Global Sustainability & ESG Insights - July 2026

Asia

China

15th Five-Year Action Plan for Carbon Peaking Issued

On July 9, China's State Council published the 15th Five-Year Action Plan for Carbon Peaking, covering the period to 2030. The plan targets a 17% reduction in CO₂ emissions per unit of GDP compared to 2025 levels. Non-fossil energy is to reach 25% of total consumption by 2030. Wind and solar capacity must reach 2.8 billion kilowatts by 2030.  The plan addresses energy transition, industrial decarbonization, buildings, transport, and ecological carbon sinks. New energy vehicles is targeted to comprise 30% of total vehicle stock by 2030. It also establishes a national low-carbon transition fund and promotes green finance.

15th Five-Year Plan for Renewable Energy Development Issued

On July 6, China's National Development and Reform Commission and National Energy Administration published the Renewable Energy Development 15th Five-Year Plan (2026–2030). The Plan targets total renewable energy consumption of approximately 1.8 billion tons of standard coal by 2030. Total renewable energy installed generation capacity is targeted to reach roughly 3.5 billion kilowatts, with wind and solar exceeding 2.8 billion kilowatts. Offshore wind capacity should reach 100 gigawatts. The Plan targets green hydrogen production of 2 million tons by 2030.  It requires mandatory minimum renewable energy consumption targets for key industries.  The Plan promotes zero-carbon factories, renewable energy in buildings and transport, and international cooperation on green energy standards.

Europe

Right to Repair Directive Transposition Deadline Reached

On July 31, the transposition deadline for the Directive on common rules promoting the repair of goods takes effect. The Directive obliges manufacturers of listed products to repair goods within a reasonable time and at a reasonable price. It prohibits contractual clauses, hardware, or software techniques that impede repair. Consumers choosing repair over replacement under the legal guarantee receive an additional one-year guarantee extension. A European online repair platform will become operational by 2027. The Directive complements the Ecodesign for Sustainable Products Regulation and aims to reduce waste generated by premature product disposal.

European Commission Issues Net-Zero Auction Guidance

On July 29, the European Commission published guidance on Article 26 of the Net-Zero Industry Act. The guidance explains how member states, auction authorities, and market participants should apply the Act’s requirement to use non-price criteria in renewable energy auctions, rather than awarding support solely on the basis of lowest cost. The Net-Zero Industry Act aims to strengthen Europe’s net-zero technology manufacturing ecosystem, reduce strategic dependencies in clean technology supply chains, and support EU climate and energy objectives. The Act sets targets for EU manufacturing capacity to reach at least 40% of annual deployment needs for net-zero technologies by 2030 and 15% of global production by 2040. The guidance includes annexes with a resilience criterion flowchart and examples of compliant solar PV installations and onshore wind turbines. The document is for guidance only, with the legislation itself remaining legally binding.

Ban on Destruction of Unsold Clothes and Shoes Enters into Force

On July 19, the EU ban on destroying unsold textiles entered into force for large companies under the Ecodesign for Sustainable Products Regulation. The ban covers unsold apparel, clothing accessories, and footwear listed under Annex VII. Businesses must prioritize selling, donating, or preparing unsold products for reuse. Requirements also mandate in-scope businesses to disclose annual figures on unsold products discarded. Derogations apply where products are unsafe, counterfeit, or rejected by donation schemes. Businesses relying on derogations must retain documentation for five years. UK businesses placing in-scope products on the EU market must also comply. Medium-sized enterprises must comply from July 19, 2030. Micro and small enterprises are exempt.

For more information, view our compliance guide.

Delegated and Implementing Acts Adopted to Support Deforestation Regulation Implementation

On July 13, the European Commission adopted a Delegated Act and Implementing Act to support the Deforestation Regulation (EUDR) Implementation. The Delegated Act updates Annex I, removing cattle hides, leather, re-treaded tires, and certain rubber articles. It adds soluble coffee, certain palm oil derivatives, and frozen cattle tongues to the scope.  Newly added products will become subject to the Regulation from December 30, 2027. Exemptions are introduced for waste, used goods, packing material, and medicinal product inputs. The Implementing Act establishes technical rules for the EUDR Information System.  The Regulation applies from December 30, 2026 for large and medium-sized operators. Micro and small operators face a June 30, 2027 deadline.

