Navigating sustainability legislation: What your company can do right now to prepare for 2026 and beyond

Companies that proactively adapt to emerging sustainability regulations gain significant competitive advantages: reduced compliance costs, enhanced stakeholder trust, and stronger market positioning. As California pushes forward new climate disclosure laws and Europe refines its Corporate Sustainability Reporting Directive (CSRD), organizations face a critical strategic choice: wait and see, or use this period to build robust, future-proof reporting systems. 

In this article, we argue that, right now, companies have a unique window of opportunity. Timeline extensions in Europe and phased implementations in the U.S. provide breathing room—not for delay, but for considered, intentional preparation. Businesses that act now can transform regulatory requirements into operational improvements and market differentiation. 

This article examines four major regulatory developments reshaping global sustainability reporting: California's climate-related disclosure laws, the reformed CSRD, the UK's alignment with international standards, and the evolution of the Energy Savings Opportunity Scheme (ESOS). Understanding how these frameworks intersect reveals a range of actions that companies can take today to leverage these developments to their advantage. 

U.S. Leadership through California 

California's groundbreaking climate disclosure laws (SB 253 and SB 261) are setting new national standards in sustainability reporting. Under SB 253, companies must provide annual disclosure of Scope 1, 2, and 3 emissions following the GHG Protocol, with first emissions reports tentatively due by June 30, 2026. Complementing this, SB 261 requires biennial reporting of climate-related financial risks aligned with TCFD or ISSB frameworks, with initial reports due January 1, 2026. The California Air Resources Board (CARB) plans to establish a public docket from December 2025 through July 2026 for entities to post their report links in compliance with SB 261.  

Significantly, as of October 15, 2025, CARB posted a notice of delayed rulemaking for the fee provisions and implementation deadline for SB 253, stating that initial rulemaking will be pushed out to Q1 2026. Despite potential changes to SB 253’s implementation, the initial deadline for SB 261 compliance remains in effect for January 1, 2026. CARB plans to release more information on key compliance pieces in the near term, such as definitions for revenue thresholds and “doing business in California.” As CARB continues to shed light on the nuances and specific details of the disclosure laws, it is vital that organizations monitor and stay informed of potential changes and associated implications for business strategy.  

CARB's comprehensive framework requires organizations to detail their governance structure, risk assessment processes, and management oversight. Companies must explicitly state which reporting framework they're following and provide justification for any excluded disclosures. While GHG emissions disclosure remains outside SB 261's scope to avoid duplication with SB 253, organizations must still provide comprehensive climate risk reporting.  

CARB has indicated some leniency in first-year enforcement for companies demonstrating good faith compliance efforts. However, companies should not rely on this discretion. Instead, they should focus on building robust compliance systems. 

CSRD: Strategic advantage in delay 

The European Commission is attempting to significantly streamline the CSRD through the "Omnibus" simplification package. This package proposes a reduction in mandatory data points by 57% and overall report length by 55%. This reform extends implementation to 2028 for newly in-scope companies, while enhancing alignment with ISSB standards to improve global compatibility. The European Financial Reporting Advisory Group (EFRAG) is due to provide final technical advice by November 30, 2025, with the European Council set to adopt regulations in mid-2026 for fiscal year 2027 reporting. 

The reforms also affect related initiatives, including the Corporate Sustainability Due Diligence Directive (CS3D), which has been delayed to July 26, 2028. CS3D's scope has been refined to focus on the largest businesses, equating to those with 5,000 or more employees and €1.5 billion in net turnover.  

In late October, the European Parliament voted to reject the existing Omnibus package, highlighting wide-ranging tensions around the EU’s sustainability laws. Yet while this setback brings further uncertainty to the direction and timeline for CSRD, companies would be well advised to continue to prepare for general disclosure requirements around governance, strategy, risk management, and metrics and targets as global legislation converges on this approach. Forward-thinking organizations can use both planned and unplanned legislative delays to align voluntary disclosures with future requirements, developing robust data collection systems before they become mandatory. 

