Environmental, Social & Governance (ESG)

Don’t let the ‘Trump Effect’ make you too comfortable about being able to ignore ESG. ESG factors have become a regular item on boardroom agendas, with businesses increasingly aware that while a failure to address such issues can have significant reputational, legal and financial consequences, the flip side is also true - actively engaging in ESG can significantly increase business value.

At Freeths, our ESG team is on hand to steer businesses, boards, individuals, funds, investors, and other stakeholders through the changing route map of national and regional policies, regulations and frameworks. This includes businesses where support would be helpful on your journey to your net zero goal or to becoming an accredited BCorp.

If you’re not sure where to start or, having started your ESG journey, how to progress it, Freeths ESG Health check tool will provide you with a downloadable report highlighting key areas for improvement and helping you to enhance your ESG strategies. Please visit our ESG page on our website here to register for our ESG questionnaire. 

Environmental  

For more information regarding legal updates on environmental factors, please see our Environmental section here. 

For a snap shot of key developments in sustainability-related regulation and what’s on the horizon, see our 6 monthly Sustainability Horizon Scanner. The horizon scanner doesn’t summarise existing law but rather signposts upcoming changes in summary form. 

You can access the Sustainability Horizon Scanner here. 

Social

The Social agenda for 2026 will be dominated by the significant changes in employment rights legislation in the form of the Employment Rights Act. You can read more about that, and other updates, in our Employment section here.

Governance

From an ESG reporting perspective, businesses need to keep an eye on the following key areas which we discuss further in our Sustainability Horizon Scanner:

• UK Sustainability Reporting (UK SRS) and whether the UK will endorse final versions of the exposure draft of UK SRS for entities to use on a voluntary basis initially.
• The International Organization for Standardization (ISO) and the Greenhouse Gas Protocol (GHG Protocol) announced a partnership to merge their existing standards and to co-develop new standards for GHG emissions accounting and reporting.
• Timelines for the implementation of the Corporate Sustainability Due Diligence Directive (CS3D) which seek to reduce sustainability reporting burdens, but which were put on hold in 2025.
• The anticipated launch of the Corporate New Zero Standard Version 2.0 by the Science Based Targets initiative (SBTi).

For more information regarding legal updates on additional corporate governance matters, please see the following articles in the Corporate section:

• Economic Crime and Corporate Transparency Act 2023 (ECCTA): What You Need to Know in 2026 
• Corporate Governance: Provision 29 and Enhanced Board Accountability 
• Stewardship: final guidance published to accompany UK Stewardship Code 2026 

And the following article in the Clean Energy, Waste & Sustainability section:

• New standards of sustainability reporting incoming for the UK