After years of progress toward consensus on climate risk disclosure, companies face a global regulatory landscape that’s grown in both complexity and scope in 2026.
U.S. and European Union regulators took steps last year that steered them away from reaching common ground on the issue, leading to increased regional fragmentation. However, a growing number of jurisdictions have climate disclosure laws coming online this year that will require corporations to have concrete governance processes in place for the requisite data.
Though companies have been touting their sustainability work less, that has not affected corporate climate disclosures at this point, Domini Impact Investments CEO Carole Laible told ESG Dive.
“We haven't seen a lot of rollback on disclosure; people are continuing to put information out there,” Laible said in an interview. “Are some corporations less motivated to integrate their scope 3 emissions into their sustainability reports? Yeah, maybe. They just probably don't feel as much pressure as they [did] in the past.”
Here’s where the global climate disclosure landscape sits in 2026.
Backtracking in the US and EU
The Securities and Exchange Commission quickly looked to abandon defense of its Biden-era climate-risk disclosure rule in court following President Donald Trump’s inauguration. The agency first asked to pause the case, and — after declining to say whether the rule would be upheld — a federal appeals court judge paused the litigation and stayed the rule, according to a September court filing.
“It is the agency’s responsibility to determine whether its Final Rules will be rescinded, repealed, modified, or defended in litigation,” the September order said.
The SEC rule will remain in limbo, with the case in stasis, until the agency decides to either revisit the rule through typical notice-and-comment or renew its defense in court. The latter is unlikely in the current administration, as SEC Chair Paul Atkins is more broadly focused on rolling back disclosures for U.S.-listed companies.
“The path to public ownership has become narrower, costlier and overly burdened with rules that often create more friction than benefit,” Atkins said in a speech at the New York Stock Exchange last month.
The climate risk disclosure rule is not on the agency’s latest regulatory agenda, which was released shortly before last fall’s court order. Ropes & Gray Partner Michael Littenberg said in a blog the agency “is likely to take steps this year to definitively get rid of its Biden-era climate disclosure rules.”
The European Union underwent its own regulatory rollback in 2025. After the European Commission proposed an omnibus bill in February, legislators spent much of last year working to simplify the bloc’s corporate sustainability reporting laws.
Ultimately, the bloc’s co-legislators reached a political agreement that will raise the employee and revenue thresholds for companies to be covered by the Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive. Lawyers at Ropes & Gray estimated that the agreement will lead to 90% of companies being removed from the CSRD’s scope and 70% excised from the CSDDD’s remit.
The pact has been passed by the European Parliament and awaits approval by the European Council, which is expected early this year. The reporting timeline for the next wave of CSRD reporting companies and the first wave of entities to comply with the CSDDD has been delayed until 2028.
Though companies have prepared to comply with disclosure regulations, there is little incentive for U.S. companies to be proactive on the issue, according to Bruno Sarda, who leads Ernst & Young’s climate change and sustainability services practice for the Americas.
“Companies do not have a new requirement to enhance risk disclosures and, frankly, don't see an incentive to do so,” Sarda said in an interview. “There's not as much appetite for companies to take a leading role in breaking new ground. … The incentives for proactive, comprehensive disclosures have not been as compelling as they might have once looked.”
Disclosure requirements still growing
Despite these shifts from the U.S. and the EU, U.S.-based companies face growing disclosure requirements both at home — with California’s climate disclosure laws somewhat online — and abroad.
California’s climate disclosure laws — Senate Bills 253 and 261 — were set to go into effect this year, and somewhat have. A federal appeals court judge issued a preliminary injunction in November on SB 261, which requires companies with over $500 million in revenue who operate in California to report their climate-related risks. The injunction does not impact enforcement of SB 253, which requires business entities operating in California with annual revenues exceeding $1 billion to annually report their greenhouse emissions.
Despite the pause in implementation of one of the state’s climate laws, 94 companies have voluntarily submitted such reports to the California Air Resources Board’s public docket as of Jan. 29, including Lime, Pacific Gas & Electric, Schneider Electric and Frontier Airlines. CARB, which is the state agency tasked with implementing the laws, is only looking for companies to make a good faith effort to report their climate-related financial risks and greenhouse gas emission this year, according to enforcement notices it has issued.
CARB is scheduled to adopt the regulations for SB 253 and 261 at a board meeting in early February, though the court case that spawned the injunction will likely stretch on.
The year also brings the possibility that other states adopt some form of climate disclosure regulations for companies. New York reintroduced climate disclosure laws that mirrored California’s in its 2025 legislative session and passed a law in December requiring certain heavy-emitters in the state to disclose greenhouse gas emissions.
