Climate and Energy: EU Policy and Regulation Update for 1 July 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.

Sustainability Omnibus Package/Simplification Measures

• EBA, ESMA and EIOPA publish Annual Reports, highlighting burden reduction initiatives over 2025
• EFRAG publishes unapproved exposure draft of N-ESRS
• EBA updates Pillar 3 disclosure requirements on ESG risks, equity and shadow banking exposures, as part of simplification effort
• EFRAG publishes reports on VSME sustainability reporting

European Union/International

• EU consumer groups file greenwashing complaint against energy suppliers
• RTS supplementing European Green Bond Regulation published in Official Journal of the EU, amid end of transitional regime for external reviewers
• ICMA publishes sustainable bond guidance and market reports
• GRI publishes global trends on sustainability reporting
• Council of the EU agrees negotiating position on SFDR 2.0

France

• French Court fines Volvic over misleading commercial practices on environmental claims
• French ISR Label Committee consults on revised real estate sustainability standard
• French Court orders TotalEnergies to expand vigilance plan to cover Scope 3 emissions
• French government withdraws proposed reform of Agency for Ecological Transition

Sustainability Omnibus Package/ Simplification measures

12-26 June 2026 [EU] – EBA, ESMA and EIOPA publish Annual Reports, highlighting burden reduction initiatives over 2025

The European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA) published their Annual Reports, providing an overview of their oversight activities in 2025 [reports available here, here and here, respectively]. 

EBA made regulatory efficiency a strategic priority, publishing 21 recommendations to simplify the regulatory and supervisory framework, reduce reporting requirements and strengthen proportionality, particularly for smaller institutions, while promoting greater data integration and digitalization. ESMA focused on simplifying reporting frameworks, transaction reporting and disclosure obligations, while supporting the implementation of the Listing Act and broader simplification initiatives. EIOPA similarly proposed significant reductions in Solvency II reporting, shorter supervisory guidance and more integrated data collection, while simplifying implementation of the Insurance Recovery and Resolution Directive and reinforcing proportionality for smaller insurers.

Overall, the Reports underline a shared commitment to supporting the EU’s competitiveness agenda through regulatory simplification while maintaining high supervisory standards. Across their respective sectors, the three authorities prioritized streamlining reporting requirements, strengthening proportionality and improving the efficiency of supervisory processes.

16 June 2026 [EU] – EFRAG publishes unapproved exposure draft of N-ESRS

The European Financial Reporting Advisory Group (EFRAG) published materials relating to its ongoing work on the Non-EU Sustainability Reporting Standard (N-ESRS), following its 16 June 2026 Sustainability Reporting Board (SRB) meeting [all materials available here]. 

EFRAG is tasked by the Commission with developing sustainability reporting standards under the CSRD, including ESRS for Non-EU undertakings and groups. The SRB documentation included an unapproved exposure draft [available here] and a markup version outlining changes between the simplified ESRS and the proposed N-ESRS [available here].

The N-ESRS will consist of 12 standards, i.e., two general cross-cutting standards, five environmental standards, four social standards and one governance standard. These will follow the ESRS’s approach to fair presentation, users of information, value chain and transitional reliefs – with a focus however on impacts rather than double materiality. EFRAG is considering three reporting approaches for global businesses based outside the European Union: 

• Global approach: Impacts are reported at the global level across all sustainability topics;
• “Full ESRS” approach: The non-EU parent voluntarily prepares a sustainability statement in accordance with the ESRS, allowing its EU subsidiaries that fall within the scope of Article 19a or Article 29a of the CSRD to rely on the subsidiary exemption; and
• Mixed approach: Climate-related impacts are reported globally, while reporting on all other topics is limited to EU-related impacts, provided that those impacts are managed accordingly (e.g., separate segments or products). EU-related impacts would be required to include both: (i) customer-based impacts (arising from products/services sold or provided in the EU market) and (ii) location-based impacts (arising from activities conducted within the EU).

EFRAG indicated that the exposure draft is expected to be published for public consultation in mid-July 2026, with the consultation period running until mid-October 2026. EFRAG would then submit its technical advice to the European Commission in January 2027, with the N-ESRS expected to be adopted by the Commission as a delegated act in mid-2027.

22 June 2026 [EU] – EBA updates Pillar 3 disclosure requirements on ESG risks, equity and shadow banking exposures, as part of simplification effort

The European Banking Authority (EBA) published its final draft Implementing Technical Standards (ITS) amending Commission Implementing Regulation (EU) 2024/3172 (the Pillar 3 disclosure framework on ESG risks), while introducing new disclosure requirements on equity and shadow banking exposures [final report available here]. The EBA noted that this publication completes the implementation of the CRR3 disclosure requirements and supports the EU’s broader regulatory simplification agenda, in line with the Omnibus package.

