring data centers to report their exact water and power usage annually to the state. The budget also requires PJM Interconnection—a regional transmission organization operating the electric grid for Pennsylvania—to provide Pennsylvania regulators with additional insight into demand forecasting, with House Bill 1924 stating that the current utility-to-PJM forecasting process lacks transparency for policymakers, regulators and stakeholders. The legislation gives the Pennsylvania Public Utility Commission authority to review and validate load forecasts submitted by Pennsylvania utilities to PJM, coordinate with PJM and other regulators to improve accuracy and avoid duplicative counting, and access relevant materials needed for oversight. The measure links data center oversight to broader concerns about grid planning and large-load forecasting as data center development accelerates. For data center operators and developers, the law signals increased state attention to energy and water usage as part of infrastructure planning. On August 6, Pennsylvania State Representative Joe Webster proposed a bill that would require all data centers in the state to report their water and electricity usage.
Chile Recognizes Climate Action Reserve Under Green Tax Emissions Offset System
On July 27, Chile’s Ministry of the Environment issued Exempt Resolution No. 3,515, granting partial recognition to the Climate Action Reserve (CAR) external certification program under Supreme Decree No. 4, 2023 for purposes of Chile’s Green Tax Emissions Compensation System. Regulated industrial emitters can now leverage eligible, high-integrity carbon credits certified by the CAR to offset up to 100% of their national carbon tax obligations. The resolution also incorporates safeguards to ensure environmental integrity, excluding certain renewable electricity projects and limiting eligible emissions reductions to the first 21 years for non-agriculture, forestry and other land use projects. A public consultation is open until September 8.
Information provided by contributing law firm: Cuatrecasas
Mexico Prohibits Mining in Federally Protected Natural Areas
On July 20, Mexico’s Environmental and Natural Resources Ministry published a binding agreement prohibiting all mining exploration and extraction inside federally protected natural areas, effective immediately. The rule eliminates the longstanding assumption that a mining concession grants an automatic right to operate. Companies must now secure a separate environmental impact authorization before any activity begins. Critically, the Supreme Court backed the retroactive reach of the measure on July 3, ruling that older concessions do not create a protected right to production. The national parks regulator gains binding veto power over any environmental review covering protected zones, including projects sited just outside parks’ boundaries.
Information provided by contributing law firm: Cuatrecasas
EU/U.K.
EU Packaging and Packaging Waste Regulation (PPWR) Begins to Apply
On August 12, Regulation (EU) 2025/40 on packaging and packaging waste (PPWR) will begin to apply across all EU Member States, replacing the former Packaging and Packaging Waste Directive 94/62/EC. The PPWR applies directly without the need for national transposition, and covers all packaging regardless of material. Key obligations applying from August 12 include packaging minimization requirements; a prohibition on PFAS in food-contact packaging above specified concentration limits; a maximum 40% empty space ratio for e-commerce packaging; a requirement for manufacturers to issue an EU declaration of conformity; and extended producer responsibility (EPR) registration obligations. Further requirements, including mandatory recyclability grades and recycled content targets, will phase in from 2030.
EU Commission Publishes Proposal for the Revised EU ETS
On July 17, the European Commission published its proposal for a revised EU Emissions Trading System (ETS), seeking to align with 2040 climate targets under the European Climate Law. Key elements include extending the carbon leakage framework and free allocation for non-CBAM sectors until 2038; slowing the phase-out of free allocation for CBAM sectors; partially extending aviation ETS coverage to certain outbound flights within 5,000 km; ring-fencing up to 260 million allowances for high-quality international credits between 2036 and 2040; and introducing targeted simplifications to reduce administrative burden. The Council and Parliament are targeting political agreement by Q1 2027.
EU Deforestation Regulation: Commission Adopts Delegated Act
On July 13, the European Commission adopted two measures to support implementation of the EU Deforestation Regulation (EUDR) ahead of its application beginning at the end of December 2026. The Delegated Act updates Annex I of the EUDR, removing cattle hides, skins and leather, retreaded tires, soybeans for sowing, articles of vulcanized rubber, conveyor and transmission belts, and aircraft and motor vehicle seats from scope. It also clarifies that waste, second-hand products, samples, and certain packing materials are excluded. Newly added products will become subject to the Regulation from December 2027. The Implementing Act establishes the technical rules for the EUDR Information System for submitting due diligence statements and simplified declarations. Both measures form part of the simplification package presented in May 2026.
EFRAG Publishes Consultation on Sustainability Reporting for Non-EU Companies
On July 23, EFRAG launched a 100-day public consultation on the Exposure Draft for the European Sustainability Reporting Standard applicable to certain non-EU undertakings under Article 40a of the Accounting Directive (ESRS-40a ED). The standard applies to non-EU parent companies with EU net turnover exceeding €450 million for two consecutive years and an EU subsidiary or branch exceeding €200 million in net turnover. Importantly, ESRS-40a does not require a full double materiality assessment, and adopts an impacts-only standard for disclosure. The Exposure Draft follows the architecture of the revised ESRS, comprising two cross-cutting and ten topical standards. EFRAG estimates approximately 1,200 non-EU companies will be in scope. The deadline for comments is October 31, with EFRAG due to deliver technical advice to the Commission in January 2027. First reports will cover financial year 2028, with publication in 2029.
