On 20 November 2025, the European Commission proposed major changes to the Sustainable Finance Disclosure Regulation (SFDR) to simplify disclosures and strengthen investor protection. The new framework introduces three product categories—Transition, Sustainable, and ESG Basics—each requiring a 70% investment commitment and exclusion of harmful industries. Simplified two-page templates will replace current disclosure rules, and entity-level obligations like principal adverse impacts are removed.
Only products in these categories may use sustainability-related terms in marketing. Taxonomy disclosures become optional, with a 15% safe harbor for aligned assets. Application is expected 18 months after adoption, likely in 2028, marking a significant shift toward clearer, stricter sustainability standards.

On 8 October 2025, Brazil’s Superior Court of Justice (STJ) issued a binding precedent on the criminal offense of pollution under Article 54. The ruling, delivered through Special Appeal under the system of repetitive appeals, clarifies that the offense is of a formal nature and constitutes an abstract danger crime. It establishes that potential harm to human health is sufficient for liability, without requiring proof of actual harm or technical expertise. Evidence may be provided through any suitable means. This precedent simplifies prosecution and will guide lower courts nationwide, reinforcing environmental compliance obligations.

The European Supervisory Authorities report steady improvement in principal adverse impact (PAI) disclosures under the SFDR, especially among larger financial groups. However, disclosures often lack quantifiable actions, and “non-consideration” statements remain generic. The ESAs recommend clearer, shorter, and machine-readable disclosures, more proportional requirements, and less frequent reporting to enhance quality and relevance. Further regulatory guidance may follow to address persistent shortcomings.

Companies are navigating a shifting ESG and sustainability regulatory landscape across Europe and the US. The session opened with an overview of deregulatory trends in Europe, including the Omnibus package, evolving CSRD and CSDDD obligations, and the EU Deforestation Regulation. In contrast, the US discussion highlighted the rise of the anti-ESG movement at the federal level, set against California’s continued push for climate disclosure laws impacting both public and private companies.

On 26 February 2025, the European Commission adopted the Omnibus Simplification Package, aimed at reducing regulatory burdens related to sustainability reporting for European companies. This initiative amends several key directives, including the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive and the EU Taxonomy Regulation.
These proposals aim to streamline reporting obligations, enhance competitiveness and adjust the scope and timelines of existing regulations.