Environmental, social and governance | UK Regulatory Outlook September 2025

UK

Consultation on Welsh deposit return scheme opens 

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Proposal for a restriction on PFAS substances in firefighting foams 

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EU 

European Commission considering a further one-year delay to the EU Deforestation Regulation

It has been reported that the European Commission is considering postponing implementation of the EU Deforestation Regulation (EUDR) by another year, to 30 December 2026. In a letter to the European Parliament dated 23 September, Environment Commissioner Jessika Roswall said a one-year delay is being considered while the Commission addresses issues with the IT system needed to run the EUDR.

No formal decision or announcement has yet been made. 

European Commission launches consultation and call for evidence for upcoming Circular Economy Act 

On 1 August, the European Commission launched a public consultation and call for evidence for the upcoming Circular Economy Act (CEA). The CEA aims to create a single market for secondary raw materials, increase the supply of high-quality recycled materials and stimulate demand for these materials in the EU. It will also focus on addressing e-waste, which is the fastest growing waste stream. 

The consultation focuses on aligning the CEA with other EU initiatives, including the Competitiveness Compass, the Single Market Strategy, and the Steel and Metals Action Plan, and the implementation of relevant recently adopted legislation, such as the Eco-design for Sustainable Products Regulation, the Packaging and Packaging Waste Regulation and the Critical Raw Materials Act.  

The feedback period closes on 6 November 2025 and all feedback can be provided via the online Have Your Say portal. 

EFRAG launches consultation on revised and simplified exposure drafts of European Sustainability Reporting Standards  

On 31 July, EFRAG (formerly the European Financial Reporting Advisory Group) published revised and simplified exposure drafts of the European Sustainability Reporting Standards (ESRS) and has launched a 60-day public consultation survey to gather feedback relating to the critical simplification of the ESPR. 

In March 2025, EFRAG was charged by the European Commission with making sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) more manageable while preserving its relevance and alignment with the European Green Deal. 

To meet this goal, EFRAG has proposed: 

• streamlining the double materiality assessment;
• reducing overlaps across standards;
• clarifying language and structure;
• removing all voluntary disclosures;
• cutting mandatory datapoints (to be reported if material) by 57%; and
• reducing the full set of disclosure (mandatory and voluntary) by 68%. 

These changes resulted in the standards being shortened by over 55% and EFRAG claims they would make the ESRS more accessible and implementable. 

The public consultation on these changes runs from 31 July to 29 September 2025. 

Regulation simplifying and strengthening CBAM formally adopted by European Parliament 

On 10 September, the European Parliament formally adopted a regulation simplifying and strengthening the carbon border adjustment mechanism (CBAM). This regulation forms part of the Omnibus I package of measures aimed at simplifying legislation and reducing bureaucracy throughout the EU. 

The regulation sets a new de minimis mass threshold whereby imports of up to 50 tonnes per importer per year will not be subject to CBAM rules, replacing the current threshold which exempts goods of negligible value. This change will lead to approximately 90% of importers being exempt from the CBAM rules. Despite this, 99% of total CO2 emissions from imports of iron, steel aluminium, cement and fertilisers will still be covered by the CBAM and additional safeguards and anti-abuse provisions will be in place to prevent circumvention of these rules.  

The regulation also brings a simplification to the rules regarding the authorisation process, the calculation of emissions, verification rules and the financial liability of authorised CBAM declarants. 

The regulation was published in the Council Register on 17 September. It updates Regulation 2023/956, which will end its transition phase on 31 December 2025, with the gradual rollout of CBAM certificates commencing on 1 January 2026. 

European Commission launches consultation on revising the current EU energy security framework 

Following a call for action from the European Council in 2024, the European Commission has launched a targeted consultation on revising the current EU energy security framework. The aim of the amended regulations would be to make the EU's energy system more prepared, secure and resilient to current and future energy crises; to ensure cross-sector interaction and cross-border cooperation; to address emerging threats to energy security; and ensure diversification of energy supplies. 

The call for evidence will run until 13 October 2025 with the adoption of a proposal for a regulation expected in the first half of 2026. 

Final PFAS evaluation conclusion to be delivered in 2026 

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Commission published updated guidance on Deforestation-Free Products regulation 

On 12 August 2025, the European Commission published updated guidance on the Deforestation-Free Products Regulations ((EU) 2023/1115). 

The regulations impose mandatory supply chain due diligence requirements on companies putting cattle, cocoa, coffee, palm oil, rubber, soya, and/or wood and related products on the EU market. It prohibits those commodities and products from the EU market unless they are covered by a due diligence statement, are deforestation-free and have been legally produced. 

The Commission's updated guidance attempts to clarify the regulations by providing key definitions, including "placing on the market", "making available on the market", "export" (all Section 1), "negligible risk" (Section 4) and "complexity in the supply chain" (Section 5). It also seeks to clarify product scope, including for packaging materials and waste and recycled products (all Section 7). 

Global plastics agreement negotiations collapse 

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European Parliament adopts new EU rules to introduce EPR for textiles 

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