Developments in ESG governance & transition - 2025

Previous updates

• June

  EC publishes assessment of national energy and climate plans

  On 28 May, the EC published its assessment of the National Energy and Climate Plans (NECPs) of EU Member States. Assuming full implementation of existing and additional policies and measures, the EU will near its 55% emission reduction target for 2030 with a projected EU-wide emissions reduction of 54% by 2030, compared to 1990 levels. The share of renewable energy has reached 42.5%. The assessment also flags improvement points for NECPs. The annex breaks down individual Member States’ GHG emissions data and their contributions to the EU targets.

  Council and EP adopt positions on CBAM simplification proposal

  On 27 May, the Council of the EU adopted its position on the European Commission (EC) proposal to simplify the EU Carbon Border Adjustment Mechanism (CBAM) under the Sustainability Omnibus. The proposal aims to reduce administrative burdens for SMEs and occasional importers. It proposes a de minimis mass threshold of 50 tonnes CO2, exempting 90% of the current importers while maintaining coverage of 99% of emissions. The European Parliament adopted its position on 22 May. Interinstitutional negotiations can now begin to reach a final deal on the proposal.

  Council adopts amendment of CO2 standards for new passenger cars and vans

  On 27 May, the Council adopted an amendment to the Regulation on CO2 standards for new passenger cars and vans. It provides car manufacturers with more flexibility to meet their mandatory CO2 emissions targets for 2025 for new passenger cars and light commercial vehicles in the calendar years 2025 to 2027. The amendment will now be published in the Official Journal of the EU. After 20 days following publication, it will enter into force.

  WMO publishes global climate update 2025-2029

  On 26 May, the World Meteorological Organization (WMO) published the Global Annual Decadal Climate Update. The report finds an 80% chance that at least one of the next five years will exceed 2024 as the warmest year on record. The chance that the average warming in 2025-2029 will be more than 1.5 °C is forecasted at 70%. The decade-long warming average will does remain below 1.5 °C. Precipitations patterns are found to have major regional variations, and arctic warming is forecasted to continue to exceed the global average.

  EC adopts decision on contribution of EU oil and gas producers to CO2 storage solutions

  On 21 and 22 May, the EC adopted a Delegated Regulation and a decision specifying the calculation methods, reporting requirements and individual contributions for EU oil and gas producers to CO₂ storage solutions under the Net Zero Industry Act. 44 oil and gas companies are required to contribute to an annual CO2 injection capacity of 50 million tonnes, using geological storage sites such as depleted gas fields and saline reservoirs. The Delegated Regulation is still subject to a two months’ objection period by the EP and the Council.

  Commission proposes Omnibus IV for SMEs and small mid-cap companies

  On 21 May, the EC published proposals to reduce regulatory burdens for Small and Medium Enterprises (SMEs) and for small mid-cap companies (SMCs). SMCs are being proposed as a new concept under EU law, being non-SME companies that have fewer than 750 employees, and that have either a net annual turnover less than EUR 150 million or an annual balance sheet total less than EUR 129 million (see the EC recommendation). On ESG, Omnibus IV proposes to exempt SMEs and SMCs from the due diligence requirements of the Batteries Regulation. It also proposes to postpone its due diligence requirements for companies that place batteries on the market or put them into service from 18 August 2025 to 18 August 2027. The publication of EC guidelines would be postponed from 18 February 2025 to 26 July 2026. Additionally, Omnibus IV also proposes to exempt SMEs and SMCs from most obligations under the Regulation on fluorinated greenhouse gases. Omnibus IV contains several other proposals to alleviate burdens for SMEs and SMCs.

  Commission awards EUR 1 billion to renewable hydrogen projects

  On May 20, the European Commission awarded EUR 992 million to 15 renewable hydrogen projects in the EEA. The projects cover sectors such as transport, chemicals, and ammonia and methanol production. Funded through the Innovation Fund, sourced from the EU Emissions Trading System (ETS), these projects will receive subsidies to help close the gap between production costs and market prices. They aim to produce 2.2 million tonnes of renewable hydrogen over ten years, avoiding 15 million tonnes of CO2 emissions. Grant agreements are expected to be signed by September or October 2025, with production of renewable hydrogen starting within five years. A third auction with a budget of EUR 1 billion is planned for the end of 2025.

