The 2025 timeline of sustainability deregulation

In 2025, sustainability regulation hit the 'reset' button. The global focus shifted sharply away from adding new rules and toward cutting the red tape that many felt was stifling strategic growth. 

It was a year defined by the phrase 'less is more', as regulators refined sustainability frameworks to ensure they were effective without being exhaustive. While there were dozens of major shifts, we’ve narrowed it down to one essential headline per month to tell the story of this landmark year.

January: The Franco-German challenge

Germany and France issued formal demands to modify current sustainability regulations. German Chancellor Olaf Scholz called for a two-year postponement of Corporate Sustainability Reporting Directive (CSRD) reporting, while France advocated for an indefinite delay of the Corporate Sustainability Due Diligence Directive (CSDDD), arguing that current requirements impose burdens that outweigh their economic benefits.

February: The Omnibus proposal

The European Commission (EC) introduced the Omnibus package to simplify the CSRD, CSDDD and EU Taxonomy Regulation. The goal was to reduce administrative burdens by 25%, specifically lowering reporting requirements for SMEs and introducing ‘small-midcap’ concessions.

March: The PROTECT USA Act

US Senator Bill Hagerty introduced the "PROTECT USA" Act, designed to shield American companies from the extraterritorial reach of the EU’s CSDDD. The Act would prohibit compliance for sectors like agriculture and energy, viewing foreign due diligence as an affront to US sovereignty.

April: Abolishing the German Supply Chain Act

Germany’s new coalition government agreed to immediately abolish the German Supply Chain Act (LkSG), replacing it with the eventual implementation of the EU CSDDD.

May: UK Sustainable Disclosure halted

The UK’s Financial Conduct Authority (FCA) halted its proposal to extend Sustainability Disclosure Requirements (SDR) to portfolio managers. Industry feedback cited a need for more time and greater clarity on how these ‘SFDR-style’ rules would apply to wealth management.

June: CBAM simplification

EU negotiators agreed to simplify the Carbon Border Adjustment Mechanism (CBAM). A new threshold of 50 tonnes per importer per year will exempt roughly 90% of importers (mostly SMEs) while still covering 99% of relevant CO2 emissions.

July: UK abandons Green Taxonomy

HM Treasury officially stopped the development of a UK Green Taxonomy. Consultation showed that only 45% of respondents saw value in the framework, with many preferring alternative standards like the UK Sustainability Reporting Standard (UK SRS).

August: Investigation into ESG organisations

Florida’s Attorney General (AG) launched an investigation into CDP and the SBTi, alleging potential antitrust violations. The AG referred to these climate reporting bodies as a "climate cartel" that may be misrepresenting data objectivity.

September: Singapore delays mandatory reporting

Citing an "uncertain global economic landscape", Singapore regulators significantly delayed mandatory reporting. Scope 3 reporting is now voluntary until further notice, and requirements for large non-listed companies have been pushed back to 2030.

October: New Zealand scales back scope

New Zealand announced plans to narrow its climate disclosure rules. The reporting threshold for listed companies will rise from 60 million NZD to 1 billion NZD, and personal liability for directors who breach reporting rules will be removed to boost market competitiveness.

November: SFDR overhaul

A EC draft proposed replacing Sustainable Finance Disclosures Regulation (SFDR)’s Article 8 and 9 labels with three new categories: Sustainability Objective, Transition, and Integration. The plan also scraps entity-level PAI disclosures, cutting industry costs by an estimated 56 million EUR annually.

December: Final Omnibus text published

The year concluded with the final EU Omnibus text, which narrows the CSDDD scope to companies with over 5,000 employees and 1.5 billion EUR in turnover, while the CSRD scope is now set for EU companies with more than 1,000 employees and 450 million EUR in turnover. Crucially, the final text removes the mandatory obligation to implement a climate transition plan and postpones full CSDDD implementation to July 2028.