UK Standards: Global harmony? 

The UK's emerging Sustainability Disclosure Standards (U.K. SRS) mark a significant shift toward international alignment. Built on the International Sustainability Standards Board (ISSB) framework already adopted by 36 jurisdictions, these standards emphasize comprehensive sustainability risk reporting and climate-specific disclosures. This alignment signals a move toward globally consistent reporting, simplifying compliance for international operations while enhancing comparability for investors and stakeholders. 

For businesses, these standards may imply significant operational changes. Companies will need to strengthen board oversight of sustainability matters, integrate climate considerations into governance structures, and expand their data collection capabilities. Organizations currently reporting under Streamlined Energy and Carbon Reporting (SECR) should prepare for more detailed disclosure requirements, including enhanced scenario analysis and specific climate-related metrics.  

In a practical concession to implementation challenges, the U.K. SRS states that organizations can adopt a climate-first approach for the initial two years before expanding to broader sustainability matters. If endorsed, voluntary reporting will begin in autumn 2025, with thresholds for mandatory reporting and implementation timelines pending separate consultation.  

ESOS Evolution 

The U.K.’s Energy Savings Opportunity Scheme (ESOS) continues to evolve in support of net-zero goals, though net-zero considerations have been postponed to Phase 5 (2027-2031). The scheme now features annual energy efficiency reporting requirements that align closely with Streamlined Energy and Carbon Reporting (SECR), creating a more cohesive approach to energy management. Organizations can voluntarily adopt PAS 51215 standards for compliance, providing a structured pathway for energy management and emissions reduction. This integration of energy efficiency with broader sustainability goals reflects the increasing connection between operational performance and climate commitments, while the enhanced focus on measurable metrics drives tangible business improvements. 

First Mover Advantage 

With California’s incoming disclosure laws, CSRD's revised reporting scope, and the UK's move toward ISSB alignment, organizations face a complex yet navigable path forward. Analysis of these frameworks reveals significant overlap in their core requirements: all demand robust data collection systems, clear governance structures, and comprehensive risk assessment capabilities. By focusing on these common elements, companies can build foundations that satisfy multiple frameworks simultaneously. 

Based on these shared requirements, four key actions emerge as essential preparation: 

• Assess current capabilities. Start with a thorough evaluation of existing sustainability reporting processes, data collection systems, and governance structures. Identify gaps against upcoming requirements. 
• Build data infrastructure. Develop robust systems for collecting and managing sustainability data. Focus on quantitative metrics that align with both CSRD and ISSB requirements. 
• Strengthen governance. Enhance board oversight of sustainability matters and establish clear lines of responsibility for sustainability reporting. 
• Begin voluntary disclosure. Use current frameworks to start reporting on key metrics voluntarily. This provides valuable practice and demonstrates leadership to stakeholders. 

Wrapping Up 

Legislative shifts in sustainability reporting are not just regulatory hurdles—they are an opportunity to build more resilient, transparent, and future-proof organizations. While timelines may have shifted, the direction of travel is clear: better data, clearer disclosures, and more strategic alignment with climate and sustainability risks. 

Firms that look ahead of the curve stand to benefit from reduced compliance costs, better stakeholder relationships, and competitive differentiation. Organizations that act now can develop thoughtful, integrated approaches rather than rushing to meet deadlines. Most importantly, they can turn these new requirements into opportunities for operational improvement. 

How Trio Can Help 

Trio’s compliance experts can help your firm develop tailor-made readiness assessments to identify reporting gaps, scenario analysis workshops to evaluate climate risks, and implementation support for enhanced governance frameworks. From building efficient data collection systems, training teams on new requirements, and developing robust reporting processes, we ensure that businesses not only meet their compliance requirements but transform those standards into a cohesive strategic advantage.