Sustainability regulatory updates, the circular economy and the environment
Omnibus
EU Taxonomy
The European Commission has proposed a delegated act introducing major simplifications to EU Taxonomy reporting, aiming to ease the burden on both financial and non-financial companies. The act, currently under review by the European Parliament and Council, is expected to apply from January 1, 2026 (for the 2025 financial year), with an optional one-year deferral. These changes focus on reducing reporting obligations, refining materiality thresholds, and streamlining performance indicators to support more practical implementation of sustainability disclosures.
Key simplifications include:
- Exemption from reporting on activities that are financially non-material (below 10% of revenue, CapEx, or OpEx).
- Non-financial companies may skip alignment reporting for non-material OpEx.
- Financial companies may defer detailed KPI reporting (e.g. green asset ratio) for two years.
- Reporting templates significantly reduced: –64% data points for non-financial and –89% for financial firms.
- “Do no significant harm” criteria on pollution and chemicals have been simplified.
CSRD: Corporate Sustainability Reporting Directive
A new timeline has been set for the European Financial Reporting Advisory Group (EFRAG) following a letter from EU Commissioner Albuquerque. EFRAG must now submit its technical advice on revising and simplifying the European Sustainability Reporting Standards (ESRS) to the European Commission by 30 November 2025, extending the original deadline by one month. As a result, the public consultation on the Exposure Drafts will be extended to 60 days, from the end of July to the end of September 2025, and will be supported by outreach events in late September and early October. According to EFRAG’s Progress Report from 20 June 2025, the organisation is using six key levers to achieve over a 50% reduction in mandatory datapoints:
(1) Simplification of double materiality assessment
(2) Improved readability and integration of sustainability statements
(3) Revision of the link between minimum disclosures and topical standards
(4) enhanced clarity and accessibility,
(5) Implementation of additional burden-reduction reliefs
(6) enhanced Interoperability
On another note, Member states’ representatives in the Council of the European Union agreed on 23 June 2025 on the Council’s negotiating mandate to simplify the EU’s sustainability reporting and due diligence rules—specifically the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD)—as part of the Omnibus I package, with the aim of reducing reporting burdens and limiting obligations cascading down to smaller firms; under the Council’s position, CSRD would apply only to companies with over 1,000 employees and at least €450 million net turnover, while CSDDD would be extended to firms with more than 5,000 employees and €1.5 billion net turnover, and the due diligence framework would shift to a risk‑based model focused on tier‑1 suppliers, with the transposition deadline postponed accordingly
Commission invites feedback on future environmental legislation simplification
On 22 July 2025, the European Commission launched a Call for Evidence to gather feedback on how to make EU environmental legislation faster, easier, and cheaper to implement—particularly for businesses.
The initiative is part of an upcoming environmental omnibus proposal aimed at simplifying rules around the circular economy, industrial emissions, and waste management, while maintaining high environmental and health standards.
Stakeholders are invited to suggest ways to streamline reporting, reduce duplication, digitalise procedures, and ease permitting. The feedback window is open until 10 September via the Have Your Say portal.
This move aligns with the Competitiveness Compass target to reduce administrative burden by 25% for all companies and 35% for SMEs by 2029.
Batteries
The Council of the European Union has adopted a law that presents a “stop‑the‑clock” mechanism to delay key environmental due diligence obligations under the EU Battery Regulation (Regulation EU 2023/1542). This measure, part of the Commission’s Omnibus IV simplification package, defers the application of due diligence requirements from August 18 2025 to August 18 2027, giving battery manufacturers and exporters additional time to prepare, while also allowing more time to establish accredited third‑party verification bodies. The proposal further mandates that guidelines be published one year before enforcement and eases administrative burden by shifting from annual to triennial public reporting.
Ecodesign
Public Consultation for Initiative on Exemptions to the Prohibition of Destroying Unsold Apparel and Footwear. This initiative supports the implementation of the Ecodesign for Sustainable Products Regulation by specifying exemptions to the upcoming ban on destroying unsold clothing, accessories, and footwear. It outlines criteria under which unsold products may still be destroyed, such as for safety, hygiene, irreparable damage, legal or technical unsuitability, or lack of viable donation options.
The proposal may also include exemptions for items restricted by intellectual property or branding limitations, with stakeholder feedback helping to define these cases.
