Environment, society and governance | UK Regulatory Outlook for May 2024 – Osborne Clarke

The UK’s forest risky goods program takes a backseat

A general election was scheduled for July 4, and Parliament was adjourned. What this means for the legislative program is that any provisions that were not adopted last week at the summary will now disappear and we will have to wait for the newly elected government to introduce these provisions, but it has no obligation to do so. (More information about the washing period can be found in our Statistics)

In the case of the Forest Concern Goods Scheme, which will be introduced under the provisions of Schedule 17 of the Environment Bill 2021, the current government has stated that secondary legislation will be introduced “when Parliament time allows”. However, these provisions have not been introduced, so they cannot be passed now and we will have to wait for their introduction after the new government meets. Since the program is a requirement of the Environmental Protection Law, the newly elected government will have to introduce appropriate regulations, but we will learn about the program’s implementation schedule only after the elections.

CSDDD receives the final vote

The European Parliament adopted its final position on the Corporate Sustainability Due Diligence Directive on 24 April, and the Council formally adopted its textual position on 24 May.

The rules will apply to EU companies with at least 1,000 employees and a net turnover of €450 million. Non-EU companies may also be liable if they generated €450 million in the EU in the last financial year.

Other requirements include the need for companies to incorporate due diligence into their policies and adopt transition plans to ensure their business model is compliant with the 1.5°C global warming limit set out in the Paris Agreement. Penalties for non-compliance can amount to up to 5% of a company’s global turnover and include full compensation for victims if damage was caused by breaches of due diligence obligations.

The rules will now be published in the Official Journal of the European Union and will enter into force 20 days after publication. Member States then have two years to implement the CSDDD into national law.

The new regulations will be implemented in stages between 2027 and 2029.

Postponing European sustainability reporting standards

The directive calling for the adoption of European Sustainability Reporting Standards (ESRS) for certain sectors and companies from third countries has now been formally adopted by both the European Parliament and the Council.

The directive delays the adoption of the ESRS until June 30, 2026, in an attempt to reduce the regulatory burden on companies. These sectors include oil and gas, mining, road transport, food, cars, agriculture, energy production and textiles. This delay will allow companies to focus on implementing the first set of ESRS and reduce reporting requirements to the minimum necessary.

Corporate reporting: UK Sustainability Reporting Standards

The Department for Business and Trade has published a framework and terms of reference for the development of UK Sustainability Reporting Standards (SRS), which will be based on IFRS standards for sustainability disclosures.

The framework confirms that the stages of work needed to create an SRS include endorsing the IFRS Sustainability Disclosure Standards and then implementing them through UK legislation and FCA rules for listed companies.

The UK Government intends to make decisions on the endorsement of IFRS S1 and IFRS S2 by the first quarter of 2025. The endorsement of the IFRS Sustainability Disclosure Standards does not mean that companies will automatically be required to report under the resulting standard, although it is likely that this will lay the foundations for the future legal and regulatory obligations of listed and incorporated companies.

The European Parliament adopts its position on regulations regarding forced labor

Please see Modern Slavery.

Laws to stamp out modern slavery in NHS supply chains will be delayed due to general election

Please take a look Modern slavery.

The European Parliament adopts its position on the right to repair

Please see Products.

The European Parliament adopts its position on ecodesign for sustainable products

Please see Products.

The European Parliament has adopted its position on the rules on packaging and packaging waste

Please see Products.

Environmental Crime Directive published in the Official Journal

Please see Environment.

We also invite you to check out our latest international ESG knowledge updatefor legal, regulatory and market information.