Just two years ago, the regulatory momentum around sustainability was palpable. Governments, standard-setters, and institutions across the globe have been fast-tracking frameworks to drive transparency and accelerate climate action. Yet, today, the tide seems to be turning. Instead of scaling up, many governments are scaling back. A worrying pattern has emerged: key regulations are being delayed, weakened, or altogether frozen – just when the world needs them most. Continue reading as we explore how global sustainability regulations have shifted over the past two years—and what these changes mean for business sustainability.
A global stalling of regulatory will
In the US, political resistance has increasingly stifled ESG progress. Former President Donald Trump’s anti-ESG stance has re-entered the national conversation, fuelling a legislative and judicial backlash against climate-aligned investing. The SEC’s long-awaited Climate Disclosure Rules, once seen as a milestone for American corporate transparency, are now in limbo.
Political pressure and industry lobbying have pushed the rules into a holding pattern, raising doubts about whether they will ever come into force in their original form. Meanwhile, in Europe, even the gold standard of corporate sustainability—the Corporate Sustainability Reporting Directive (CSRD)—is under threat. The recent Omnibus Simplification Package Proposal from the European Commission includes recommendations to dilute CSRD reporting requirements.
Recommendations include extending phase-in timelines and reducing the number of mandatory disclosures. This proposal comes following mounting pressure from businesses concerned about compliance, complexity, and cost. Similar dynamics are playing out in other regions around the world. For instance, the UK has delayed its Green Taxonomy. Moreover, Australia is facing pushback against mandatory climate disclosures.
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Short-term reluctance, long-term consequences
The underlying message is clear: regulators are prioritising perceived short-term burdens over long-term sustainability outcomes. While it is true that many of these frameworks are complex and resource-intensive, especially for SMEs, their purpose is to create clarity, accountability, and comparability.
Sustainability reporting is not just a bureaucratic exercise; it empowers stakeholders to understand a business’s risks, opportunities, and impacts. It holds companies accountable for emissions, biodiversity loss, human rights violations, and other critical issues. Most importantly, it sets a global baseline for ethical, resilient corporate behaviour in the face of environmental and social crises.
Weakening these frameworks undermines the very goals they are designed to support. It also risks fragmenting the global landscape, forcing companies to navigate a confusing patchwork of voluntary standards and inconsistent expectations. This benefits no one, least of all the environment.
What we lose when we pull back
The dilution of global sustainability regulations creates deeper uncertainty for investors, businesses, and civil society. Financial institutions depend on clear and consistent data to price risk and channel capital responsibly. Sustainability leaders within organisations require regulatory support to secure internal buy-in and resources.
Citizens and consumers look to regulation as a reflection of collective responsibility. Rolling back regulations sends the opposite signal. It tells stakeholders that environmental and social risks are negotiable, that transparency is optional, and that short-term interests take precedence over planetary boundaries.
Key takeaways
What we need now is not less ambition, but more resolve. Regulators must resist the temptation to appease short-term political or economic pressure. Businesses must continue to prepare for robust disclosures and stay aligned with international frameworks like the Global Reporting Initiative (GRI), International Sustainability Standards Board (ISSB), and CSRD.
Furthermore, sustainability professionals must remain committed to building systems that are transparent, ethical, and future-fit. Ultimately, when regulation falters, it is the planet (the most vulnerable among us) that bears the cost. Enrol in our corporate compliance training to get the knowledge and support you need to decode global sustainability regulations, implement best practices, and lead with confidence.