New York’s emissions reporting law will apply to many waste facilities, along with any fossil fuel suppliers and electric power companies that emit emissions or import power into the state. Companies expected to comply will need to collect their 2026 emissions data and submit it to the state’s Department of Environmental Conservation by June 2027.
Meanwhile, nearly 40 global jurisdictions have adopted or are planning to adopt a form of the climate disclosures aligned with the International Sustainability Standards Board’s frameworks, according to the ISSB’s jurisdictional working group. The standard-setting body operates under the International Financial Reporting Standards Foundation.
Global climate disclosures regulations are active in the United Kingdom and Mexico, and laws in Australia and Spain are set to go online this year that will require large multinationals to disclose climate-related financial risks for fiscal year 2025.
While the view on ESG regulations varies by jurisdiction, asset owners have largely viewed them as a “net-help,” according to Morningstar Sustainalytics’ 2025 Voice of the Asset Owner survey. The survey received responses from over 500 global asset owners of varying sizes, and 55% of asset owners surveyed consider ESG regulation a net positive.
Among asset owners who found ESG regulations helpful, 61% said they have helped standardize frameworks. The portion of asset owners who find ESG rules helpful for standardization purposes have increased 15 percentage points since 2023 and 8 percentage points since 2024.
A plurality of asset owners (46%) view the regulatory rollbacks in the U.S. and EU as “a step in the wrong direction,” according to Morningstar’s survey. Though, North American asset owners were more likely to see the rollbacks as a positive change (32%) than all other respondents (27%).
Domini Impact Investment’s Laible said that, while her firm has found “that regulation is always helpful,” private enterprise typically fills gaps where the public market is slow to act. As such, investors play a big role in driving what companies report.
“If you do have a lot of investors asking [for information] — and if it goes from a grassroots consumer to the highest level institutional investor — corporations start providing and disclosing that information,” Laible told ESG Dive. “So I think we're still in a good place there. It's not like we've seen half of the S&P 500 all of a sudden stop producing corporate sustainability reports.”
Companies still prioritizing ESG data, governance for evolving landscape
The varied and changing disclosure landscape requires companies to have governance strategies in place to ensure compliance with jurisdictions they operate in. Companies who are used to issuing climate or impact reports have been working to improve the quality of their data in anticipation of mandatory reporting, according to Dexter Galvin, senior vice president of climate for sustainability ratings company Ecovadis.
Take eBay as an example, which updated its climate targets in 2025 and released a transition plan earlier this month. The team that manages the company’s environmental, social and governance policies, including Chief Sustainability Officer Renee Morin, sits in the financial office and reports to the company’s corporate governance and nominating committee. The e-commerce company set up an ESG Disclosure Steering Committee in 2024 to help eBay comply with global reporting standards, according to its transition plan.
“We've seen the writing on the wall with the evolution of disclosure requirements from the European Union, from California, from IFRS and other jurisdictions,” Morin said in an interview. “We then realized we needed a better fit for purpose, and so we've really evolved the ESG Council.”
The company keeps “tight contact and a close eye on what [its] investor audience is looking for in terms of disclosure,” and standards from the ISSB and Global Reporting Initiative have been integrated into the company’s impact reports for multiple years, according to Morin. As such, when jurisdictions adopt or have adopted regulations based on those standards, the company is prepared to expand the boundaries of the data it sought and ensure specific alignment.
“It's not necessarily a big leap or a jump for us, it's more about tweaking the systems in a way that fulfills the requirements and needs of the EU and California and other jurisdictions as well,” Morin said. “I think a lot of companies at this point are looking to level up some of the internal processes and controls around data because of the additional scrutiny that’s in place on when it becomes a regulatory requirement to disclose X, Y or Z.”
In anticipation of growing regulatory requirements, there’s been “a massive shift towards getting higher quality primary data from key suppliers,” Galvin, who also serves as Ecovadis’ climate ambassador, told ESG Dive. Galvin previously helped set up the supply chain program at the Carbon Disclosure Project in 2008 and led CDP’s external-facing activities until November 2024.
Despite some regional pullbacks in the U.S. and EU, Galvin said there is evidence that corporate sustainability work has reached a stage where it can “weather some of the short-term regulatory challenges.”
He said 87% of companies who reported to Ecovadis last year said they were planning to increase sustainability investments in 2025, and pointed to a Boston Consulting Group report that found the “green economy” is now worth over $5 trillion annually and growing.
“The funny thing is, for years, I pointed to the importance of regulatory certainty, and [how] the need for regulatory certainty was so important to guide corporate investment in this space,” Galvin said in an interview. “But actually, I think we may have reached a stage of market maturity.”
