Environmental concerns are taking centre stage, no matter the industry, size of organisation or jurisdiction, forcing businesses to acknowledge their impact and make improvements. To address the growing environmental challenges, governments, organisations, and communities have introduced various sustainability regulations and standards to comply with. In this 101 guide, we will delve into the latest sustainability regulations, guides and standards, exploring what they mean for you.

Sustainability is more than a buzzword

Sustainability refers to the practice of ensuring that our actions today do not compromise the well-being of future generations. This involves considering the environmental, social, and economic impacts of our activities. The importance of sustainability is evident in several key areas:

1. Environmental Preservation: Sustainability regulations aim to reduce negative environmental impacts, such as greenhouse gas emissions, pollution and habitat destruction.

2. Social Responsibility: Sustainable practices promote ethical and socially responsible business behaviour, which can enhance an organisation's reputation and social impact.

3. Economic Viability: Sustainable practices can lead to cost savings through energy efficiency, waste reduction and resource optimization.

4. Legal Compliance: Non-compliance with sustainability regulations can lead to legal repercussions and fines, making it essential for businesses to stay informed about the latest regulations.

Latest Sustainability Regulations and Standards

As mentioned above, new regulations, standards and guidelines are coming thick and fast to help curb our carbon emissions. Findings from ESG Book, a data management company, reveal a 155% surge in ESG regulation in the last ten years. 

Below we have gathered some of the latest and most important sustainability regulations and standards to be aware of: 

*Please note this list was last updated in October 2023. It is not exhaustive and we welcome any key items that we may have missed.

Paris Agreement - The Paris Agreement, adopted in 2015, is a landmark international accord that aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels. It requires countries to regularly update their climate action plans and make efforts to reduce greenhouse gas emissions. Learn more

Sustainable Development Goals (SDGs) -The United Nations has established 17 Sustainable Development Goals, covering areas like poverty, hunger, clean water, and climate action. These were a replacement for the previous Millennium Development Goals (MDCs) which had 2015 as their target date. Organisations worldwide are encouraged to align their practices with these goals. Learn more

Global Reporting Initiative (GRI) - An autonomous international body that facilitates uniform reporting, thereby assisting organisations in satisfying stakeholder demands for comparable data. The GRI Standards are designed to empower organisations to produce comprehensive reports concerning their influence on sustainable development. Learn more

ISO 14001 - An internationally recognized standard for Environmental Management Systems (EMS). It provides a framework that organisations can follow to effectively manage their environmental responsibilities and minimise their environmental impact. ISO 14001 helps organisations establish policies, processes, and objectives for environmental performance, leading to improved environmental sustainability, legal compliance and a positive reputation. Learn more

EU Green Deal - The European Green Deal comprises a collection of policy measures designed to propel the EU toward a green transformation, ultimately striving to achieve climate neutrality by 2050. It advocates for the evolution of the EU into an equitable and thriving society with a contemporary and competitive economy. Learn more

REACH Regulation - REACH, or Registration, Evaluation, Authorization, and Restriction of Chemicals, is a European Union regulation designed to ensure that the chemicals produced and sold in the EU are safe for human health and the environment. It places the responsibility on manufacturers and importers to provide detailed information about the properties and potential risks of chemicals, with the aim of reducing the use of hazardous substances and promoting the safe use of chemicals. Learn more

Dodd-Frank Act Section 1502 - Also known as the Conflict Minerals Rule, requires companies to disclose their use of conflict minerals (tin, tantalum, tungsten, and gold) in their products. The goal is to prevent the sourcing of minerals that may be funding armed conflict in certain regions, particularly in the Democratic Republic of the Congo. Companies subject to this rule must conduct due diligence, report on the origin of these minerals, and, if necessary, take steps to mitigate the use of conflict minerals in their supply chains. Learn more

Extended Producer Responsibility (EPR) - EPR compels manufacturers to manage their product's full lifecycle, from production to disposal, with an emphasis on sustainability. This encourages eco-friendly product design, supports end-of-life recycling, and often requires producer-funded collection and recycling programs. The key aim of EPR is to transfer waste management responsibility from consumers and local governments to producers, promoting environmental responsibility and reducing product-related environmental impact. Learn more

Corporate Sustainability Reporting Directive (CSRD) - A European Union regulation aimed at enhancing sustainability reporting by companies. It expands on existing reporting requirements and is set to replace the existing Non-Financial Reporting Directive (NFRD). CSRD mandates that certain large companies must disclose information on environmental, social, and governance (ESG) aspects in their annual reports, ensuring greater transparency and consistency in sustainability reporting across the EU. Learn more

