ESG trends in the EU and US: What businesses need to know
Businesses across the EU and US are facing a shifting global landscape for sustainability compliance — but what’s changing and what can be done to prepare for it?
As sustainability regulations evolve across the globe, businesses are facing a complex and fast-changing compliance environment. In both the European Union and the United States, recent developments signal a recalibration of ESG mandates — some expanding, others narrowing — creating new challenges and opportunities for companies operating internationally.
During our recent webinar Navigating ESG change: Horizon-scanning in the EU and US, Enhesa experts Paula Galbiatti Silveira and Elaine Ye unpacked the most impactful regulatory trends shaping the ESG landscape in both regions.
Read on for a concise overview of what’s changing — and what it means for your business in the future.
While this session focused on the US and EU, Enhesa’s Corporate Sustainability solution delivers regulatory intelligence on a truly global scale.
Our customers gain visibility into evolving ESG requirements across every region, enabling them to stay compliant and proactive worldwide.
In fact, since January 2025, we’ve recorded more than 2,300 major regulatory changes impacting sustainability around the world — all in less than a year.
EU: Regulatory retrenchment and strategic simplification
For the EU, 2025 has seen much in the way of attempts to simplify what was becoming an exceptionally complex combination of regulations. Here is a summary of the main changes we’ve seen so far — and a summary of what effect these are likely to have on businesses going into 2026. The session was organized around four main topics.
1. Updates to the Omnibus Package I (CSRD and CSDDD)
CSRD: Narrowing the scope, easing the burden
The proposed amendments to CSRD include:
- Scope reduction: Raising the employee threshold from 250 to 1,000 and increasing financial thresholds for non-EU companies from €150M to €450M in turnover.
- Value chain cap: Limiting the data companies can request from smaller partners, reducing trickle-down compliance pressure.
- Sector standards shift: Moving from mandatory sector-specific standards to voluntary guidelines.
- Assurance requirements: Maintaining limited assurance only, removing the future mandate for reasonable assurance.
These changes could reduce the number of companies in scope by up to 90%, signaling a major shift in how sustainability reporting is approached across the EU.
CSDDD: Focusing on the largest players
The CSDDD is also seeing a dramatic narrowing:
- Scope expansion: Thresholds raised to 5,000 employees and €1.5B in turnover.
- Due diligence limitation: Focused on direct (Tier 1) business partners only.
- Climate plans and liability: Companies must adopt — but not necessarily implement — climate transition plans. The harmonized EU liability regime is being removed.
These changes mean only around 1,600 companies may remain in scope, drastically reducing the directive’s reach.
2. EU Deforestation Regulation (EUDR)
Set to apply from December 30, 2025, the EUDR mandates that commodities like cocoa, soy, and rubber must not originate from deforested land. However, concerns over IT infrastructure readiness may delay implementation by another year.
3. Green Claims Directive: Still in Limbo
Although the Green Claims Directive was withdrawn from trilogue negotiations, it remains a live proposal. Meanwhile, greenwashing is being tackled through the Empowering Consumers for the Green Transition Directive, already adopted.
4. EU AI Act and Digital Omnibus
The AI Act, the world’s first legal framework for AI, is now in force. A Digital Omnibus proposal is expected to address implementation challenges, though no changes to obligations are currently planned.
What this means for businesses
Despite regulatory delays and scope reductions, stakeholder pressure for sustainability transparency remains high. Companies must continue to build resilient ESG strategies that go beyond compliance — especially as global challenges like climate change and human rights persist.
US: State-led momentum amid federal uncertainty
In the US, de-regulation at the federal level has prompted a great deal of independent activity from various states.
California sets the pace for climate disclosure
While federal ESG mandates face rollbacks, states like California are advancing their own frameworks:
- SB 253: Requires Scope 1 and 2 emissions reporting by June 2026, and Scope 3 by 2027, for companies with over $1B in revenue.
- SB 261: Mandates biannual climate risk disclosures starting January 2026 for entities with over $500M in revenue.
Other states — including New York, Minnesota, and Washington — are introducing similar legislation, though timelines and scopes vary.
Extended Producer Responsibility (EPR)
States are also adopting EPR laws to shift waste management costs to producers:
- Maryland and Washington joined Maine, Oregon, Colorado, and California in passing EPR laws for packaging and paper products.
- Producers must join a Producer Responsibility Organization (PRO) and submit compliance plans by 2028.
These laws reflect growing support for circular economy principles and harmonized recycling systems.
Compliance challenges ahead
Businesses face a complex ESG landscape in the US:
- Litigation risks: Ongoing lawsuits, such as the challenge to California’s climate laws, may delay enforcement.
- Rulemaking delays: High volumes of public comments are slowing implementation timelines.
- Multi-state complexity: Companies must navigate overlapping and sometimes conflicting requirements.
What this means for businesses
Despite federal uncertainty, state-level ESG mandates are gaining traction. Companies should proactively monitor developments, engage in public consultations, and prepare for a future where sustainability reporting is not just expected — but required.
What businesses should do now
Despite delays and narrowed scopes, stakeholder expectations for ESG transparency remain high. Companies should:
- Monitor both regional and global regulatory developments
- Prepare for multi-jurisdictional compliance
- Build resilient sustainability strategies that go beyond minimum legal requirements
Even in this moment of uncertainty, pushback, and regulatory softening, the global challenges — climate, environment, human rights — have not disappeared. Stakeholders are still pushing for accountability. Companies need to implement responsible business practices as part of their long-term strategy. This gives them flexibility and resilience as regulations evolve.
Paula Galbiatti Silveira Expert Services Manager at EnhesaCatch up on the full discussion and expert insights by watching the webinar replay now.