Climate and Energy: EU Policy and Regulation Update for 19 March 2026
March 19, 2026
As policy and regulatory landscapes evolve, this publication will provide insights to navigating emerging risks and opportunities in the energy transition. Read previous issues here.
- SDSN releases the 2026 Europe Sustainable Development Report.
- European Commission requests technical advice from ESAs on Taxonomy Disclosures Delegated Act.
- Council of the EU adopts amendments to the EU Climate Law.
- Frank Elderson from ECB calls on the importance of international cooperation for managing nature-related risks.
- ESMA publishes findings from the 2025 Call for Evidence on the retail investor journey.
- EIOPA launches consultation to inform its report on integrated data collection.
- Paris Judicial Court rules against the Yves Rocher Group under the French Duty of Vigilance Law.
- German Court Prohibits a Pan Manufacturer from Advertising Features of its Products that are Required by Law Without Labeling them as such.
- Consob establishes selection criteria for the oversight over financial and ESG reporting.
- Italian legislative decree transposing the Greenwashing Directive published in the Official Gazette.
European Union/International
26 February 2026 [International] – SDSN releases the 2026 Europe Sustainable Development Report
The United Nations Sustainable Development Solutions Network (SDSN) has released its annual Europe Sustainable Development Report [available here], which assesses the progress of European countries towards achieving the Sustainable Development Goals (SDGs). The first part of the report examines SDG performance, commitment and leadership across Europe. It concludes that European countries continue to lead globally in terms of sustainable development, accounting for 19 of the top 20 positions on the global SDG Index. However, it also highlights major SDG challenges in Europe across many dimensions of sustainable development and notes that SDG progress is uneven among European countries. The second part of the report presents expert contributions on three thematic areas: integrated governance for climate neutrality; estimating fair levels of GHG emissions from agriculture for the EU to 2050; and the interactions between the bioeconomy and the SDGs.
5 March 2026 [EU] – European Commission requests technical advice from ESAs on Taxonomy Disclosures Delegated Act
The European Commission invited the European Supervisory Authorities (ESAs) to develop technical advice to inform the review of the Disclosures Delegated Act (Delegated Regulation (EU) 2021/2178) under the Taxonomy Regulation (Regulation (EU) 2020/852) [available here]. This review is aimed at addressing several implementation issues that were not resolved by the Quick Fix Omnibus Delegated Act (Commission Delegated Regulation (EU) 2026/73). Specifically, the ESAs are invited to provide technical input on the use of OpEx for the computation of the key performance indicators (KPIs) of financial institutions and on group-level taxonomy reporting. In addition, each ESA is invited to provide input on the following specific areas:
- ESMA: broadening the scope of the OpEx KPI denominator, reference to existing accounting standards for OpEx KPI, and increased flexibility in the OpEx reporting;
- EBA: limiting the EC and Fees KPI to capital markets-related activities, connecting the Trading Book KPI to market liquidity, narrowing the ‘other services’ KPI of investment firms, and providing a five-year grandfathering period for financial exposures;
- EIOPA: a revised methodology for Taxonomy-assessment of underwriting activities and the inclusion of climate-related perils in underwriting KPI.
The ESAs are expected to finalize their advice by October 2026. The EC then aims to adopt any amendments to the Disclosures Delegated Act in the first quarter of 2027, which would enter into force in the third quarter of 2027.
5 March 2025 [EU] – Council of the EU adopts amendments to the EU Climate Law
The Council of the EU has formally adopted a Regulation amending the European Climate Law (Regulation (EU) 2021/1119) [available here]. This follows the European Parliament’s adoption of the Regulation in the first reading on 10 February 2026 [see our previous edition, here], which itself followed an informal trilogue agreement on a compromise text reached in December 2025. The revised Regulation will soon be published in the Official Journal of the European Union and will enter into force 20 days after publication.