US Securities and Exchange (SEC) climate disclosure rule - A regulatory initiative designed to improve climate-related reporting by public companies. It requires these companies to disclose information about the impact of climate change on their businesses, including risks, opportunities, and the steps they are taking to address these issues. The rule aims to enhance transparency and provide investors with consistent and meaningful information to make informed investment decisions while addressing the growing importance of climate-related issues in financial markets. Learn more

International Sustainability Standards Board (ISSB) - The ISSB Standards empower companies and investors to lay a consistent groundwork for disclosing sustainability information in the global financial arena. This framework can be augmented by regional prerequisites to bolster the global foundation. Numerous countries across the globe have expressed their intent to adopt this new standard. Learn more

Carbon Pricing: Some regions have implemented carbon pricing mechanisms, such as carbon taxes or cap-and-trade systems, to encourage businesses to reduce their carbon emissions. Several jurisdictions have implemented or are considering carbon pricing mechanisms to reduce greenhouse gas emissions. These can include carbon taxes or cap-and-trade systems. Learn more

Task Force on Climate-related Financial Disclosures (TCFD) - The TCFD has formulated a structure aimed at aiding public corporations and other entities in enhancing the disclosure of climate-related risks and opportunities within their current reporting procedures. This entails revealing the organisation's governance related to climate-related risks and opportunities. Learn more

Alliance for Water Stewardship (AWS) Standard - A global framework for organisations to responsibly manage and protect water resources. It sets out a structured approach for assessing and addressing water-related risks and opportunities. The AWS Standard helps companies and communities in improving water management by focusing on sustainability, social responsibility, and economic viability. It emphasises collaborative efforts among stakeholders to achieve sustainable water use and promotes transparency and accountability in water stewardship practices. Learn more 

Sustainable Finance Disclosure Regulation (SFDR) - a European Union regulation that aims to improve transparency in sustainable finance. It requires financial market participants and financial advisors to provide more detailed and consistent information about the environmental and social impact of their financial products and services. SFDR is intended to help investors make informed decisions by ensuring they have access to clear and standardised information about the sustainability characteristics of investment products. Learn more

EU Taxonomy’s Climate Delegated Act - A legislative framework that establishes criteria for defining environmentally sustainable economic activities in the European Union. It provides a detailed classification system for activities that significantly contribute to climate change mitigation and adaptation. The Act is a key component of the EU's efforts to promote green finance and sustainable investment by providing clarity on what constitutes an environmentally sustainable economic activity, thereby guiding investment decisions and encouraging green economic growth. Learn more

Sustainability is no longer a choice but a necessity for businesses and governments worldwide. The latest sustainability regulations and standards serve as guidelines to ensure that we transition to a more sustainable future. As these regulations continue to evolve, staying informed and taking proactive measures will be crucial for organisations seeking to thrive in the increasingly eco-conscious world and ERM Libryo can help. 

Automated tracking for sustainability regulations

ERM is the world’s leading sustainability consultancy and owner of the ERM Libryo digital regulatory compliance platform that ensures you know the regulations applicable to your business and each individual operation. ERM and ERM Libryo can support your teams on their sustainability journey.

Adhering to sustainability regulations and standards can provide businesses with a competitive advantage, cost reductions, legal compliance, increased market access and better investor and stakeholder relationships. Find out more about the ERM Libryo platform and its benefits here.

FAQs

1. How do sustainability regulations impact businesses?

   Sustainability regulations influence various aspects of business operations, including environmental impact, social responsibility, economic viability, and legal compliance. Understanding and adhering to these regulations is crucial for maintaining competitiveness and reputation in the market.

2. What are some key sustainability standards and regulations to be aware of?

   Familiarize yourself with pivotal regulations like the Paris Agreement, Sustainable Development Goals (SDGs), ISO 14001, and the EU Green Deal, among others. These standards outline requirements for mitigating environmental risks, promoting ethical practices, and achieving long-term sustainability goals.

3. How can businesses stay informed and compliant with evolving sustainability regulations?

   Utilize automated tracking solutions like ERM Libryo to stay up-to-date with regulatory changes and ensure comprehensive compliance across all operations. Partnering with sustainability experts like ERM can further enhance your organization's ability to navigate complex regulatory landscapes effectively.