  EU and UK to link emission trading systems

  On 19 May, the European Union and United Kingdom published a common understanding, agreeing to work towards linking their respective Emissions Trading Systems (ETS) (see also a Q&A). The EU and UK recognise that a functioning carbon market link could support level playing field objectives and facilitate mutual exemptions under their respective Carbon Border Adjustment Mechanisms (CBAM). The agreement will include sectors such as electricity generation, industrial heat, industry, maritime transport, and aviation. It will be supported by a joint governance structure, dispute resolution mechanism, and provisions for financial contributions.

  Council adopts first international convention on protection of the environment through criminal law

  On 14 May, the European Council adopted the Convention on the Protection of the Environment through Criminal Law (referred to as the ‘Ecocide Treaty’). It sets minimum EU standards for defining and prosecuting serious environmental crimes, including illegal pollution, destruction of ecosystems, and trafficking of hazardous waste. The treaty introduces stricter penalties for ‘particularly serious offences’, including fines, bans on business activity, and mandatory environmental restoration. Member States must still sign the treaty for it to become binding, but it marks a step toward stronger environmental accountability. The treaty broadly aligns with the revised Environmental Crime Directive, adopted on 11 April 2024, which already applies in the EU. In parallel, the Council also adopted a long-term strategy linking environmental protection with human rights, democratic governance, and the rule of law.

  ECB publishes opinion on sustainability Omnibus

  On 8 May, the European Central Bank (ECB) published an opinion on the sustainability Omnibus package. Regarding the proposed limitation of the CSRD scope, the ECB warns that the lack of sustainability-related data could obscure climate-related financial risks and may hinder the objectives of the EU sustainable finance framework. ESG risks are not necessarily proportionate to institutions’ size. At least all significant institutions, regardless of their number of employees, should remain subject to sustainability reporting requirements. Certain reporting obligations for companies with more than 500 employees, and reporting obligations for all third-country companies, should be maintained. Concerning the CSDDD climate transition plan, the ECB recommends maintaining that such plans must be ‘put into effect’. Climate transition plans are vital to address economic transition risks, to prudential supervision and to financial stability. The ECB suggests retaining the CSDDD’s review clause for the financial sector, while extending the review timeline. The Annex of the opinion contains detailed proposals for the Omnibus legal texts.

  Legal scholars publish opinion on Omnibus proposal regarding CSDDD climate plan
  On 8 May, a group of legal scholars published a letter criticising the Omnibus proposal on the mandatory climate transition plan under the Corporate Sustainability Due Diligence Directive (CSDDD). The EC proposal would remove the obligation for companies to ‘put into effect’ the climate transition plan. According to the legal scholars, this amendment could create legal uncertainty, increase future costs for companies, and increase the risk of climate-related litigation. They call on the EP to carefully consider these risks in its decision-making.

  TNFD publishes questions for board members on nature-related risks

  On 6 May, the Taskforce on Nature-related Financial Disclosures (TNFD) published twelve questions that board members can ask in their company to better understand the nature-related dependencies, impacts, risks and opportunities relevant for their company. The questions address (i) an overview of the relevance of nature for the business; (ii) integrating nature into decision-making; (iii) understanding the external context (market, standards, regulations, investor expectations); (iv) internal competence on nature-related issues; and (v) board reflection. TNFD will release guides for other audiences over the next year.

  OHCHR publishes opinion on sustainability Omnibus

  On 3 May, the Office of the United Nations High Commissioner for Human Rights (OHCHR) published an opinion on the sustainability Omnibus package. The OHCHR raises concerns over proposed changes to the CSDDD, highlighting that the proposals are not aligned with existing ESG due diligence frameworks and could weaken corporate accountability. It criticises proposals to narrow corporate due diligence obligations and scale back the civil liability regime as this could damage global efforts to establish robust, mandatory human rights and environmental due diligence standards.