Consultation period: 30 June 2025 – 11 August 2025
Recent publications regarding sustainability regulatory updates, the circular economy, and the environment (non-exhaustive).
| Entity | Date | Publication |
| European Commission | 20/05/2025 | The EU has updated its official List of Waste (Decision 2000/532/EC) to reflect recent developments in battery technologies and recycling. It adds new waste codes and reclassifies battery-related waste to improve sorting, tracking, and environmental safety |
| Chile | 24/06/2025 | Chile’s Environment Ministry officially designated textiles as a “priority product” under its national Ley REP (Recycling and Producer Responsibility Law), allowing a decree to be drafted establishing collection, recovery, and management obligations for textiles. |
| European Commission | 25/06/2025 | The European Commission welcomed the release of new Product Environmental Footprint Category Rules (PEFCR) for apparel and footwear. Developed over five years with input from industry, NGOs, and public bodies, the rules offer a science-based, impartial method for assessing environmental impacts across the full product lifecycle—from raw materials to end-of-life.
The framework supports fair comparison across all materials and helps companies improve sustainability in design and production. It aligns with the EU’s Strategy for Sustainable and Circular Textiles and the Ecodesign for Sustainable Products Regulation, with future updates expected to address issues like microplastic shedding and biodiversity impacts. You can learn more here about the Product Environmental Footprint and here for the Apparel & Footwear PEFCR. |
| European Commission | 25/06/2025 | The European Commission has officially adopted a new State aid framework in support of the Clean Industrial Deal, known as the Clean Industry State Aid Framework (CISAF).
This new framework is designed to give Member States greater flexibility and clarity when providing public support for projects that accelerate the EU’s transition toward a low-carbon economy. Key focus areas include:
CISAF aims to align national funding with EU climate goals while ensuring a level playing field across the internal market. It builds on the Green Deal Industrial Plan by removing bottlenecks and offering targeted, time-bound support where market failures prevent private investment from leading the way. |
| UK | 25/06/2025 | The UK government has published exposure drafts of UK Sustainability Reporting Standards (UK SRS) S1 and S2, based on IFRS S1 and S2 issued by the International Sustainability Standards Board (ISSB). The consultation is open until 17 September 2025, and final standards may be issued in autumn 2025. The consultation proposes minor amendments to the standards to adapt them for use in a UK context, while preserving the international comparability intended by the ISSB Standards. It also invites feedback on the costs and benefits of UK SRS, which will help inform future government decisions on whether to mandate disclosures for economically significant companies. |
| TRIS – European Commission / Finland | 27/06/2025 | The Finnish Government proposes legal amendments to align national laws with the EU Battery Regulation and the updated WEEE Directive. The changes ensure proper battery lifecycle management, clarify producer responsibilities, and remove retroactive cost obligations for certain electrical equipment. The goal is to support recycling, environmental protection, and the circular economy. The new laws are planned to take effect on 1 January 2026. |
| UK Environment Agency | 27/06/2025 | The UK Environment Agency published RPS 350, setting out a temporary regulatory position on recyclability assessment obligations under the 2024 Packaging Regulations. It covers requirements for producers to assess and report household packaging recyclability for 1 January to 30 June 2025, with reports due by 1 October 2025. The document explains how H2 2025 data may be used instead, and how this will influence modulated fees for 2026–2027. |
| France | 30/06/2025 | Citeo Soin & Hygiène, registered under number 930 626 262 in the Paris Trade and Companies Register, has been officially approved as an eco-organization from July 1, 2025, to December 31, 2030. This approval enables the company to fulfil the requirements outlined in the decree of December 20, 2024, concerning the extended producer responsibility (EPR) scheme for single-use sanitary textiles, as specified in Article L. 541-10-1 and Article R. 543-360 of the French Environmental Code. |
| UN | 30/06/2025 | The European community concluded the Fourth International Conference on Financing for Development by adopting the “Compromiso de Sevilla,” (Sevilla Commitment) a renewed global framework to mobilize financing for the Sustainable Development Goals. The agreement highlights the need to strengthen international financial institutions, including multilateral development banks (MDBs), promote fairer international tax cooperation, improve access to concessional finance, and support low- and middle-income countries. |
| European Commission | 01/07/2025 | The Danish EU Presidency presented the programme “A strong Europe in a changing world,” that aims to prioritize two main goals: enhancing European security and boosting competitiveness & green transition. In the green transition it aims to accelerate the green agenda, including a new 2040 climate target, clean energy infrastructure, simplified REACH chemicals rules, and support for biotech, pharmaceuticals, and sustainable agriculture. |
| European Securities and Market Authority (ESMA) | 1/07/2025 | On 1 July 2025, ESMA released its first thematic note on sustainability‑related claims, aimed at controlling greenwashing in financial communications. It targets non‑regulatory communications—such as marketing materials, websites, ESG credentials, labels, awards, and peer comparisons—not replacing formal disclosure rules but offering practical educational support.
