ESG Focus: UK/EU/International ESG Regulation Monthly Round-Up – April 2026

In this issue:

Chapter 1: UK developments

Chapter 2: EU Developments

Chapter 3: International developments

Chapter 1: UK developments

In the UK, a number of papers and consultations have been launched by the FCA, DEFRA and the HMRC covering areas such as ESG ratings, biodiversity net gain (“BNG”) and UK CBAM. The GHG Protocol also launched a land sector and removals standard for companies that own or control land, purchase or sell products produced on agricultural lands, or have other relevant land-based activities in their value chain (expect forestry).

1. UK ESG Ratings voluntary pilot launched

   The UK Financial Conduct Authority (“FCA”) has launched a voluntary reporting pilot scheme for ESG rating providers. The scheme will be used to inform future regulation and follows December’s consultation. ESG ratings providers are invited to apply to join the pilot before 13 May 2026.

   We understand that the FCA will finalise its regime for ESG ratings providers, with a policy statement in Q4 2026, and rules effective June 2028. Read more on the proposed regulation of UK ESG ratings here.

2. UK DEFRA announces delay to application of BNG to nationally significant infrastructure projects

   On 20 April 2026, the Department for Environment, Food & Rural Affairs (“DEFRA”) published a blog setting out key updates to biodiversity net gain (“BNG”) in England following the publication of their responses to the consultations on improving the implementation of biodiversity net gain for minor, medium and brownfield development and on implementing BNG for nationally significant infrastructure projects (“NSIPs”).

   DEFRA’s blog sets out the changes and when they will be applicable.  These changes include the introduction of a BNG exemption for developments under 0.2ha which will be in force from the end of July 2026. In addition, from November 2026, BNG will apply to NSIPs, the “go live” date has been adjusted to allow developers sufficient time to prepare.

3. Prudential Regulation Authority (“PRA”) publishes Business Plan 2026/27

   On 17 April 2026, the Bank of England published the PRA Business Plan 2026/27.

   The Business Plan does not seem to introduce anything new but refers in a section entitled “Climate Change” to the PRA’s supervisory statement on enhancing banks’ and insurers’ approaches to managing climate-related risks (SS5/25) and the expectation that firms (i) will review their status in meeting these expectations; and (ii) from June 2026 will be able to demonstrate a credible and ambitious timetable to addressing any gaps.

4. GHG Protocol launches Land Sector and Removals Standard (“LSRS”)

   In April 2026, the Greenhouse Gas Protocol (“GHG Protocol”) launched its Land Sector and Removals Standard. The Standard provides land sector-specific requirements and guidance for companies that own or control land, purchase or sell products produced on agricultural lands, or have other relevant land-based activities in their value chain (but not forestry).

   The Science Based Targets Initiative (“SBTi”) requires companies to use the GHG Protocol to set climate targets and will expect businesses with specific land-based activities to apply this standard from 1 January 2027, when the standard comes into effect. 

   Guidance materials are expected to be published in Q2 2026, supporting materials will be posted at the bottom of this page under “Supporting Material for Users” when available.

5. Integrating nature into UK corporate reporting – how should businesses respond to the IPBES business and biodiversity assessment and recent UK national security assessment?

   On 15 April 2026, Despite a range of methods, knowledge and data existing to measure impacts and dependencies of businesses on nature, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (“IPBES”) recently reported that “less than 1% of publicly reporting companies [mention] their impacts on biodiversity in their reports”.

   We look at the urgent rationale for businesses to assess and disclose their nature-related risks, opportunities, dependence and impact on nature and whether and what businesses are already required to disclose nature-related information and what regulation might be coming down the track, with a particular focus on the UK.  Read more here.

6. UK launches consultation on proposed secondary legislation for Carbon Border Adjustment Mechanism (“UK CBAM”)

On 9 April 2026, HM Revenue & Customs published a technical consultation on proposed draft secondary legislation which is due to come into effect on 1 January 2027 alongside UK CBAM being introduced.

The draft secondary legislation includes the legislative requirements associated with the administration of the tax, including but not limited to:

• administrative requirements relating to registration for UK CBAM;
• tax returns and required content;
• reimbursement arrangements;
• weight of UK CBAM goods; and
• record keeping.