  ESMA consults on draft RTS under ESG Rating Regulation

  On 2 May 2025, ESMA published a consultation paper on draft Regulatory Technical Standards (RTS) under the upcoming ESG Rating Regulation. The proposals focus on three key areas: (1) the information ESG rating providers must submit when applying for authorisation, (2) measures to prevent conflicts of interest where providers also engage in other activities, and (3) transparency obligations towards the public, rated entities, and users of ESG ratings. The consultation is open until 20 June 2025. A final report is expected in October, after which the draft RTS will be submitted to the European Commission.

  VCMI issues code of practice for Scope 3 emissions offsetting

  On 30 April, the Voluntary Carbon Markets Integrity Initiative (VCMI) released its long-awaited “Scope 3 Action Code of Practice” to guide companies in responsibly offsetting their Scope 3 emissions. The Code provides a structured framework to help firms identify their Scope 3 emissions gap and outlines how to report challenges and progress. The Code requires companies to treat carbon credits as a temporary supplement (not as a substitute) for actual decarbonisation, and only to use high-quality credits meeting VCMI criteria. The Code sets 2040 as the target year to close the Scope 3 gap in line with net-zero goals and imposes disclosure obligations to ensure transparency. In a time of market uncertainty, the Code represents a key step toward restoring credibility and consistency in corporate climate action.

• May

  Omnibus stop-the-clock directive published in Official Journal

  On 16 April, the stop-the-clock directive under Omnibus was published in the EU Official Journal. It entered into force on 17 April. The stop-the-clock directive postpones certain application dates of the CSRD as well as implementation and application dates of the CSDDD. The substantive proposal under Omnibus is still pending (see below). For further details, read our update and the March 2025 edition of ESG Matters.

  Council publishes draft position on Omnibus substantive proposal

  On 16 April, the Council of the EU published its draft position on the substantive Omnibus proposal. The draft position aligns with the key amendments put forward in the EC proposal. Among other points, it supports limiting the scope of CSRD to companies with more than 1,000 employees and introducing optional reporting under the Taxonomy Regulation. It also proposes to clarify the term ‘plausible information’ which defines the scope of due diligence obligations under CSDDD. Member States must now provide their input on the draft proposal to the Presidency of the Council. The Council will then agree on its final position on the substantive Omnibus proposal. For further details, read our update and the March 2025 edition of ESG Matters.

  EC launches consultation on Industrial Decarbonisation Accelerator Act

  On 16 April, the EC launched a public consultation on the Industrial Decarbonisation Accelerator Act, a part of the wider Clean Industrial Deal. The Act will aim to increase sustainable industrial production in the EU’s energy-intensive sectors by speeding up permitting procedures, promoting priority industrial decarbonisation projects and clusters, and creating lead markets for low-carbon EU products. This could include sustainability requirements in public and private procurement and the introduction of a low-carbon EU label. The Act will focus on energy-intensive industries (chemicals, steel, pulp and paper, refineries, cement, non-ferrous metals, glass and ceramics) and will consider related downstream industries where relevant. The Act is expected to be adopted by the Commission in Q4 2025. The consultation is open until 8 July.

  EC publishes working plan 2025-2030 on Ecodesign and Energy Labelling Regulations

  On 16 April, the EC published its working plan 2025-2030 for the Ecodesign for Sustainable Products Regulation and the Energy Labelling Framework Regulation. The plan proposes to include the following product groups in the Ecodesign Regulation: (i) textiles/apparel (by 2027); furniture (by 2028); tyres (by 2027); mattresses (by 2029); iron and steel (by 2026); aluminium (by 2027). In terms of horizontal requirements, the working plan focuses on reparability, including scoring, as well as recycled content and recyclability of electrical and electronic equipment. Further details are set out in the Staff Working Document.

  EC publishes guidance and initiates public consultation on EU Deforestation Regulation

  On 15 April, the EC published an updated guidance document and updated FAQs for the EU Deforestation Regulation. Among other changes, the number of required due diligence statements is reduced and the due diligence requirements for large downstream companies are simplified. The EC also launched a public consultation on its proposal for a Delegated Act. The proposal would exclude specific types of products from the scope of the Regulation by amending the ‘list of relevant commodities and relevant products’ (Annex I) of the EU Deforestation Regulation. The public consultation is open until 13 May 2025. The EC is still working on a country benchmarking system, which is expected to be adopted before 30 June 2025 following discussions with the Member States.