U.K. Government Proposes Mandatory Disclosures for Modern Slavery Reform
On June 30, the U.K. Government introduced the Immigration and Asylum Bill, which proposes significant amendments to the Modern Slavery Act 2015. The Bill would make the content of modern slavery statements mandatory, requiring in-scope entities to address risk assessment, policies, due diligence processes, training, and effectiveness. It introduces director-level accuracy declarations, strict publication deadlines, and a new financial penalties regime of up to 1% of turnover for non-compliance. Reporting obligations would also extend to certain public authorities. The Bill is still in the early stages of the parliamentary process, having received its second reading on July 13, and is now at the Committee stage. If adopted, it is expected to take effect from the 2027 reporting year.
Spain’s Ministry Issues Guidance on Definition of “Producer” Under EU Packaging Regulation
On July 27, Spain’s Ministry for Ecological Transition issued guidance clarifying which companies count as “producers” of packaging and must register in Spain's Product Producer Register, ahead of EU packaging waste rules taking effect on August 12, 2026 (Regulation 2025/40/EU). The guidance specifies when manufacturers, importers, distributors, and online platforms trigger this registration duty, helping companies confirm their compliance obligations and avoid penalties under Spain’s environmental rules.
Information provided by contributing law firm: Cuatrecasas
Belgium Implements CRD VI, Strengthening Sustainability Risk Requirements for Banks
On August 7, the Belgian Official Gazette published the Belgian law implementing the Capital Requirement Directive VI (CRD VI), which strengthens the integration of sustainability risks into the prudential framework applicable to credit institutions. Banks will be required to incorporate these risks into their governance arrangements, risk management frameworks, and strategic decision-making processes, taking into account short-, medium-, and long-term sustainability-related financial risks. A key change is the requirement for management bodies to adopt dedicated prudential transition plans, setting out quantifiable targets and processes to identify, monitor, and address sustainability risks, including risks arising from the transition toward a sustainable economy. The law also introduces strengthened governance and fit-and-proper requirements, a harmonized EU framework for the supervisory review of certain material transactions, a new regime for third-country branches, and expanded supervisory and enforcement powers for the National Bank of Belgium. The sustainability-related requirements will enter into force on August 17, 2026.
Information provided by contributing law firm: Loyens & Loeff
APAC
South Korea Revises Stewardship Code After Ten Years
On July 24, South Korea’s Stewardship Code Development Committee finalized the first comprehensive revision of the Korean Stewardship Code since its introduction in 2016. The revised Code, which applies to participating institutions from January 1, 2027, expands its potential scope beyond Korean listed equities to include bonds, infrastructure, real estate, unlisted equities, and overseas assets. It also broadens stewardship responsibilities to cover financially material sustainability factors and considerations, as well as investment decisions that reflect the outcomes of engagement activities. The revision expressly recognizes collaborative engagement among institutional investors, strengthens the “comply or explain” framework by identifying circumstances in which exceptions may be justified, and formalizes periodic monitoring of individual signatories’ implementation. Participating institutions will also be required to submit annual stewardship activity reports. Further practical guidance, including on climate change considerations and recognition of equivalent overseas stewardship reports, is expected through subsequent guideline revisions.
Information provided by contributing law firm: Yoon & Yang
Australian Government Announces Proposed Criminal Penalty for Modern Slavery Failures in Supply Chains
On July 15, the Australian Government announced its intention to introduce a new criminal offense under the Modern Slavery Act 2018 for “failing to prevent modern slavery.” The proposed offense would apply to companies with annual consolidated revenue of more than $100 million that are found to have failed to prevent modern slavery in their supply chains, unless they can demonstrate that they took reasonable prevention steps. The offense is expected to be accompanied by civil penalties and enhanced enforcement powers for non-compliance with reporting obligations. The proposed reforms would represent the most significant expansion of Australia’s modern slavery regime since its introduction.
Information provided by contributing law firm: Mallesons
Australia’s Mandatory Climate-related Financial Disclosures Regime Comes Into Effect for Group 2 Entities
Beginning on July 1, Group 2 entities became subject to Australia’s mandatory climate-related financial disclosure regime. Group 2 entities include Australian companies that meet at least two of the following thresholds: consolidated annual revenue of AU$200 million or more, consolidated gross assets of AU$500 million or more, or 250 or more employees. Entities subject to the regime must prepare climate disclosures in accordance with AASB S2, Australia’s climate-related financial disclosure standard, extending the phased implementation of Australia’s sustainability reporting framework. These disclosures require entities to report on climate-related risks and opportunities, including governance processes, strategy, risk management, and metrics and targets relevant to their operations.
Information provided by contributing law firm: Mallesons
Standards and Associations
ISO Launches Public Consultation on First International Standard for Net Zero
On June 17, the International Organization for Standardization (ISO) launched a 12-week public consultation on the Net Zero Aligned Organizations Standard (ISO 14060)–the world’s first international, independently verifiable standard designed to support organizations in developing credible net zero transition plans. The draft standard was developed over two years by the ISO’s largest working group and provides global guidance for organizations navigating the transition to net zero. The consultation invites governments, businesses, researchers and civil society to submit comments through their national standards bodies, with national consensus positions due by early September 2026.
Contributing Law Firm Information
Cuatrecasas | Loyens & Loeff | Mallesons | Yoon & Yang LLC