Sustainability Legislations to Look Forward to in 2025 

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In 2025, the global sustainability legislation landscape is about to undergo significant changes as new laws are set to alter how companies handle their environmental responsibilities. Businesses face a crucial time to innovate and adapt as legislatures worldwide impose stricter restrictions and call for increased accountability. This presents a strategic opportunity for companies to rethink their approach to sustainability and impact on the environment. Here is a list of important legislation companies will come across or submit reports to in 2025.  

Corporate Sustainability Reporting Directive (CSRD):

The CSRD entered into force on 5 January 2023. According to the Directive, large and listed companies in the EU and non-listed companies that generate turnover exceeding EUR 150 million in the EU must report on sustainability and how their operations impact society and the environment. The reporting follows the European Sustainability Reporting Standards (ESRS). In 2025, the first set of companies that come under the scope of the CSRD should publish their reports with the data collected from the 2024 financial year 

CSRD Transposition: 

The EU member states were supposed to transpose the CSRD into national laws by 6 July 2024. However, 17 member states (Belgium, Czechia, Germany, Estonia, Greece, Spain, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, and Finland) failed to notify the European Commission about the national measures taken to transpose the Directive. The Commission sent formal notices to these member states in September.  

Countries that have transposed the CSRD into national legislation as of December 2024 are Denmark, Finland, France, Hungary, Ireland, Liechtenstein, Lithuania, Norway, Romania, Slovakia, Sweden, Bulgaria, Croatia, and Italy 

EU Taxonomy:

The EU Taxonomy is a classification system that aims to help businesses and investors identify environmentally sustainable economic activities. These activities are defined as those that “make a substantial contribution to at least one of the EU’s climate and environmental objectives, while at the same time not significantly harming any of these objectives and meeting minimum safeguards.” 

The six climate and environmental objectives put forward by the regulation are: 

  1. Climate change mitigation 
  2. Climate change adaptation 
  3. Sustainable use and protection of water and marine resources  
  4. Transition to a circular economy 
  5. Pollution prevention and control 
  6. Protection and restoration of biodiversity and ecosystems 

EU Taxonomy and CSRD

Businesses covered by the CSRD must disclose in their annual reports the extent to which their operations meet the Taxonomy delegated acts (Taxonomy-alignment) requirements and are covered by the EU Taxonomy (Taxonomy-eligibility). Other businesses that CSRD does not cover may voluntarily reveal this information to obtain sustainable funding or other business-related purposes. 

Infographics explaining the relationship between CSRD and the EU Taxonomy.

EU Taxonomy and CSRD. Own illustration based on EU Commission Factsheet. 

The Omnibus Simplification Process: 

On 8 November 2024, Ursula von der Leyen, President of the European Commission, addressed the possibility of consolidating the CSRD, EU Taxonomy and the CSDDD (Corporate Sustainability Due Diligence Directive) by introducing an Omnibus Regulation. This announcement has caused confusion about how the potential consolidation will affect the reporting landscape in the EU in the coming years. Since the national transpositions of both the CSRD and the CSDDD are ongoing in many member states, many experts have cited this move as unnecessary. However, the “Omnibus Simplification Package” is scheduled for the Commissioner College meeting on 26 February 2025.  

Carbon Border Adjustment Mechanism (CBAM):

CBAM is the EU’s tool for setting a fair price on carbon emissions from producing carbon-intensive goods entering the EU and promoting cleaner industrial output in non-EU countries. The transitional phase of CBAM is from 2023 to 2025. 

In 2025, the following changes will be implemented in the CBAM framework: 

  • Only the EU reporting method will be accepted for emissions data.  
  • For complex goods, estimates, including default values, can only be used if they account for less than 20% of total embedded emissions.  
  • A new section of the CBAM Registry will allow non-EU installation operators to securely upload and share their emissions data with reporting declarants, who can then automatically populate their CBAM reports with this information.  
  • Registration for installation operators will open on 1 January 2025.  

EU Deforestation-free Products Regulation (EUDR):

The EUDR aims to ensure that goods and products sold in the EU or exported from the EU do not contribute to deforestation or forest degradation. Additionally, it needs to be assured that the products have been made in compliance with legislation in the country of production and are safeguarded by due diligence statements. Cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products are under the scope of EUDR. Originally, companies were supposed to start implementing the Regulation on 30 December 2024. However, after adopting the European Commission’s proposal to delay the implementation, large and medium-sized businesses must abide by the EUDR starting 30 December 2025 

Ecodesign for Sustainable Products Regulation (ESPR):

The ESPR aims to improve sustainability and reduce the environmental impact of all products placed in the EU market. It entered into force on 18 July 2024 by replacing the Ecodesign Directive. The Regulation introduces a digital identity card for the products known as the “Digital Product Passport” (DPP). The DPP will contain electronically accessible information about a product’s sustainability, circularity and regulatory compliance. Businesses and customers can use it to make informed decisions regarding the product. The first ESPR working plan is expected to be adopted and published in the first half of 2025.  

Infographics explaining the attributes of the Digital Product Passport.

Attributes and benefits of the Digital Product Passport. 

Global trend in mandatory sustainability reporting:

In a significant global shift towards compulsory sustainability reporting, several countries are transitioning from voluntary to legally required ESG disclosures. 

  • Australia has taken a decisive step by passing the Treasury Laws Amendment Bill, which received Royal Assent on 17 September 2024. This bill mandates sustainability reporting from 2025. 
  • The UK Sustainability Disclosure Standards (SDS) are expected to be adopted in 2025. The SDS aim to provide a comprehensive framework for companies to report sustainability-related risks and opportunities, aligning with international standards while being tailored to the UK context. 
  • Canada is set to adopt sustainability reporting standards based on the International Sustainability Standards Board (ISSB) framework in 2025. The Canadian Sustainability Standards Board (CSSB) has proposed CSDS 1 and CSDS 2, which align with IFRS S1 and S2 but include country-specific modifications.  
  • In Japan, the second stage of sustainability disclosure rules is expected to be effective no later than April 2025. These rules will be drafted by the Sustainability Standards Board of Japan (SSBJ). While mandatory effective dates have not been set, companies may voluntarily apply the standards beginning in or around April 2025. SSBJ’s sustainability disclosure standards are expected to be consistent with the ISSB standards.  

The sustainability legislation set to take effect in 2025 represents a significant step forward in our collective efforts to combat climate change and promote responsible business practices. As these new legislations come into play, companies must adapt quickly to meet the evolving requirements. Establishing relevant data collection methods will help businesses that fall under their scope to stay ahead of the curve.  

As legislation becomes more stringent, businesses face the critical challenge of collecting accurate and comprehensive data from their supply chains. Our solution, ImprintX, addresses the complexities of supplier engagement and data collection that many companies struggle with. ImprintX streamlines the often arduous process of gathering sustainability data by guiding suppliers through a step-by-step approach. This not only saves valuable time for businesses but also allows them to focus on creating meaningful impact