European Parliament Adopts CBAM Position

On July 6, the European Parliament adopted its position on proposed changes to the Carbon Border Adjustment Mechanism (CBAM). MEPs backed extending CBAM's scope beyond basic materials to downstream products, including finished steel and aluminum goods such as fasteners, wire and springs. The Committee strengthened anti-circumvention rules, clarifying that "slight processing" of goods to avoid CBAM obligations is captured, and introduced new rules to close an online imports loophole through weight-based thresholds applied across a seller's shipments.

Revised European Sustainability Reporting Standards Adopted

On July 3, the European Commission adopted two delegated acts revising the European Sustainability Reporting Standards (ESRS) and establishing a voluntary reporting standard for smaller companies. The revised ESRS, forming part of the Omnibus I simplification package, reduce mandatory datapoints by over 60% and total datapoints by over 70%.  The standards aim to be shorter and clearer, introduce new flexibilities, and simplify the materiality assessment. The voluntary standard provides a proportionate framework for companies outside the scope of the Corporate Sustainability Reporting Directive (CSRD) and introduces a value chain cap, preventing CSRD-scope companies from requiring value chain partners to disclose beyond what the voluntary standard covers. Both delegated acts will now be discussed by the European Parliament and Council a scrutiny period of two to four months.

Accelerated Permitting for Energy Grids and Renewables

On July 2, the European Parliament's Committee on Industry, Research and Energy adopted a proposal to speed up permit-granting procedures for renewable energy projects, electricity grids, storage facilities and recharging stations. The draft legislation, forming part of the European grids package, introduces shorter deadlines, a single national digital portal for permitting, and a dedicated EU-wide framework for grid infrastructure. MEPs proposed three-month caps on grid connection procedures with tacit approval, and raised capacity thresholds triggering permit requirements from 100 kW to 200 kW.

Middle East

Oman

Fifth Phase of Plastic Shopping Bag Ban Enforced

From July 1, Oman's Environment Authority enforced the fifth phase of its plastic shopping bag ban under Decision No. 8/2024. The ban now extends to furniture stores, traditional dagger shops, gold and silver outlets, and car dealerships. It prohibits single-use plastic bags under 50 micrometers thick. Approved alternatives include paper, cloth, cardboard, cotton, and non-woven fabric bags. The phased rollout began in July 2024, progressively covering retail, food, and specialty sectors.   Violations carry fines of RO 50–1,000, doubled for repeat offences. Full compliance across all commercial sectors is required by January 1, 2027.

UK

England Introduces Stricter Waste Carrier Permitting Regulation

On July 22, England made the Environmental Permitting (Waste Controlling or Transporting) and Relevant Functions of Primary Authorities (Amendment) (England) Regulations 2026. Most provisions take effect on July 22, 2027. The regulations replace the current waste carrier, broker and dealer registration regime with a stricter environmental permitting framework. New permit categories will apply to waste controlling and transporting activities, while operators must undergo identity and criminal record checks, demonstrate technical competence, and display permit numbers on vehicles and advertising. The reforms give the Environment Agency stronger enforcement powers. Serious offences could attract penalties of up to five years’ imprisonment. The regulations also extend the primary authority scheme to support compliance with deposit return scheme obligations.

Wales Rural Proofing and Environmental Sustainability White Paper Published

On July 22, the Welsh Government published a Rural Proofing and Environmental Sustainability White Paper for consultation. The White Paper sets out sustainability reforms to support the developing Climate and Nature Action Plan. Key proposals include amending carbon budgeting and reporting frameworks under Welsh climate legislation. The White Paper proposes strengthening forestry enforcement powers and amendments to single-use plastics reporting. It also proposes granting Welsh Ministers powers to modify retained EU environmental regulations. A new civil sanctions framework for environmental offences is under consideration. The consultation closes on October 14, 2026.

Government Response to Independent Review of Greenhouse Gas Removals Published

On July 17, the Department for Energy Security and Net Zero published its response to the independent review of greenhouse gas removals (GGRs). The government aims to implement a high-integrity GGR standard aligned with the EU Carbon Removal Certification Framework.  An interim UK GGR biochar methodology is being developed also. The government will publish a delivery plan for carbon budgets to 2042, setting out the role of GGRs.  It rejected proposals for an Office for GGRs and the principle of geological net zero. Mandatory carbon capture on SAF plants was also declined, though amending the SAF mandate for GGR procurement is under consideration.

