ESG Insights - November 2026

Welcome to the latest ESG Insights – our newsletter highlighting a selection of key legal developments in the EU, UK, US and globally.

This month’s edition includes:

• EU Methane Regulation compliance postponement proposed
• EU Member States debate major post-2030 reform of the EU ETS
• Past the halfway point to the Omnibus I transposition deadline
• European Commission formally withdraws proposed Green Claims Directive
• UK publishes further guidance ahead of CBAM implementation
• UK Government plans mandatory human rights due diligence regime
• FCA publishes final rules to bring ESG rating providers into UK regulation
• First reporting deadline under California SB 253 approaches
• US Supreme Court hears oral arguments in Suncor Energy v. Boulder County
• ISSB publishes proposed global nature-related disclosure framework
• COP17 concludes first global review of biodiversity framework
• UNFCCC publishes climate reports ahead of COP31

In case you missed it, our October update is here. 

If you’d like to discuss how these developments may impact you, please connect with your usual Freshfields contact.

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Updates from the European Union

EU Methane Regulation: Commission proposes one-year postponement of key importer obligations  
On 14 October 2026, the Commission proposed a targeted one-year postponement of key compliance provisions under the EU Methane Regulation (Regulation (EU) 2024/1787), seeking to ease the administrative burden on industry and safeguard European energy supply ahead of winter. Pressures across global markets, driven by conflict in the Middle East, have elevated energy prices and heightened fossil fuel supply risks. 
The amendment defers monitoring, reporting and verification obligations for natural gas, oil and coal importers, alongside methane-intensity reporting rules applying to both importers and EU producers. The Commission affirmed that the delay preserves the ambition, integrity and scope of the 2024 Regulation, providing market participants with the time needed to achieve full compliance amid market volatility. 
The proposal is now undergoing the EU’s ordinary legislative procedure with involvement of the Parliament and the Council. Until co-legislators formally enact the text, existing statutory deadlines remain in force. 

EU Member States debate major post-2030 reform of the EU ETS 
On 16 October 2026, the European Parliament and the Council reached a provisional agreement adapting the Market Stability Reserve (MSR) of the EU’s Emissions Trading System (EU ETS). The targeted reform aims to reinforce carbon market resilience against excessive price volatility by allowing the reserve to retain up to 700 million allowances as a buffer, rather than invalidating holdings exceeding 400 million under current rules. The measure serves as an initial targeted step ahead of broader MSR modernisation proposals tabled in July 2026 as part of the ETS revision. The amendment to the MSR decision now requires formal adoption before entering into force after publication in the Official Journal. 

CSRD, "Stop-the-clock" and Omnibus I: past the halfway point to the Omnibus I transposition deadline 
With EU Member States past the halfway mark of the 12-month transposition window for the Omnibus I Directive, national implementation of the simplified Corporate Sustainability Reporting Directive (CSRD) framework remains uneven across the EU. While early-moving jurisdictions (such as Finland, Croatia and Slovenia) have already adopted or advanced their national implementing measures, the majority of EU Member States are still progressing draft legislation. For a jurisdiction-by-jurisdiction overview of national transposition progress, please refer to our recently published blog and consider signing up for our monthly updates. 

European Commission formally withdraws proposed Green Claims Directive 
The European Commission has officially withdrawn the proposed EU Green Claims Directive as part of its 2027 work programme, bringing an end to the planned rules on substantiating, communicating and verifying voluntary environmental marketing claims. The decision follows a prolonged legislative stalemate after political pushback over concerns that the regime would impose disproportionately burdensome compliance obligations on businesses. Notwithstanding the withdrawal of these rules, EU consumer protection against misleading environmental and sustainability-related claims continues under the recently enacted Empowering Consumers for the Green Transition Directive (EmpCo) (also see our EmpCo Implementation Tracker) and national unfair commercial practices laws. 
 

Updates from the United Kingdom

UK publishes further guidance ahead of CBAM implementation 
On 16 October 2026, the HM Revenue & Customs and HM Treasury published a series of documents to facilitate the implementation of the UK Carbon Border Adjustment Mechanism (UK CBAM), including default values and rates. Default values have been published for all products in scope from January 2027. The default rates were modelled on the EU data, but tailored to the average UK trade-weighted imports and are intended to support the compliance of obliged entities who have not yet gathered the actual reported emissions. The government published the CBAM rates for the following sectors: aluminium, cement, fertilisers, hydrogen and iron and steel. These rates reflect the effective carbon price in the UK ETS and are adjusted quarterly. To accompany the rates, the government also published an illustrative rates example using methodology set out in Part 5 of the Finance Act 2026, combining recent carbon pricing data, sector-level emissions information and the free allowances system operated under the UK Emissions Trading Scheme. 

UK Government plans mandatory human rights due diligence regime
The Government has announced plans to introduce a new mandatory human rights due diligence regime for large businesses, covering UK companies with global turnover above £350 million and non-UK companies generating more than £350 million of UK turnover. In-scope businesses will be required to identify, assess and address human rights and labour exploitation risks across their operations and supply chains.  
The proposals will also give a regulator powers to require the withdrawal of goods made with forced labour from the Great Britain market where due diligence requirements have not been met. The regime will be risk-based and aligned with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the UN Guiding Principles  on Business and Human Rights, with further detail on its design and implementation to follow. 

