Global Sustainability & ESG Insights - August 2026

Asia

China

Ecological and Environmental Code Enters into Force

On August 15, the Ecological and Environmental Code entered into force. The Code consolidates and updates existing environmental laws into a comprehensive framework covering pollution control, ecological security, and low carbon development. It expands ecological and environmental impact assessments to include greenhouse gas emissions. It also extends the limitation period for ecological and environmental civil claims and for administrative enforcement of violations resulting in harmful consequences, such as environmental pollution or ecological damage from three and two years respectively to five years. Penalties for serious violations have also been increased.

Hong Kong

HKICPA Submits Policy Recommendations on Green Development and Sustainable Finance

On August 13, the Hong Kong Institute of Certified Public Accountants (HKICPA) announced that it had submitted its formal response to the public consultation on Hong Kong's First Five-Year Planfor Economic and Social Development. The submission puts forward policy recommendations across seven areas, including green development and sustainable finance, talent and professional qualifications development, and Hong Kong's role as an international financial center, in alignment with the National 15th Five-Year Plan. In relation to green development and sustainable finance, the HKICPA recommends using Hong Kong Standard on Sustainability Assurance 5000 as the foundation for fostering the professional development of sustainability assurance businesses. It also proposes accelerating the development of carbon credit trading and accreditation mechanisms. The Government has announced that the final Plan will be released on September 16.

Europe

Feedback Period Opens on Proposals to Amend the EU Emissions Trading System

On August 20, the European Commission opened a feedback period on three legislative proposals to amend the EU Emissions Trading System (EU ETS), published as part of the mandatory EU ETS review in July 2026. The proposals aim to strengthen decarbonisation investment while maintaining a robust carbon market. The first proposal amends monitoring, reporting and verification requirements for the maritime sector. The second increases the quantity of free allowances allocated under heat and fuel benchmarks for 2026 to 2030. The third amends the main EU ETS Directive and the Market Stability Reserve Decision, aligning the system with the EU's proposed 2040 climate target. Feedback is open until October 16, 2026.

Consultation on Omnibus Regulation to Simplify Energy-Efficient Products Legislation Published

On August 20, the European Commission invited feedback on its proposed Omnibus Regulation amending the Energy Labelling Regulation and the Tyre Labelling Regulation, adopted on June 24, 2026. The proposal aims to simplify and improve compliance through targeted amendments to rules governing the delivery and display of energy and tyre labels,  while maintaining information provision to customers. The proposal also aligns energy labelling with digital product passports under the Ecodesign for Sustainable Products Regulation. Feedback is open until October 15, 2026.

Calls for Evidence Published on Recycled-Content Rules for Plastic Packaging

On August 14, the European Commission published calls for evidence on three acts supporting the recycled-content requirements for plastic packaging under the Packaging and Packaging Waste Regulation (PPWR). The PPWR, which applied from August 12, 2026, introduces minimum recycled-content requirements for plastic packaging placed on the EU market. The first implementing act establishes the methodology for calculating and verifying recycled content from post-consumer plastic waste. The delegated act sets sustainability criteria for plastic recycling technologies, considering environmental performance, energy use and emissions. The second implementing act addresses equivalence verification for recycled content from non-EU countries. The calls for evidence close on September 16, 2026. Adoption is expected in Q4 2026.

End-of-Life Vehicles Regulation Enters Into Force

On August 13, the End-of-Life Vehicles Regulation entered into force, revising rules governing the design, production, collection, and end-of-life treatment of vehicles. The Regulation aims to strengthen circularity in the automotive sector by improving resource efficiency and increasing the recovery and reuse of materials. It sets mandatory targets for recycled plastic content in new vehicles of 15% from 2032 and 25% from 2036, with recycled content targets for steel and aluminium to to be established by the Commission. The Regulation also aims to secure a more stable supply of secondary raw materials, reducing Europe's dependence on imported virgin resources. 

Packaging and Packaging Waste Regulation Starts to Apply

From August 12, the Packaging and Packaging Waste Regulation applies across all Member States. The Regulation sets sustainability and labelling requirements for packaging throughout its life cycle. It aims to prevent unnecessary packaging and promote reuse, refill and recycling. All packaging must be designed to minimise harmful substances and be recyclable. Plastic packaging must contain minimum recycled content from post-consumer plastic waste. Packaging that increases the perceived volume of a product is prohibited. Producers are responsible for the entire life cycle of their packaging, including waste management. Member States must achieve a 70% recycling rate for all packaging waste by 2030. Deposit-return systems for single-use plastic or metal beverage containers must also be established by 2029.