This will be of interest to (i) UK importers of goods from the aluminium, cement, fertilisers, hydrogen, and iron and steel sectors and downstream producers that use these goods in their supply chains; (ii) respondents to the previous consultation; and (iii) international partners with an interest in UK CBAM policy.

A policy summary document has been published setting out further information on how UK CBAM will operate. Further details will be included in secondary legislation, notices and GOV.UK guidance.

Chapter 2: EU developments

A number of high level announcements have been made by the EU this month on topics such as the clean energy transition and fuel.  A proposal was also published in relation to the EU ETS Market Stability Reserve. 

1. Joint Committee annual report highlights digitalisation, cyber resilience and sustainable finance as key priorities of 2025

   On 24 April 2026, the Joint Committee of the European Supervisory Authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority, together the “ESAs”) published its Annual Report for 2025. Digitalisation, cyber resilience and sustainable finance were key priorities in 2025.

2. European Commission launches AccelerateEU plan

   On 22 April 2026, the European Commission launched its toolkit “AccelerateEU”, which targets temporary measures to address recent spikes in the prices of imported fossil fuels arising from the crisis in the Middle East. 

   The Commission proposescoordination of Member State measures in relation to refilling underground gas storage, ensuring availability of jet fuel and diesel and oil refinery production capacities, a Fuel Observatory to track transport fuel production, imports, exports and stock levels, and measures aimed at accelerating homegrown clean energy, stepping up the grid system and boosting investment.

3. European Council reconfirms its commitment to the clean transition as the most effective strategy for achieving European strategic autonomy

   On 21 April 2026, the European Council approved conclusions on 'EU energy and climate diplomacy – strengthening sovereignty and advancing the global clean transition'. “Acknowledging the EU’s geopolitical exposure due to its significant reliance on imported fossil fuels – as demonstrated in the context of the Russian war of aggression against Ukraine and by the threats posed by hostilities in Iran and the wider region”. 

   The need for EU foreign policy to support the growth of the European clean tech sector was highlighted and Member States “recognised that the technological and innovation potential of the clean transition can help bolster EU defence readiness and the resilience of militaries”. 

   The conclusions reconfirm that the EU will continue to lead on global climate action and environmental protection.

4. EFRAG consultation on Draft Comment Letter – GRI Pollution Standards

   On 21 April 2026, EFRAG notified that it is seeking feedback on the Global Reporting Initiative (“GRI”) Exposure Drafts for three new Pollution Topic Standards covering Air Pollution, Soil Pollution and Critical Incidents to inform its consultation response to GRI and to strengthen global interoperability. 

   EFRAG’s deadline for feedback is 21 May 2026.

5. European Commission publishes proposal for reform of ETS Market Stability Reserve

On 1 April 2026, the European Commission published a proposed amendment to the European greenhouse gas emission trading system (“ETS”) Market Stability Reserve Decision. Under the current mechanism, all allowances in the reserve above €400 million are invalidated. The proposed amendment would stop that invalidation mechanism, allowing those allowances to be kept as a buffer to support market stability.

The next steps are submission of the draft to the European Parliament and Council through the ordinary legislative procedure. For more information on the ETS see here.

Chapter 3: International developments

This week brought exciting news of the first Transitioning Away from Fossil Fuels conference and a number of announcements affecting the development of nature standards.

1. Transitioning Away from Fossil Fuels conference held in Santa Marta, Colombia

From 24 April to 29 April 2026, Colombia and the Netherlands co-hosted a conference to accelerate transition away from fossil fuels. It was attended by representatives from 56 countries, with Indigenous Peoples and many other civil society and community groups. The conference was borne out of the climate COP held in Brazil, bringing together those countries willing to acknowledge the challenges of climate change but also the costs of inaction¹.

At the conference, the aim was not to develop new targets, but to discuss how to advance and accelerate the implementation of agreed goals to transition away from fossil fuels. Three key themes were discussed: reducing economic dependence on fossil fuels, transforming supply and demand, advancing international cooperation².