FCA publishes final rules to bring ESG rating providers into UK regulation 
On 3 November 2026, the Financial Conduct Authority (FCA) published its final regime for the regulation of ESG rating providers in policy statement PS26/22, bringing the activity within the UK regulatory perimeter for the first time. The tailored rules in ESG 6 cover transparency, governance and systems and controls, conflicts of interest and stakeholder engagement, with the main changes from the December 2025 proposals (CP25/34) concerning transparency and stakeholder engagement. ESG rating providers will also be subject to the FCA's high-level standards and the Senior Managers and Certification Regime (SM&CR), but not the Consumer Duty. Perimeter guidance in new PERG 19 addresses the regulated activity of providing an ESG rating. The authorisation gateway opens on 24 June 2027, with larger applicants (forecasting regulated revenue of £500,000 or more over the following 12 months) directed to apply between 24 June and 29 July 2027, and all other applicants between 30 July and 31 August 2027. The regime comes into force on 29 June 2028. Firms that submit their application within the designated 2027 windows may continue business as normal after this date pending the FCA's determination. However, providers that fail to apply within the stated timeframe, withdraw their application, or have it refused will not be permitted to take on new business once the regime goes live and must wind down. 

Updates from the United States

California SB 253: First corporate GHG reporting deadline approaches 
On 12 October 2026, the California Office of Administrative Law (OAL) approved the initial regulation governing corporate greenhouse gas reporting and climate risk disclosure fees, taking effect the same day. The regulations, which were approved by the California Air Resources Board (CARB) in February 2026, establish an administrative fee component and set the first-year reporting deadline under Health and Safety Code section 38532. The regime applies to US-based entities operating in California with annual revenues exceeding $1bn. Under the framework, covered entities must, by 10 November 2026, either report on Scope 1 and Scope 2 emissions for the prior fiscal year, or submit a statement that they are not submitting a report because they did not possess Scope 1 or Scope 2 emissions information and were not collecting that information prior to 5 December 2025. Scope 3 reporting commences in 2027. To facilitate compliance, CARB has released reporting guidance and launched an optional intake platform alongside an email submission route for filing required contact details and emissions data. Affected businesses should promptly confirm their reporting status and prepare their first-year submissions ahead of the November deadline. 

US Supreme Court hears oral arguments in Suncor Energy v. Boulder County 
On 5 October 2026, the Supreme Court of the United States (the Court) heard oral arguments in the landmark case Suncor Energy Inc v County Commissioners of Boulder County. The original climate lawsuit, pending before the Colorado state courts, seeks to hold two large energy producers liable in tort for the alleged contributions to global climate change through the promotion and sale of fossil fuels. The questions before the Court focus on whether Boulder may pursue state-law claims against fossil fuel producers for climate-related harms or whether federal law and constitutional principles bar those claims. Furthermore, there is a question as to whether the Court has jurisdiction to decide the case at this stage. Following the recusal of Justice Alito in late September, the Court might encounter a deadlock when deciding on the arguments presented by the parties. So far, the Court has not indicated a clean leaning towards either party. It is clear from the arguments that there is concern that a decision for Boulder may open the floodgates for similar claims to be brought in other states. Nevertheless, it remains to be seen how the Court will balance these issues in the upcoming months.

Updates from rest of world

ISSB publishes proposed global nature-related disclosure framework 
On 28 October 2026, the International Sustainability Standards Board (ISSB) opened a consultation on nature-related disclosures, running until 19 February 2027. Building on IFRS S1, the proposals clarify how companies disclose material nature-related financial risks and opportunities affecting their prospects. Designed to avoid siloed reporting, the framework connects nature disclosures to climate and financial statements. Drawing heavily on the Taskforce on Nature-related Financial Disclosures (TNFD), it focuses on locations of nature related risks and opportunities, as well as the role of interactions with indigenous peoples, local communities and affected stakeholders, when preparing the disclosures. Subject to feedback in the consultation, the proposal is for the framework to be categorised as an IFRS Practice Statement rather than a standard. The use of a IFRS Practice Statement would allow a reporting entity to continue to claim compliance with the ISSB Standards, even if they are not reporting against the nature related IFRS Practice Statement. 

COP17 concludes first global review of biodiversity framework 
From 19 to 30 October 2026, the 17th Conference of the Parties to the Convention on Biological Diversity (COP17) took place in Yerevan, Armenia. COP17 conducted the first formal global review of collective progress in implementing the Kunming-Montreal Global Biodiversity Framework, finding that the world is not on track to meet its 23 targets by 2030. One of the key outcomes was the adoption of the Yerevan Pathway, setting out priorities to accelerate implementation of the goals set out by the Framework. 

UNFCCC publishes climate reports ahead of COP31 
On 27 October 2026, UN Climate Change published three mandated reports assessing national climate pledges, transparency and adaptation progress ahead of COP31 which will take place in Antalya, Türkiye from 9 until 20 November 2026. The reports confirm emissions reductions remain substantially off-track. Current pledges project aggregate emissions reductions of around 6 per cent below 2019 levels by 2035, or around 9  per cent under full implementation, falling well short of scientific targets. Against this backdrop, the incoming COP31 presidency has placed implementation and acceleration at the core of its agenda for Antalya. As the Paris Agreement enters its second decade, COP31 will focus on delivering tangible emissions reductions, clean energy investments, and robust adaptation outcomes. 
 

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