The revised ITS simplify existing ESG disclosure requirements through a more proportionate, risk-based approach. For large institutions, the framework adopts a “core plus supplement” model, reducing ESG disclosure datapoints by 37%, while medium-sized institutions will disclose 17% fewer datapoints. Small and non-complex institutions (SNCIs) will face significantly lighter requirements, with around 84% fewer datapoints than large institutions. In addition, the EBA will centrally pre-fill and publish ESG information for SNCIs through the Pillar 3 Data Hub based on supervisory reporting, further reducing reporting burdens.

The ITS are aligned with the European Sustainability Reporting Standards (ESRS) and the EBA’s draft ESG supervisory reporting framework, enabling greater interoperability and reducing duplication between prudential and sustainability reporting.

The ITS will now be submitted to the European Commission for adoption and are expected to apply from 31 December 2026, with a deferred implementation date of 31 December 2027 for SNCIs.

25 June 2026 [EU] – EFRAG publishes reports on VSME sustainability reporting

The European Financial Reporting Advisory Group (EFRAG) released the second edition of its mappings to support the application of the future Voluntary Standard and the VSME Recommendation.

Under the Omnibus I package, the European Commission was mandated to adopt delegated acts establishing voluntary sustainability reporting standards for protected undertakings (i.e., undertakings with fewer than 1,000 employees). The resulting Voluntary Standard builds on Commission Recommendation (EU) 2025/1710, which is itself based on the voluntary sustainability reporting standard for SMEs (VSME) developed by EFRAG.

The first report is a mapping of digital tools [available here] providing a comparative analysis of shortlisted greenhouse gas calculators meeting pre-defined criteria. It offers practical support to SMEs that wish to identify tools to support reporting on their GHG emissions based on VSME and identifies a national geolocation and climate risk tool. 

The second report is a mapping of digital platforms and initiatives [available here], providing an overview of the 108 platforms and initiatives for SMEs reporting, and focusing on the comparison of their characteristics.

European Union/International

16 June 2026 [EU] – EU consumer groups file greenwashing complaint against energy suppliers

The European Consumer Organization (BEUC), together with 12 national consumer organizations, has lodged a complaint with the European Commission and the Consumer Protection Cooperation (CPC) Network alleging that several major energy suppliers have made misleading environmental claims in breach of EU consumer law [see press release here].

The complaint alleges that the companies used generic environmental claims and sustainability-related marketing to promote energy products containing fossil gas, while also making claims regarding future climate performance, carbon offsetting and the comparative environmental benefits of fossil gas. According to BEUC, these practices may mislead consumers about the environmental characteristics of the products and the companies’ overall climate transition efforts.

BEUC argues that the alleged practices may infringe on Directive 2005/29/EC (Unfair Commercial Practices Directive), as strengthened by Directive (EU) 2024/825 (Empowering Consumers for the Green Transition Directive), which prohibits certain generic environmental and offsetting claims. The organization has called on enforcement authorities to investigate the practices, require the companies to cease using the contested claims, impose sanctions where appropriate and consider consumer compensation where consumers paid a premium for products marketed as environmentally beneficial.

17 June 2026 [EU] – RTS supplementing European Green Bond Regulation published in Official Journal of the EU, amid end of transitional regime for external reviewers

Two Commission Delegated Regulations supplementing Regulation (EU) 2023/2631 (EU Green Bond Regulation) with regard to regulatory technical standards (RTS) and implementing technical standards (ITS) were published in the Official Journal of the EU on 17 June 2026 [available here and here]. 

The EU Green Bond Regulation, which has applied since 21 December 2024, established a voluntary “European Green Bond” label, which issuers may use if they demonstrate that the proceeds of the bond are allocated in alignment with the EU Taxonomy. The Regulation requires independent external reviewers to assess and confirm compliance with its requirements, both at issuance (via a pre-issuance review) and on an ongoing basis (via a post-allocation review). The newly adopted measures comprise:

• Commission Delegated Regulation 2026/544: Laying down RTS specifying the organizational, governance and operational requirements applicable to external reviewers, together with the information required for the recognition of third-country reviewers; and
• Commission Implementing Regulation (EU) 2026/543: Laying down ITS on the standard forms, templates and procedures for the notification of material changes to the information provided during the registration process as an external reviewer. 

