ESG legislation for UK and EU

UK Legislation and Initiatives

  • UK Emissions Trading Scheme (UK ETS): Following Brexit, the UK established its own ETS, replacing its participation in the EU ETS. The UK ETS operates on a 'cap and trade' principle, setting a cap on the total amount of greenhouse gases that can be emitted by covered sectors, driving carbon reduction over time​​.
  • Climate Change Act 2008: This foundational piece of legislation commits the UK to reducing greenhouse gas emissions by at least 80% by 2050 compared to 1990 levels, with recent amendments targeting net-zero emissions by 2050​​.
  • Environmental Reporting: The UK mandates large companies and limited liability partnerships to report their energy use, greenhouse gas emissions, and energy efficiency actions under the Streamlined Energy and Carbon Reporting (SECR) regime​​.

EU Legislation and Initiatives

  • European Climate Law: Establishes a legally binding target of net-zero greenhouse gas emissions by 2050, with an intermediate target of reducing emissions by at least 55% by 2030 compared to 1990 levels. The law includes mechanisms for tracking progress and adjusting actions, aiming for all sectors to contribute to achieving climate neutrality​​.
  • European Green Deal: A comprehensive policy framework aiming to make the EU's economy sustainable by turning climate and environmental challenges into opportunities across all policy areas, with the goal of achieving climate neutrality by 2050. The Green Deal covers various sectors, including energy, transportation, agriculture, and buildings, and includes initiatives like the Just Transition Mechanism to support regions most affected by the transition towards a green economy​​.
  • Circular Economy and Waste Management: The EU promotes a circular economy model, minimizing waste and enhancing resource efficiency through directives and regulations concerning waste management, recycling, and eco-design​​.
  • Ecodesign for Sustainable Products Regulation (ESPR): Expands the Ecodesign directive’s scope to cover a wide range of products beyond energy-related ones, setting criteria for eco-friendliness and energy efficiency​​.
  • Sustainable Finance Disclosure Regulation (SFDR): A financial reporting framework that promotes transparency regarding sustainability risks and impacts, requiring financial market participants and advisors to disclose how they integrate sustainability considerations into their products​​.
  • EU Taxonomy for Sustainable Activities: Provides a classification system to define which economic activities can be considered environmentally sustainable, helping guide investment towards sustainable projects​​.
  • Corporate Sustainability Reporting Directive (CSRD): Expands reporting requirements for companies on environmental, social, and governance (ESG) matters, including the impact of their activities and future sustainability goals​​.

These legislative and regulatory frameworks demonstrate the UK's and the EU's commitment to addressing climate change, promoting sustainability, and transitioning to a low-carbon economy. Businesses operating within these jurisdictions must navigate a complex landscape of requirements aimed at reducing environmental impacts and enhancing sustainability reporting and performance.

We need your consent to load the translations

We use a third-party service to translate the website content that may collect data about your activity. Please review the details in the privacy policy and accept the service to view the translations.