For more information, view our PPWR briefing and our compliance guide.

UK

Guidance Published on Biodiversity Net Gain for Nationally Significant Infrastructure Projects

On August 27, the Department for Environment, Food and Rural Affairs (Defra) published guidance on meeting biodiversity net gain (BNG) requirements for nationally significant infrastructure projects (NSIPs). BNG will apply to all new NSIP applications in England from November 2, 2026. The guidance introduces a streamlined framework covering all NSIP sectors. BNG applies only to habitats impacted by development, not the entire site. Biodiversity gains may be delivered on site or off site. Streamlined requirements apply where developments have temporary impacts. Defra also updated guidance on irreplaceable habitat and what counts toward BNG. 

UK ETS Expansion to Waste Incineration and Energy from Waste Postponed

On August 26, the Department for Energy Security and Net Zero (DESNZ) published an update postponing the inclusion of waste incineration and energy from waste in the UK Emissions Trading Scheme (UK ETS). The expansion will no longer commence on January 1, 2028. DESNZ cited uncertainty and lack of guidance as barriers to planning for local authorities and operators. A revised timeline and full policy details will be published in due course. Since January 2026, in-scope operators have been subject to voluntary monitoring, reporting and verification obligations.

US

New York Judge Blocks State Climate Superfund Act

On August 31, the US District Court for the Northern District of New York ruled that New York's Climate Change Superfund Act is preempted by federal law. The Act, enacted in 2024, established a $75 billion cost-recovery program requiring fossil fuel companies to fund climate adaptation projects. The court held that the Act's strict liability scheme conflicts with federal interests governing interstate pollution under the Clean Air Act. The court separately held that cost-recovery demands against foreign producers are barred by the foreign affairs doctrine. The US Department of Justice had filed a statement of interest supporting the plaintiffs. New York Governor Hochul has indicated the state is reviewing options for appeal. 

Federal Court Upholds Oregon’s Extended Producer Responsibility Law

On August 27, the US District Court for the District of Oregon issued its Findings of Fact and Conclusions of Law in National Association of Wholesaler-Distributors v. Feldon. The decision upheld Oregon's Plastic Pollution and Recycling Modernization Act, an extended producer responsibility law enacted in 2021. The court found the Act does not discriminate against interstate commerce or impose clearly excessive burdens on producers. It also rejected claims that delegation of fee-setting authority to a private producer responsibility organization violated due process. The ruling dissolves a preliminary injunction that had blocked enforcement since February 2026. 

Federal Bill Introduced on Environmental Product Labelling

On August 6, a bill establishing national standards for recyclable, compostable, reusable and refillable product labels was introduced in the House of Representatives. The proposal would create standard definitions and criteria governing environmental claims on covered materials. It also identifies improper use of recycling and equivalent symbols as potentially deceptive under federal consumer-protection law. If enacted, the measure would affect businesses using circularity claims on packaging, food-service products and beverage containers. The bill remains under consideration.

Comment Period Closed on Proposed Withdrawal of Federal Climate Disclosure Rules

On August 3, the Securities and Exchange Commission’s public comment period on the proposal to withdraw the SEC's 2024 climate-related disclosure rule closed. The proposal would rescind the rule’s requirements for registrants to disclose specified climate information in registration statements and annual reports. Those requirements cover climate-related risks, greenhouse gas emissions and certain financial effects of severe weather events. The August deadline concluded the public-comment stage but did not itself rescind the rule. A final SEC regulatory decision remains necessary. Even if the SEC ultimately rescinds the 2024 disclosure rule, public companies have obligations under the existing federal securities laws to disclose material climate-related risks and impacts when omission of that information would make other disclosures misleading.

Co-authored by Nathan Handoll (ESG Researcher in Knowledge).

Further reading and listening

US Californias climate disclosure laws what businesses need to know

EU: Packaging and Packaging Waste Regulation Compliance Guide

EU Packaging and Packaging Waste Regulation

EU Industrial Accelerator Act: Market Access Meets Industrial Policy

EU Sustainability Omnibus Package: key changes and implications for businesses