  WMO and EU publish European State of the Climate 2024

  On 15 April, the World Meteorological Organization (WMO) and the EU published the European State of the Climate 2024 along with an executive summary. The report finds that 2024 and the period 2014-2024 were respectively the warmest year and decade on record. Since the 1980s, Europe has been the fastest-warming continent on Earth, heating at twice the rate of the global average. Southern Europe is confronted with widespread droughts and European glaciers continue to melt. Extreme weather events present increasing risks to Europe’s built environment, infrastructure, and the services they support, as Europe is one of the regions with the largest projected increase in flood risk.

  PSF proposes new technical screening criteria under Taxonomy Regulation

  On 1 April, the EU Platform on Sustainable Finance published a report reviewing the Climate Delegated Act of the EU Taxonomy Regulation. The report proposes new technical screening criteria (TSC) for a list of new economic activities. Key recommendations include:

  • enhancing usability of existing criteria by refining technical definitions and reducing complexity;
  • updating the Climate Delegated Act to reflect the latest science, technologies, and market practices, particularly in energy-related sectors;
  • including new activities such as mining, smelting and refining, close-to-market research, digital services, and a broad range of climate change adaptation actions.

  These updates aim to improve companies’ access to sustainable finance and better align capital flows with the EU’s climate objectives.

• April

  Omnibus – stop-the-clock

  In March, Omnibus and the proposed adjustments to CSRD, CSDDD and the Taxonomy Regulation continued to be core topics leading to the adoption of the ‘stop-the-clock’ amendment on 3 April by the European Parliament. This means that the application timelines for CSRD will be postponed by two years for companies first reporting on FY 2025 (wave 2 companies) or FY 2026 (wave 3 companies). The CSRD remains applicable to companies first reporting on FY 2024 (wave 1 companies). Implementation and application of CSDDD to wave 1 companies will be postponed by one year. The final legal text of the stop-the-clock proposal is expected to published soon. Attention can then shift to the substantive proposals on the scope and content of the CSRD, CSDDD and the Taxonomy Regulation.

  IEA publishes global energy review 2025

  On 24 March, the International Energy Agency (IEA) published its Global Energy Review 2025. Global energy demand increased by 2.2% in 2024, exceeding the 1.3% average increase between 2013 and 2023. All energy sources saw growth, including oil, natural gas, coal, renewables and nuclear power. Electricity demand increased by 4.3% due to higher demand for cooling, industry, transport, data centres and artificial intelligence. 80% of this increased demand was met by low-emission sources. Oil and coal consumption increased more slowly than in 2023. For the first time, oil’s market share fell below 30%. Renewable and nuclear sources accounted 40% of total energy generation. Energy sector CO2 emissions increased by 0.8% in 2024, compared to 1.2% in 2023.

  PSF publishes sustainable finance standard for SMEs

  On 21 March, the Platform on Sustainable Finance (PSF) published a report introducing a ‘SME sustainable finance standard’. This is a voluntary framework for banks and financial institutions to classify loans (and other types of financing) to SMEs as sustainable finance. It is limited to climate mitigation and adaptation, but aims to be expanded to other environmental objectives. The standard aims to address the problem that SMEs have reduced access to green finance in practice. The standard contains proposals (i) to simplify the sustainability criteria for SME’s activities derived from the Taxonomy Regulation; (ii) to introduce enterprise-level criteria; (iii) to introduce investment-level criteria for investments not yet in scope of the Taxonomy Regulation. As minimum safeguards, SMEs would have to (i) comply with applicable laws; (ii) not finance, fall under, or provide dedicated services to excluded sectors or activities under the EU Paris-Aligned Benchmarks Regulation; (iii) report based on the VSME reporting standard to be developed by the European Commission under the Omnibus proposal.