9 March 2026 [EU] – Frank Elderson from ECB calls on the importance of international cooperation for managing nature-related risks
Frank Elderson, member of the Executive Board of the ECB and vice-chair of the Supervisory Board, delivered opening remarks at the Network for Greening the Financial System (NGFS) Annual Plenary Event on incorporating nature into supervisory practices [available here]. Mr. Elderson emphasized that nearly 75% of euro area bank lending is directed toward firms that depend heavily on at least one ecosystem service and noted that, if current trends continue, business revenues will be increasingly affected, which will impair loan repayments and weigh on bank balance sheets thereby endangering financial stability. He added that, since 2020, the ECB has expected supervised banks to manage not only climate risks, but also material nature-related risks. While progress has been made — with 75% of banks now using quantitative approaches to assess nature-related risks, up from nearly 40% in 2022 — most banks still do not translate their materiality assessments into concrete risk management responses. Mr. Elderson noted that ECB analysis identifies water-related risks as the most urgent threat, with surface water scarcity alone potentially putting up to 24% of the euro area’s economic output at risk. He called on central banks, supervisors, banks, and the research community to collaborate closely, guided by the latest scientific evidence, to develop robust practices for addressing nature-related risks and identified the NGFS as the key forum for consolidating these efforts and maintaining the resilience of financial systems in the face of the accelerating nature crisis.
12 March 2026 [EU] – ESMA publishes findings from the 2025 Call for Evidence on the retail investor journey
The European Securities and Markets Authority (ESMA) published its findings from the 2025 Call for Evidence on the retail investor journey [available here]. The report outlines a number of actions and operational improvements that ESMA intends to implement to make it easier for retail investors to access suitable investment opportunities. These improvements include simplifying the MiFID II requirements on sustainability preferences. ESMA notes that respondents highlighted difficulties clients face in understanding and articulating their sustainability preferences in practice. Difficulties identified include complex terminology, distinguishing between product groups, mapping preferences to available products, and the limited availability of products that match clients’ preferences. Respondents further emphasized that financial advisors play an essential role in bridging these understanding gaps. Among its follow-up actions, ESMA will support the European Commission in simplifying and improving the MiFID II requirements on sustainability. This includes: (i) significantly simplifying the definition of sustainability preferences and linking them to new product categories developed under the SFDR review, where possible; (ii) reducing the operational complexity across the entire cycle of collecting, adapting, and updating client sustainability preferences; and (iii) supporting financial education efforts on relevant sustainability topics.
13 March 2026 [EU] – EIOPA launches consultation to inform its report on integrated data collection
The European Insurance and Occupational Pensions Authority (EIOPA) has launched a consultation on potential inefficiencies, overlaps and inconsistencies in regulatory reporting and disclosure requirements, and on possible solutions to address them [available here]. The consultation seeks feedback from stakeholders on sustainability reporting and disclosure obligations applicable to insurers and Institutions for Occupational Retirement Provision (IORPs), including under the Solvency II Directive, the IORP II Directive, the Corporate Sustainability Reporting Directive (CSRD), the Sustainable Finance Disclosure Regulation (SFDR), and the EU Taxonomy Regulation, as applicable. The consultation is open until 10 June 2026 and will inform EIOPA’s final report to the European Commission pursuant to Article 35(12) of the revised Solvency II Directive.
France
12 March 2026 [France] – Paris Judicial Court rules against the Yves Rocher Group under the French Duty of Vigilance Law
The Paris Judicial Court issued a ruling [available here] against Laboratoires de Biologie Végétale Yves Rocher (LBYR), the parent company of the Rocher Group, based on a claim filed by former employees of a Turkish subsidiary, the Turkish trade union Petrol-İş, and the French associations Sherpa and ActionAid pursuant to the French Duty of Vigilance Law. Because the Turkish subsidiary was no longer part of the group after being sold in 2024, the plaintiffs limited their claim to compensation for damages allegedly suffered under Article L.225-102-2 of the French Commercial Code. In substance, the Paris Judicial Court ruled as follows:
- Applicable law: The Court rejected LBYR’s motion to dismiss based on the statute of limitations under Turkish law and found that French law applied. The Court held that the French legislature had clearly intended the duty of vigilance provisions to apply mandatorily to damage suffered in France or abroad, consistent with international standards and the EU Corporate Sustainability Due Diligence Directive (CSDDD).
- Standing: The Court held that the 72 employees who had accepted a settlement with LBYR regarding the same harm no longer had a legal interest in bringing the claim.
- Merits:
- Liability: The Court found that LBYR failed to fulfil its obligations when drafting the risk mapping sections of its 2017 and 2018 vigilance plans because no analysis of risks related to group subsidiaries was included, and the plans were limited solely to suppliers and high-risk purchases. The Court further held that this failure to develop an adequate risk map constituted, in and of itself, a breach of the obligations set forth in Article L.225-102-1 of the French Commercial Code, as risk mapping is the primary measure upon which all subsequent vigilance measures depend.
