15 September, 2026
August 2026 — EU AI rules, Singapore’s draft sustainability standards, Australia to amend climate-related financial disclosures
Regulation is shaping the sustainability agenda and changing the way companies do business in different jurisdictions, but keeping pace with constant regulatory updates has become a mammoth task for businesses and investors. In this recurring series, S&P Global Energy Horizons presents key developments to sustainability regulations and standards from around the world.
In this month's update covering July 23 to Aug. 24, we look at the European Commission’s enforcement of rules governing AI use, Singapore’s draft sustainability standards and proposals by Australia to amend some of its climate-related financial disclosure requirements.
EUROPE
EU technical advisor publishes draft sustainability standards for non-EU firms
The European Financial Reporting Advisory Group (EFRAG), which serves as technical advisor to the European Commission, published July 23 draft sustainability standards for non-EU firms in scope of the EU’s Corporate Sustainability Reporting Directive (CSRD). Under amendments to the CSRD, non-EU companies that generate annual revenues in the EU of more than €450 million, or non-EU companies with a subsidiary or branch within the EU with revenues of more than €200 million, are required to report using the European Sustainability Reporting Standards (ESRS). The Commission adopted revised ESRS on July 2026 for all companies in scope of the CSRD. However, the ESRS for non-EU companies differ in that companies would not be required to report on risks, opportunities, resilience and dependencies. Non-EU companies would also have the option to report on EU-related impacts only instead of global impacts. They would also not have to publish a machine-readable report. A request for comment seeks to ascertain whether companies subject to the International Sustainability Standards Board’s (ISSB) two sustainability-related standards would be able to file a single sustainability report using the revised ESRS. The request for comment is open until Oct. 31, 2026. EFRAG said it expects to submit technical advice based on the draft and stakeholder feedback to the Commission by January 2027.
European Central Bank to expand use of climate factor in collateral framework
The Governing Council of the European Central Bank (ECB) said July 24 it would extend the use of climate factors in the Eurosystem collateral framework for non-financial debtor credit claims. It follows the introduction by the ECB in July 2025 of a climate factor for marketable assets issued by nonfinancial corporations. The ECB said it has decided to extend the climate factor to strengthen risk management within the Eurosystem and address transition risks that may affect collateral pledged by counterparties in Eurosystem refinancing operations, including changes in climate policy, technological developments and macroeconomic changes, among others. The maximum additional reduction in the final collateral value, including both bonds and credit claims, will be 5%, the ECB said. The measure will be implemented by the end of 2027 at the earliest, and the climate factor values will be updated annually, the ECB said.
European Commission enforces AI rules, new transparency requirements
As of Aug. 2, the European Commission’s AI Office, along with national authorities of EU member states, started enforcing the EU’s Artificial Intelligence (AI) Act, a legal framework which addresses risks related to AI. Under the rules, providers of general-purpose AI models are required to address risks related to chemical, biological, radiological and nuclear incidents, loss of control, cyber offence, harmful manipulation and threats to fundamental rights. The rules also oversee risks to European cybersecurity and to AI acting outside human control, the Commission said. Regulators will also seek to enhance transparency by requiring providers of chatbots and other interactive AI systems to make it clear to users that they are dealing with AI, not a human. The rules also require AI-generated images, videos or audio to be labelled. AI-generated or altered content will have to include machine-readable marks to facilitate detection, the Commission said.
UK regulator issues climate guidance for mortgage providers and property insurers
The UK Financial Conduct Authority (FCA) published guidance Aug. 4 on how mortgage providers and property insurers can adapt and build resilience to physical climate risks, as such risks can result in insurance markets functioning less effectively and make it harder to price risk accurately. The FCA said climate-related risks may affect the value and cost of insurance and may need to be taken into consideration when insurers are assessing fair value. Insurers should also consider supporting customers when deciding not to renew insurance because of climate risks. It also said mortgage lenders should consider how climate risks are affecting lending decisions and property values as well as how changes in the availability and affordability of property insurance could affect future mortgage lending. Firms may also want to consider new ways of managing climate risks, the FCA said, noting that catastrophe bond issuance is growing, transferring risk from insurers to investors. The regulator also said climate adaptation can create opportunities, and that investment, product design and risk management can build resilience to physical risks.