  SBTi launches public consultation on revised Corporate Net-Zero Standard

  On 18 March, the Science Based Targets initiative (SBTi) published a draft of the revised Corporate Net-Zero Standard for public consultation. This updated proposal introduces significant changes to the March 2024 version, which remains the only global framework for corporate net-zero target setting aligned with climate science. Key proposed revisions include: (1) a stronger focus on scope 3 emissions, encouraging companies to prioritise direct suppliers and emissions-intensive sectors in their reduction strategies; (2) new requirements for assessing and communicating progress against targets to improve transparency and accountability; and (3) simplified and tailored requirements for medium-sized companies in developing markets and for SMEs, recognising varying capabilities. The consultation is open to 1 June 2025.

  PSF publishes report on green capital flows

  On 11 March, the PSF introduced a new framework to track sustainable investment flows in the EU. The report, based on EU Taxonomy data, highlights the following:

  • Taxonomy-aligned capital expenditure reached EUR 250 billion in 2023, a 34% increase year-on-year.
  • Transition-related investments are emerging, with an additional EUR 206 billion potentially contributing to sustainability goals.
  • Green bonds and loans dominate financing, with outstanding green debt at EUR 1.69 trillion.
  • Progress towards sustainable transition varies significantly across sectors.

  EC publishes roadmap for women’s rights and 2025 Gender Equality Report

  On 7 March, ahead of International Women's Day, the EC presented its Roadmap for Women’s Rights and the 2025 Report on Gender Equality, outlining a long-term vision to advance gender equality in the EU. This document outlines a long-term vision to advance gender equality in the EU, building on progress made under the 2020–2025 Gender Equality Strategy. Priorities include combating gender-based violence, ensuring equal pay, supporting work-life balance, and promoting women’s representation in leadership. Despite progress, challenges such as pay gaps and high levels of violence against women persist. The Commission urges all EU institutions and Member States to help turn this roadmap into action.

• March

  EC publishes Omnibus package: CSRD, CSDDD and Taxonomy reporting

  On 26 February, the EC published the Omnibus Package, including proposals to significantly scale down EU corporate sustainability reporting requirements (CSRD), due diligence obligations (CSDDD), and sustainable finance rules (EU Taxonomy). Additionally, the EC released a working document outlining the next steps and implementation timelines for sustainability reporting and due diligence obligations, as well as a working document detailing the simplifications of CBAM. The package also includes a Q&A, providing an overview of the proposed measures and expected impacts. For a detailed overview of the proposed changes, refer to our Highlight section.

  EC publishes Omnibus package: consultation on Taxonomy Delegated Acts

  On 26 February, the EC published a Call for Evidence for its proposed Omnibus amendments to three Delegated Acts (DAs) under the EU Taxonomy Regulation: the Disclosures DA, Climate DA, and Environmental DA. The consultation is open until 26 March 2025. The Omnibus proposals relating to CSRD and CSDDD are not open for public consultation. Feedback will be considered before finalising the EC’s proposals for the Taxonomy DAs. The EC’s final approval of the proposals is expected in Q2 2025.

  EC publishes Omnibus package: CBAM
  On 26 February, the EC published the Omnibus Package, including proposals to significantly scale down and simplify the EU carbon border adjustment rules (CBAM and annexes), and to strengthen InvestEU. The existing CBAM puts a price on the carbon emitted during the production of carbon intensive goods imported into the EU. It aims to encourage cleaner industrial production in non-EU countries and create a level playing field. Omnibus proposes to scale down and simplify CBAM. For instance, CBAM’s application threshold of goods whose individual value per consignment is below EUR 150, would be changed to exclude importers for whom the net mass of imported CBAM goods does not exceed 50 net tons per year. The EC estimates that this would exclude 90% of importers, while 99% of emissions would remain in scope.

  EC publishes Omnibus package: Clean Industrial Deal and InvestEU

  On 26 February, the EC published the Omnibus Package, including the Clean Industrial Deal. The EC proposes to (i) adopt a new Clean Industrial Deal State Aid Framework to accelerate the approval of state aid for renewable energy, decarbonise industry and ensure sufficient manufacturing capacity of clean tech; (ii) strengthen the Innovation Fund and propose an Industrial Decarbonisation Bank, aiming for EUR 100 billion in funding; (iii) launch a call under Horizon Europe to stimulate research and innovation in these areas; (iv) amend the InvestEU Regulation, including through EFSI, funds from past investments, and legacy instruments, to increase the amount of InvestEU financial guarantees to support clean investments, mobilising up to EUR 50 billion for the deployment of clean tech, clean mobility and waste reduction. Member States should have fewer barriers to support businesses and mobilise private investments. Administrative requirements would be simplified, notably for SMEs.