Additionally ESMA released the 2023-2024 CSA Final Report on Integration of sustainability Risks and Disclosures. This initiative, carried out in coordination with the national competent authorities (“NCAs”) of the European Economic Area, aimed to evaluate compliance with the Sustainable Finance Disclosure Regulation (“SFDR”), the Alternative Investment Fund Managers Directive, and the UCITS Directive. |
| US/California | 01/07/2025 | California’s Senate Bill 707, the Responsible Textile Recovery Act of 2024, creates the nation’s first extended producer responsibility (EPR) program for apparel and textiles. Similar to California’s EPR law for packaging (SB 54), this legislation shifts recycling responsibility from consumers and local governments to producers. Covered producers must join a stewardship organization to manage compliance, with CalRecycle tasked with adopting regulations by July 1, 2028. |
| European Commission | 02/07/2025 | The European Commission launched key actions to advance the EU’s transition to a circular economy, laying the groundwork for a Circular Economy Act expected in 2026. These include a Strategic Dialogue with stakeholders, a new digital waste shipment system to improve traceability and cut illegal waste trade, and a public consultation to harmonize waste classifications. An evaluation of e-waste rules revealed that nearly half of electronic waste goes uncollected, prompting plans to revise related legislation. Further measures on battery recycling and secondary materials are also expected soon. |
| European Commission | 02/07/2025 | The European Commission has proposed amendment to the EU Climate Law to reduce net greenhouse gas emissions by 90% by 2040 compared to 1990 levels, as a key milestone toward achieving climate neutrality by 2050. This target builds on the EU’s existing commitment to cut emissions by at least 55% by 2030 and is based on advice from the Intergovernmental Panel on Climate Change and the European Scientific Advisory Board on Climate Change. The approach includes deep emissions reductions across all sectors, an increased role for carbon removals, and limited use of international credits starting from 2026. The proposal also aims to ensure a just and inclusive transition by supporting competitiveness, job creation, and energy affordability while maintaining the EU’s global leadership in climate action. |
| European Commission | 02/07/2025 | Public Consultation on Green-listing certain waste for the purposes of shipments to recovery between Member States. This initiative puts the new Waste Shipments Regulation into practice and supports the goals of the upcoming Circular Economy Act. It aims to classify certain waste streams as green-listed and may set contamination thresholds to allow other types of waste to be included. A consultation process will take place beforehand to collect feedback from a broad range of stakeholders on which waste streams should be considered.
Consultation period: From 2 July 2025 – 31 October 2025 |
| European Commission | 02/07/2025 | The European Commission has published its evaluation of the Waste Electrical and Electronic Equipment (WEEE) Directive. In place for over 20 years, the Directive remains highly relevant, having improved the treatment and handling of WEEE across the EU, with collection volumes increasing significantly between 2012 and 2021. However, nearly half of WEEE generated is still not collected, most Member States miss the 65% collection target, and only about 40% is recycled. The evaluation highlights five main shortcomings: the Directive’s limited scope (excluding emerging CRM-rich waste streams), low collection rates, insufficient recovery of critical raw materials, fragmented implementation of Extended Producer Responsibility (EPR) schemes, and inconsistent treatment standards across recycling facilities. Despite these challenges, the Directive is found to be coherent, proportionate, and aligned with broader EU goals. The Commission plans to consider these findings in the upcoming revision of the Directive under the Circular Economy Act, potentially redefining its scope and introducing mandatory treatment standards to better support the EU’s secondary materials market. |
| European Commission | 07/07/2025 | Public Consultation on The European Commission’s “Roadmap towards Nature Credits”. This is a strategic approach to foster high-integrity, voluntary nature credit systems in the EU to reward nature-positive actions. The roadmap highlights the essential role of nature for economic stability and calls for scaling up both public and private investments in biodiversity. It introduces a two-step process: certification of nature-positive practices followed by issuance of verifiable credits. The roadmap emphasizes strong governance, transparency, and scientific standards to ensure credibility and prevent greenwashing. It proposes expert group consultations, pilot projects, public seed funding, and international cooperation to develop robust methodologies, governance frameworks, and market readiness by 2027.