The five key outcomes of the conference were:

• A sustained commitment to deliver – the second conference has already been organised for 2027.
• Strengthening connections, avoiding duplication – countries will lead different alliances and initiatives and will connect with the relevant COP30 Activation Group.
• Ensuring complementarity with the UNFCCC existing frameworks and sustaining momentum.
• Channelling collective power through the three established workstreams.
• Using science as our anchor for the future – a new Science Panel for the Global Energy Transition (SPGET) has been developed which is designed to help countries overcome dependence on fossil fuels and develop roadmaps for transition.

The full outcomes of the conference are set out here and further details can be found here.

2. TNFD, GRI and SBTN publish discussion paper seeking feedback on how to incorporate state of nature metrics into the TNFD framework

In April 2026, the Taskforce on Nature-related Financial Disclosures (“TNFD”), the Global Reporting Initiative (“GRI”) and the Science Based Targets Network (“SBTN”) published a paper seeking feedback from market participants on how to incorporate state of nature metrics into their frameworks, standards and guidance for nature-related assessment, disclosure and transition planning and target setting.

Feedback is requested by 4 June 2026.

3. ISSB staff recommend against standalone nature standard

On 22 April 2026, the International Sustainability Standards Board’s (“ISSB”) agreed to propose requirements for nature-related disclosures in the form of an IFRS Practice Statement rather than amendment of IFRS S1 or IFRS S2 or a new ISSB Standard.

The ISSB explained that when a company needs to provide information about nature-related risks and opportunities in accordance with IFRS S1, the Practice Statement would explain how to do this. They argue that this form of standard-setting minimises disruption, which is particularly important because companies and jurisdictions are in the process of implementing and adopting the ISSB Standards. The ISSB aims to publish an exposure draft for comment in October 2026.

4. NGFS note on nature-related risk

On 9 April 2026, the Network of Central Banks and Supervisors for Greening the Financial System (“NGFS”) published a practical toolbox, “2026 NGFS Nature Package”, which builds on the NGFS Conceptual Framework on Nature-related Financial Risks (2024).

The 2026 package includes three notes:

• A technical note on nature-related data showcasing relevant indicators and methods that can be used for the financial analysis of these risks. This shows that nature data can already inform the financial risk analysis.
• A note on nature scenarios providing a picture of current technical discussions aimed at narrowing the gap in modelling and financial risk scenario design, and subsequent recommendations on nature scenario design. It explores the links between nature, climate and the economy.
• A note on the supervision of nature-related financial risks demonstrating concrete examples and tools taken by supervisors to assess nature-related financial risks and proposing a step-by-step approach for supervisors to assess these risks.

The NGFS explains that overall two cross-cutting messages can be taken from this package:

• Data availability, despite complexity, enables action, by supervisors and central banks. While nature-related risks lack a single metric equivalent to CO₂ for climate, existing datasets and indicators (e.g., ENCORE, input-output tables, TNFD frameworks) allow meaningful progress in risk assessment and supervisory practices.
• Existing methodologies and practices can already be leveraged. Tools have been developed in recent years (e.g., system-wide risk mapping, impact measurement using indicators, use of heat maps). These methodologies – some of which are already operational – could be enhanced in the future, particularly regarding nature-related scenarios.

5. Canada establishes Taxonomy and Transition Planning Council

On 8 April 2026, new members of the Canadian Taxonomy and Transition Planning Council were announced. The Council will oversee the development and approval of a new Canadian sustainable finance taxonomy, establishing evidence-based criteria for “green” and “transition” investments. The Council will also oversee the creation of climate transition planning guidance for Canadian companies.

In addition, on 26 March 2026, the Canadian Budget 2025 Implementation Act, No. 1 (Bill C-15) received Royal Assent introducing changes to the Competition Act relating to environmental claims. The changes were introduced to remove reference to claims relating to climate benefits being based “on adequate and proper test” as there were concerns that this requirement led to greenhushing by local companies. The Competition Bureau will update its guidance on Environmental claims and the Competition Act accordingly.

Our global Sustainable Finance & Investment group brings together a multidisciplinary global team that provides clients with best-in-market support. We are following developments relating to ESG regulation, so please get in touch if you would like to discuss.

Stay ahead with timely curated developments, insights and thought leadership on ESG regulation with our ESG Regulatory Alerts tool.

This note is intended to be a general guide to the latest ESG developments. It does not constitute legal advice.

Authored by Emily Julier, Rita Hunter, and Benjamin Garbett.