  ESMA publishes technical standards on Green Bonds Regulation

  On 14 February, The European Securities and Markets Authority (ESMA) published its final report on the technical standards for the Green Bonds Regulation. After public consultation, ESMA revised the draft Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) based on stakeholder feedback. The final draft RTS and ITS have now been submitted to the EC for adoption, pending non-objection from the EP and Council. These standards will apply to ESMA-registered external reviewers starting 21 June 2026, with ‘best efforts’ compliance being expected during the transitional period.

  EC publishes working programme 2025

  On 11 February, the European Commission (EC) published its working programme 2025, detailing key strategies, action plans and legislative initiatives for the first year of its five-year mandate. In line with earlier communications, the focus is on implementing regulations, reducing regulatory burdens, and simplifying regulations. The EC will publish five omnibus proposals in 2025. In Q1 2025, it will publish the ‘First Omnibus package on sustainability’, the ‘Second Omnibus package on investment simplification’, the Clean Industrial Deal (all published on 26 February), the Action plan on affordable energy, and the European Climate Law amendment. In Q3 2025, the EC will release the ‘Third Omnibus package, including on small mid-caps and removal of paper requirements and the Sustainable Transport Investment Plan. In Q4 2025, it will publish the proposal for a revised SFDR and the Industrial Decarbonisation Accelerator Act. See the annex for the full agenda and pending proposals.

  ACM publishes focus areas for 2025 including sustainability

  On 5 February, the Dutch Authority for Consumers and Markets (ACM) published its 2025 focus areas (see also the English version). On sustainability, ACM aims to (i) curb greenwashing, particularly in the food sector; (ii) guide businesses on sustainability cooperation within competition rules; (iii) agricultural and nutrition sector collaborations and sustainability certification labels for the agricultural sector; and (iv) prepare for enforcement of the CSDDD. On the energy transition, ACM aims to (i) promote flexible grid use to reduce congestion; (ii) develop a feed-in tariff for fair cost distribution; (iii) educate stakeholders about opportunities arising from the new Dutch Energy Act; and (iv) design a regulatory framework for gas and electricity system operators post-2027.

  EU study finds mixed progress on EU Green Deal

  Five years after its launch, the European Green Deal has made significant strides, yet challenges remain, according to a JRC study published on 30 January. This comprehensive study covers 154 targets in climate, energy, circular economy, mobility, agriculture, biodiversity, and pollution. the study finds 32 targets are on track, 64 requiring acceleration, and 15 showing no progress or regression. Key successes include steady reductions in greenhouse gas emissions and progress in recycling and clean energy. However, renewable energy expansion, biodiversity protection, and data monitoring need faster action, with 28% of targets lacking sufficient data. Full implementation at the Member State level and systemic shifts across sectors are essential to meet the ambitious 2030 and 2050 goals.

• February

  EC publishes a competitiveness compass

  On 29 January, the European Commission (EC) published the ‘Competitiveness Compass’, which serves to translate the Draghi report’s recommendations to increase the EU’s competitiveness into actionable steps. It focuses on innovative technologies, sustainable production, and achieving a climate-neutral economy. It states that the omnibus proposal for the EU Taxonomy, CSDDD, and CSRD is expected on 26 February and will involve ‘far-reaching simplification’, in line with the broader goal to reduce 25% of recurring administrative burdens for all corporates and 35% for SMEs. The EC will focus on:

  1. Proportionate timelines.
  2. Tight data alignment.
  3. Focus on most harmful activities.
  4. New category of ‘small mid-caps’ (between SMEs and larger firms) who will benefit from regulatory simplifications.

  See also EC President Von der Leyen’s statement on the compass.