This publication came shortly before the entry into force of the mandatory EU Green Bond regime. As of 22 June 2026, external reviewers operating under the Regulation’s transitional regime are no longer permitted to carry out external review activities. Going forward, only firms registered with the European Securities and Markets Authority (ESMA) may act as external reviewers of European Green Bonds. In parallel, ESMA published the first register of authorized external reviewers of European Green Bonds [available here].

22 June 2026 [International] – ICMA publishes sustainable bond guidance and market reports

The International Capital Market Association (ICMA) published complementary FAQ guidance for Climate Transition Bonds, a report on investor demand for green, social, sustainability and sustainability-linked bonds, along with a comparison of the Green Bond Principles and the European Green Bond Standard [all materials available here].

The FAQs provide guidance on the Climate Transition Bond Guidelines, including with respect to (i) differentiating climate transition projects from green projects, (ii) understanding “best efforts” alignment with the Climate Transition Finance Handbook, or (iii) clarifying how the Climate Transition Bond Guidelines apply to financial institutions and their lending portfolios.

The comparison of Green Bond Principles (first published in January 2014) and the European Green Bond Standard (published in November 2023) outlines the commonalities and differences between the two and encourages issuers to demonstrate alignment with both standards.

The report on “exploring structural demand for sustainable bonds” provides insight into the structural drivers underpinning demand for green, social, sustainability and sustainability-linked bonds – and how investor expectations are shaping issuance behavior, disclosures and engagement practices. 

23 June 2026 [International] – GRI publishes global trends on sustainability reporting

The Global Reporting Initiative (GRI), an international independent standards organization that develops frameworks for sustainability reporting, published a report highlighting global trends in the GRI Standards and sustainability reporting in 2025 [available here].

The report provides a comprehensive assessment of corporate sustainability reporting practices worldwide. Based on nearly 15,000 listed companies across 132 jurisdictions, the report finds that sustainability reporting remains widespread. GRI highlights a geographical shift in reporting practices, with growth concentrated in Asia, Latin America and other Global South markets, while reporting levels have stabilized or declined in Europe and North America amid evolving regulatory requirements.

The analysis also confirms that sustainability reporting is increasingly based on multiple frameworks, including Task Force on Climate-Related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB), International Sustainability Standards Board (ISSB), European Sustainability Reporting Standards (ESRS) and Taskforce on Nature-related Financial Disclosures (TNFD). Around 80% of ISSB reporters and 70% of ESRS reporters also reference GRI, reflecting growing interoperability across reporting standards.

26 June 2026 [EU] – Council of the EU agrees negotiating position on SFDR 2.0

The Council of the EU published the text reflecting its negotiating position on the proposed Regulation amending Regulation (EU) 2019/2088 (SFDR 2.0) [available here]. This allows the Council Presidency to start negotiations with the European Parliament once the Parliament has agreed its position on the proposed Regulation.

On 24 June 2026, the Council of the EU published a press release announcing that it had agreed its negotiating position [available here]. The Council of the EU welcomed the proposed changes to the SFDR framework, and highlighted the following amendments it is seeking to introduce:

• Providing that when companies identify and disclose the principal adverse impacts (PAIs) of their investments on sustainability factors, they must use at least three indicators from a list provided by the European Commission to support their claims.
• Considering for inclusion in the transition category investments in companies active in the fossil fuel sector which allocate 20% of their capital expenditure to economic activities aligned with EU taxonomy rules, and with a clear, time-bound strategy to reduce greenhouse gas emissions. 
• Explicitly allowing the inclusion in the transition category of general-purpose issuances by public sector bodies, which represent a significant share of the investment universe of many financial market participants, in particular financial products in the insurance and pension sectors. 
• Reducing administrative burdens through allowing financial market participants not to apply the categorization provisions for alternative investment funds offered exclusively to professional investors. 

France

23 June 2026 [France] – French Court fines Volvic over misleading commercial practices on environmental claims

The Paris Judicial Court reportedly ruled that a number of environmental claims used by Volvic on its bottled water products constituted misleading commercial practices under French consumer law. The ruling, issued on 23 June 2026 following proceedings brought by the French consumer association CLCV, concerns claims including “carbon neutral”, “certified carbon neutral”, “100% recycled”, “100% recyclable” and “always recyclable” [see press release from CLCV here, in French only].

The Court found that the environmental claims were liable to mislead consumers as to the products’ environmental characteristics. In particular, it held that the “carbon neutral” claims were not substantiated because emissions associated with manufacturing a Volvic bottle were not fully offset, while the “100% recycled” and “100% recyclable” claims were inaccurate since certain components of the bottles, including labels, ink and adhesive, were not entirely recycled or recyclable.