Consultation period: From 7 July 2025 – 30 September 2025 |
| European Commission | 07/07/2025 | In a coordinated effort to assess progress on environmental protection, all EU Member States have now submitted their 2025 Environmental Implementation Review (EIR) reports. These reviews provide a detailed look at how each country is applying EU environmental laws, identifying successes, gaps, and areas needing urgent action.
The reports cover a wide range of topics including waste management, air and water quality, nature and biodiversity protection, climate change readiness, and environmental governance. Each report outlines the environmental investments required to meet EU targets, with figures ranging from hundreds of millions to several billion euros annually per country. The EIR process not only helps measure national performance but also promotes cooperation, knowledge sharing, and policy alignment across the Union. |
| European Commission | 08/07/2025 | On 8 July 2025, the EU published the last version of the EUDR Compliance Guidance. The document outlines how obligations apply based on company type (operator or trader), size (SME or non-SME). It also presents 11 illustrated supply chain scenarios. While product-specific, the rules apply equally across all relevant commodities. |
| European Parliament | 09/07/2025 | the European Parliament voted to reject the EU Commission’s proposed country risk benchmarking under the EUDR, citing concerns over outdated data, vague three-tier risk categories, and inconsistent classifications. The motion urges the Commission to revise the framework to ensure greater transparency, credibility, and alignment with the regulation’s goals. |
| EURATEX | 10/07/2025 | The European Apparel and Textile Confederation (EURATEX) has recently highlighted several key developments shaping the industry. A new “Stitch Together” initiative in France aims to enhance sector resilience, while EURATEX is urging swift finalisation of EU free trade agreements with Southeast Asian countries to boost competitiveness. ReHubs is preparing a circularity roadmap to address upcoming textile waste rules, and EURATEX has voiced concerns over potential overregulation in the EU’s Ecodesign for Sustainable Products Regulation. Additionally, a new EU-backed partnership, “Textiles of the Future,” will support innovation and circularity with up to €60 million in funding through 2030. |
| European Commission | 10/07/2025 | On 10 July 2025, the Council of the European Union adopted its first reading position on the revision of the EU Waste Framework Directive, paving the way for sweeping changes in the textile industry.
The proposal introduces mandatory Extended Producer Responsibility (EPR) for textile, textile-related, and footwear products. Producers will be required to finance the collection, sorting, reuse, and recycling of their products, with incentives for circular design and the option for Member States to apply higher fees to fast fashion practices. Industry players are advised to begin adapting now—final adoption is expected soon. On 14 July 2025, the European Parliament’s Environment Committee issued its draft recommendation for second reading endorsing the Council’s first‑reading position on the revision of the EU Waste Framework Directive. |
| Joint Research Center European Commission | 11/07/2025 | The EU’s latest study on harmonising waste sorting labels across Member States has just released its Interim Report, revealing early findings that could shape the future of packaging and receptacle labelling in Europe. The study assesses systems like the Nordic pictogram scheme and others to develop a clear, evidence-based approach that helps consumers sort waste more accurately. These insights will guide the next label prototype, to be tested in a behavioural experiment. The project blends behavioural science with participatory design to inform EU policy and support the rollout of consistent sorting labels across Europe. |
| European Parliament | 11/07/2025 | Study requested by the INTA Committee: An update on the economic, sustainability and regulatory effects of the trade part of the EU-Mercosur Partnership Agreement. The report evaluates the economic, sustainability, and regulatory impacts of the trade section of the EU-Mercosur Partnership Agreement (EUMETA), focusing on updates between the 2019 and 2024 versions. It finds that the agreement’s macroeconomic effects are positive but moderate, with most benefits accruing to the EU industry. Sustainability-related risks have decreased due to new developments, including EU unilateral measures that enforce deforestation-free standards and strengthen labour rights. In Mercosur countries, CO₂ emissions and deforestation rates have declined. Despite ongoing global trade tensions, the agreement’s economic and political advantages outweigh the remaining risks, which are addressed through EUMETA safeguards and additional tools such as agricultural support funds and unilateral sustainability measures. |
| HM Treasury
UK |
15/07/2025 | On 15 July 2025, HM Treasury announced it will no longer pursue the UK Green Taxonomy, citing concerns over complexity, cost, and limited impact. Following a lukewarm public consultation in 2024, the UK government now plans to focus on tools like UK Sustainability Reporting Standards (UK SRS) and credible transition plans. A new consultation launched on 25 June 2025 seeks views on the exposure drafts of UK Sustainability Reporting Standards (UK SRS), which are based on the standards published by the International Sustainability Standards Board (ISSB™) in June 2023. The consultation closes on 17 September 2025. |
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