  Packaging and Packaging Waste Regulation published in the Official Journal

  On 22 January 2025, the Regulation on packaging and packaging waste was published in the Official Journal of the EU. It aims to reduce the generation of packaging waste by setting binding re-use targets, restricting certain types of single-use packaging and requiring economic operators to minimise the packaging used. It covers the full life cycle of packaging. It will apply from 12 August 2026.

  PSF publishes draft report and consultation on Taxonomy technical screening criteria

  On 8 January, the Platform on Sustainable Finance (PSF) released a draft report on the revision and addition of review of technical screening criteria (TSC) under the EU Taxonomy Regulation. The proposed new TSC cover the economic activities of refining, mining, close-to-market research, development and innovation, and digital services. Stakeholders are invited to provide input via the call for feedback, including on the usability of the current TSC and Do No Significant Harm criteria, as well as the TSC proposed in the report and the prioritisation of forthcoming TSC. The call for feedback is open until 5 February 2025.

  Gender balance on corporate boards applicable

  On 3 January, the Gender Balance on Corporate Boards Directive to improve gender balance started to apply. By 30 June 2026, members of the underrepresented sex must hold at least 40% of non-executive director positions or 33% of all director positions on boards of large EU-listed companies. The Directive also aims to improve the transparency of appointment processes. For instance, candidates for director positions can request the specific qualification criteria and the objective comparative assessment applied in the selection process.

• January

  ISSB publishes guide on climate only IFRS disclosures

  On 30 January, the International Sustainability Standards Board (ISSB) released a guide ‘Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2’. This guide is designed to help companies report only climate-related information, when applicable, using the ISSB Standards. It specifies which IFRS S1 should be reported on when companies apply the ISSB’s climate-first transition relief. The guide addresses investors’ feedback, highlighting the urgent need for climate-related information and the challenges in data availability and companies’ readiness for other sustainability-related risks and opportunities.

  Dutch Ministry of Economic Affairs publishes ESRS navigator 2025

  On 25 January, the Dutch Ministry of Economic Affairs and Climate (EZK) published the ESRS Navigator 2025. The navigator aims to help companies reporting under the CSRD’s European Sustainability Reporting Standards (ESRS). It provides insights into the context and structure of the ESRS, practical guidance, and a case study. The Ministry also released an Excel overview of datapoints to be collected for ESRS reporting.

  TNFD publishes sectoral guidance on nature disclosures

  On 23 January, the Taskforce on Nature-related Financial Disclosures (TNFD) published sectoral guidance for four industries:

  1. apparel, accessories and footwear
  2. beverages
  3. construction materials
  4. engineering, construction and real estate

  This guidance aims to help organisations to identify, assess and report on their nature-related dependencies, impacts, risks and opportunities. It the TNFD’s principal Guidance on the assessment of nature-related risks. TNFD also initiated consultations on new sectoral guidance for:

  1. fishing
  2. marine transportation and cruise lines
  3. water utilities and services

  These consultations are open until 3 April 2025.

  EC and EFRAG publish paper on ESRS and EMAS synergies

  On 16 January, the EC and EFRAG published a joint paper on the synergies between the ESRS and the voluntary Eco-Management and Audit Scheme (EMAS) framework. This paper aims to streamline sustainability reporting for companies already reporting under EMAS, by providing a detailed overview of overlapping disclosures. It allows for incorporation by reference of companies’ EMAS disclosures in their ESRS disclosures under the CSRD.

  Dutch CSRD implementation act submitted to House of Representatives

  On 13 January, Dutch Parliament submitted the proposal for the Dutch CSRD Implementation Act to the House of Representatives. This proposal includes the explanatory memorandum, the advice of the Council of State, and the Minister’s further report. The act implements the CSRD’s rules on accountants and accounting firms, and the general availability of sustainability reporting by listed companies. The specific sustainability reporting obligations for companies (ESRS) will be detailed in a separate Order in Council (AMvB) based on Book 2 of the Dutch Civil Code (Implementatiebesluit richtlijn duurzaamheidsrapportering). Key aspects of the proposed implementation act include:

  The exact date of entry into force remains unknown, while the directive was supposed to be transposed into national legislation by 6 July 2024.

• ESG governance & transition updates in 2024

  See our overview of ESG governance & transition updates in 2024