- Damage: The Court found that the former employees who brought the claim had established that they had been dismissed on account of their trade union membership and had thereby suffered personal harm.
- Causal link: The Court held that a causal link existed between the deficiencies in the vigilance plans and the harm suffered by the dismissed employees. The Court noted that LBYR had sufficient information to identify the risk of a serious infringement of trade union freedoms and that, by reacting swiftly once the crisis emerged, LBYR demonstrated that it had the power and means to intervene at an earlier stage.
The Court ordered LBYR to pay €8,000 to each of the nine former employees with standing in the proceedings, €40,000 to Petrol-İş, and €1 to each association.
Germany
27 February 2026 [Germany] – German Court Prohibits a Pan Manufacturer from Advertising Features of its Products that are Required by Law Without Labeling them as such
Following a lawsuit filed by Deutsche Umwelthilfe (DUH), a German-based environmental NGO, a German court prohibited a pan manufacturer from advertising that its products did not contain any PFOA, a synthetic and highly persistent chemical, without pointing out that its use was prohibited by law anyway.
DUH argued that the use of PFOA was prohibited by Regulation (EU) 2019/1021 on persistent organic pollutants and its absence in the relevant products therefore required by law. The court agreed with DUH, that through his advertising, the manufacturer gave the false impression that, compared to his competitors, he was committed to environmental protection beyond the legal requirements. After the court shared its preliminary view in the oral hearing, the pan manufacturer acknowledged the claim [see further here, German only].
Italy
19 February 2026 [Italy] – Consob establishes selection criteria for the oversight over financial and ESG reporting
The Italian Financial Market Authority (Consob) has recently published the criteria governing the exercise of its supervisory controls over the annual and interim financial reports and sustainability reporting of listed companies, pursuant to Articles 89-quater and 89-quinquies of the Issuers’ Regulation (Resolution No. 11971/1999, as amended) [available here, in Italian]. In particular, Consob is required to establish, on an annual basis, the risk parameters for identifying the listed companies whose financial and sustainability reports will be subject to review.
These criteria include, among others:
- financial and balance sheet data, including the debt-to-equity ratio, operating profitability, changes in key financial results, revenue from foreign countries and the composition of balance sheet assets;
- reports to Consob submitted by the boards of statutory auditors, auditing firms and sustainability auditors, covering, inter alia, irregularities, negative opinions on financial statements, anomalies in the internal control system and negative assurance opinions on the sustainability reports;
- market and share price information, including share price trends, net short positions and information from financial analysts;
- information received from the Bank of Italy, national and foreign administrative authorities and judicial authorities, as well as material information received from stakeholders;
- ESG factors, including human rights, anti-corruption, climate impact risk, carbon intensity, greenwashing risk and climate transition objectives; and
- other indicators, including Consob inspections and investigations, media information and external data sources estimating the probability of the default of the listed company and the latter’s overall sustainability level.
9 March 2026 [Italy] – Italian legislative decree transposing the Greenwashing Directive published in the Official Gazette
The legislative decree transposing Directive (EU) 2024/825 as regards empowering consumers for the green transition through better protection against unfair practices and through better information was published in the Italian Official Gazette dated 9 March 2026 [available here, in Italian].
The decree governs the use of “green claims”, introducing new protections and enforcement measures against unfair commercial practices under the Italian Consumer Code (Legislative Decree No. 206/2005). In particular, the legislative decree:
- strengthens the criteria for identifying misleading practices on a case-by-case basis, acknowledging the relevance of environmental or social characteristics or circularity aspects (e.g. durability, reparability or recyclability);
- includes certain greenwashing practices in the “black list” of misleading practices;
- strengthens pre-contractual information requirements, including information on durability, repairability and the availability of updates;
- introduces new definitions under the Italian Consumer Code (including “environmental claims”, “durability”, “software updates”, “sustainability label”, “certification scheme”); and
- implements Article 22a of Directive 2011/83/EU, on harmonized notice and label.
As Directive (EU) 2024/825 is a maximum harmonisation directive, the decree does not introduce provisions going beyond or deviating from those set out in the Directive.
The new provisions will apply from 27 September 2026.