Government Launches Consultation on Equal Pay and Pay Discrimination Reform

On July 14, the Office for Equality and Opportunity published a consultation on reforming the equal pay framework, alongside the outcome of its equality law call for evidence. The consultation proposes, among other things, mandatory pay transparency in job advertisements and strengthened equal pay audit and job evaluation scheme powers. Phase 2 reforms would “level up” equal pay protections  so that broadly equivalent protections apply to sex, race and disability pay discrimination claims. The government also proposes a new duty on contracting parties to take all reasonable steps to maintain pay equality in outsourcing arrangements, breach of which would be enforced by a newly created Equal Pay Regulatory and Enforcement Unit. The consultation closes on October 27, 2026.

Immigration and Asylum Bill Introduced

On July 13, the Immigration and Asylum Bill underwent its second reading. The Bill sets out to significantly strengthen modern slavery supply chain transparency. Part 5 amends Section 54 of the Modern Slavery Act 2015 to require specific information. Businesses must identify supply chain areas at risk of slavery and human trafficking. Statements must detail due diligence processes, staff training, and performance indicators used to assess risk. New enforcement mechanisms will also replace the current voluntary compliance approach.

For more information, view our briefing.

US

EPA Guidance Eases Data Center Power Rules

On July 27, the Environmental Protection Agency (EPA) issued guidance stating that “islanded” power generation facilities (those not connected to the public electricity grid) are not subject to the Clean Air Act’s Acid Rain Program. The rationale is that they neither sell electricity nor report as generating units to the Department of Energy. The guidance is intended to facilitate faster development of data centers by allowing greater flexibility in siting and operating dedicated power facilities while reducing pressure on local electricity grids. The guidance notes that if an islanded facility later connects to the grid, it may become subject to Acid Rain Program requirements.

Proposed Rulemaking to Revise Appliance Energy Conservation Standards Process

On July 2, the Department of Energy (DOE) issued a proposed rulemaking to revise its Process Rule for appliance energy conservation standards. The proposal covers household appliances including air conditioners, gas stoves, washing machines, water heaters, and refrigerators. Future standards would need to achieve a 10% energy reduction over 30 years. The proposal does not repeal existing standards but changes the process for adopting future ones. The DOE also issued a Request for Information on methodologies used in developing standards. Comments on the proposed rule are due by August 6, 2026.

Connecticut PFAS Consumer Product Labeling Law Takes Effect

On July 1, Connecticut's labeling and notification requirements under General Statutes § 22a-903c took effect for consumer products containing intentionally added PFAS. The law applies where PFAS is deliberately added during manufacture and its continued presence is desired in the final product to perform a specific function.   Covered product categories include cookware, cosmetic products, apparel, children's products, textile furnishings, carpets, cleaning products, dental floss, fabric treatments, menstruation products, ski wax, and upholstered furniture.  Labels must be clearly visible before sale and use words or symbols approved by the Department of Energy and Environmental Protection (DEEP). Manufacturers must also submit written notification to DEEP disclosing the function, purpose, and amount of PFAS in covered products.  Beginning January 1, 2028, the law prohibits the sale, manufacture, or distribution of any covered consumer product containing intentionally added PFAS.

EPA Issues Permitting Guidance on Obtaining Emission Reduction Credits

On July 1, the Environmental Protection Agency (EPA) issued guidance clarifying how permitting authorities may apply emission reduction credit (ERC) requirements under the Nonattainment New Source Review (NNSR) preconstruction permitting program. The guidance clarifies that permitting authorities may issue NNSR permits before the required ERCs have been secured, provided the permit contains an enforceable commitment from the permittee to obtain the necessary emission reductions before commencing operations, and an express prohibition on commencing operations until the required ERCs are identified, approved, and secured.

Draft Guidance Published on Reducing Risk from Chemicals in Biosolids

On July 1, the Environmental Protection Agency (EPA) released draft guidance to help wastewater utilities, landowners, and the public reduce risk from PFOA and PFOS in biosolids. The guidance provides voluntary recommendations for mitigating risks when managing sewage sludge, including avoiding land application of biosolids near waterways and on lands where children play, and avoiding their use as fertilizer for home-grown produce. The draft guidance forms part of the EPA's comprehensive, lifecycle-based strategy to address PFAS. A 60-day public comment period on the Guidance closes on September 4, 2026.

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

Further reading and listening

Global AI Regulatory Update - July 2026

Supply-Chain-Transparency-New-Modern-Slavery-Duties-and-Penalties

EU-Forced-Labour-Regulation-Guidelines-Published

Financing the Energy Transition