European Commission launches three calls for evidence on packaging regulation
The European Commission launched Aug. 14 three calls for evidence with regards to the recycling requirements related to its Packaging and Packaging Waste Regulation, which applies across the EU from Aug. 12. The first call for evidence seeks comment on an implementing act establishing uniform rules across EU countries to put into place the requirements for recycled content in plastic packaging. The second call for evidence seeks comment on a delegated act that would set the sustainability criteria for plastic recycling technologies. The third call for evidence seeks comment on an implementing act establishing a methodology that would ensure that plastic materials collected or recycled in non-EU countries are assessed, verified and certified in an EU equivalent way. The Commission plans to adopt the delegated and implementing acts in the fourth quarter of 2026. Feedback periods for the three calls for evidence run until Sept. 12, 2026.
UNITED STATES AND CANADA
California proposes modifications to emissions reporting regulation
The California Air Resources Board (CARB) opened a comment period July 27 on proposed changes to its corporate climate disclosure regulations following a decision in June to delay the emissions reporting deadline. The proposals clarify the definitions of which companies would be subject to the regulation; when and how fees should be paid; and that reports may be consolidated at the parent company level. They also underscore that Scope 3 emissions reporting is not required for the 2026 reporting year. The modifications also confirm CARB’s plan to push back the first reporting deadline for Scope 1 and Scope 2 emissions to Nov. 10, 2026, from Aug. 10, 2026.
ASIA-PACIFIC
Singapore standard setter publishes draft sustainability reporting standards
Singapore’s Accounting and Corporate Regulatory Authority (ACRA) published July 27 draft sustainability reporting standards for listed and large non-listed companies. The standards are aligned with those of the ISSB. The Singapore Financial Reporting Standards (SFRS) S1 is based on the ISSB’s IFRS S1, which requires companies to report on sustainability risks and opportunities, and Singapore’s SFRS S2 is aligned with the IFRS S2 climate standard. ACRA said only its climate standard would be mandatory. Reporting on Scope 3 emissions, or the emissions throughout a company’s value chain, would remain voluntary. Singapore delayed the application of its ISSB-related reporting standards for some listed companies in the third quarter of 2025. All listed companies have been required to report some ISSB-related disclosures, including Scope 1 and Scope 2 emissions, as of Jan. 1, 2025. A consultation on the draft standards closes on Oct. 25, 2026.
Thai regulator issues draft disclosure requirements for sustainable funds
Thailand’s Securities and Exchange Commission published Aug. 7 draft regulations to enhance sustainability-related disclosure requirements for investment funds specialized in sustainable and responsible investing. The proposed amendments would require sustainability-focused funds that invest in listed companies participating in a value creation support program organized by the Thai stock exchange to disclose information on those investments and companies’ progress in meeting the goals of the program. Fund managers would be required to disclose what percentage of a fund's net asset value is invested in such companies and to what extent they have engaged with the companies over the past year.
Australia proposes amendments to climate-related financial disclosures
The Australian government proposed Aug. 24 a series of changes to legislation governing climate-related financial disclosures designed to reduce compliance costs and provide clearer guidance for companies. Under current legislation, companies are required to transition from limited to reasonable assurance as of July 1, 2030, and the government is seeking feedback on whether to maintain that deadline, delay that transition to 2035 or only require reasonable assurance for specific reporting metrics. The proposals also include clarifying disclosures on value chain reporting, including providing companies with additional guidance on what constitutes a reasonable request for information from entities in a reporting company’s value chain. The feedback period is open until Oct. 2, 2026.
LATIN AMERICA AND THE CARIBBEAN
Chile’s financial regulator delays mandatory sustainability disclosures by one year
Chile's financial regulator, la Comisión para el Mercado Financiero (CMF), said July 27 it has postponed mandatory application of ISSB-aligned sustainability standards by one year to give companies additional time to prepare for the standards. Chile adopted the standards as of Jan. 1, 2026, and initially companies were to submit their first report in 2027 based on 2026 financial information. The delay will give companies more time to prepare their corporate governance structures, systems, and procedures to enable them to gather the information required by the standards, the CMF said. The decision is also aimed at ensuring corporations incorporate international best practices in a way that also considers the characteristics of the local market, the regulator said. Companies may still submit reports on a voluntary basis using existing rules, and those that do so will be invited to participate in technical feedback sessions where they will receive an assessment of their reports, the CMF said.
This piece was published by S&P Global Sustainable1 and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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