The Court ordered Volvic to pay EUR 75,000 in damages to CLCV and to publish the ruling on its website’s homepage for six months. Danone, Volvic’s parent company, announced that it would appeal the decision, maintaining that the claims reflected the regulatory framework and market practices applicable at the time they were used. The company also noted that the Carbon Trust certification supporting its former “carbon neutral” claim had been discontinued in 2023, after which it reviewed its approach to carbon neutrality communications.

The Court had held a similar ruling against TotalEnergies in October 2025 [see our previous edition here].

23 June 2026 [France] – French ISR Label Committee consults on revised real estate sustainability standard

The French ISR (Investissement Socialement Responsable – i.e., Socially Responsible Investment) Label Committee has launched a consultation on a revised version of the ISR Label framework for real estate funds, proposing more stringent ESG requirements while strengthening transparency, comparability and climate-related expectations for certified funds [proposal available here, in French only]. The new framework would replace the current 2020 version following a transitional implementation period for new and existing funds. 

The proposed revisions introduce a stronger focus on double materiality, requiring funds to demonstrate that ESG objectives, investment strategies and reporting indicators are aligned with both financial and sustainability impacts. The framework also enhances governance requirements around ESG methodologies, stakeholder engagement and internal controls, while introducing clearer expectations for performance monitoring and disclosure. Climate considerations are significantly reinforced. Funds would be required to integrate decarbonization pathways into ESG assessments, assess climate transition strategies against Paris Agreement-aligned scenarios, and demonstrate credible transition plans for a growing proportion of assets. 

The proposal also expands mandatory ESG indicators covering energy, greenhouse gas emissions, biodiversity, mobility, occupant wellbeing, supply chain management and climate resilience, alongside strengthened exclusion criteria for fossil fuel-related assets and other activities inconsistent with the label’s sustainability objectives.

25 June 2026 [France] – French Court orders TotalEnergies to expand vigilance plan to cover Scope 3 emissions

The Paris Judicial Court issued a judgment in proceedings brought by several NGOs and the City of Paris against TotalEnergies under the French Duty of Vigilance Law [full decision available here, in French only]. This follows the Paris Judicial Court’s March 2026 decision against the Yves Rocher Group under the same law [see our previous edition here] and the Paris Court of Appeal’s June 2025 ruling upholding a similar decision against La Poste [see our previous edition here].

The Court held that climate-related risks and impacts to which a company may contribute through its activities fall within the scope of the French duty of vigilance framework. It further found that greenhouse gas emissions associated with TotalEnergies’ activities, including Scope 3 emissions resulting from the use of the group’s products, should be reflected in the company’s vigilance plan as part of its risk mapping.

The Court considered that the exclusion of Scope 3 emissions rendered TotalEnergies’ vigilance plan incomplete and ordered the company to update its plan within six months, with provisional enforcement, by incorporating Scope 3 emissions and the corresponding vigilance measures.

The judgment also clarifies that, while courts may review whether a vigilance plan contains reasonable, appropriate and coherent measures, it is not for the judiciary to prescribe specific measures or require the company to achieve a particular emissions reduction target.

The proceedings have been adjourned until 21 January 2027, when the Court will review the amendments made to the vigilance plan before continuing the case.

25 June 2026 [France] – French government withdraws proposed reform of Agency for Ecological Transition

The French government has withdrawn its draft bill to “strengthen the local State” (Projet de loi visant à renforcer l’État local) [available here, in French only] following debate over provisions concerning the governance of the Agency for Ecological Transition (ADEME). The bill was presented to the Council of Ministers on 20 May 2026 and was due to be examined by the Senate from 7 July 2026, before being removed from the parliamentary agenda on 25 June 2026.

The ADEME is a public industrial and commercial establishment operating under the supervision of the French government. It supports the implementation of national environmental, climate and energy policies by providing technical expertise, administering public funding programmes and assisting public authorities, businesses and other stakeholders in areas including decarbonization, energy efficiency, circular economy and climate adaptation.

The proposed reform, set out in Article 7 of the draft bill, would have transferred the regional staff of ADEME to the Regional Directorates for the Environment, Planning and Housing (DREAL), placing them under the authority of regional prefects while maintaining ADEME as their legal employer. 

During the legislative process, the proposal came under scrutiny from the Conseil d’État (France’s highest administrative court) and prompted reactions from local authority representatives, members of the French Senate and ADEME’s Board of Directors. In its opinion published on 22 May 2026 [available here, in French only], the Conseil d’État raised legal concerns about the proposed staff transfer mechanism and found that the proposed governance arrangements did not appear satisfactory in terms of good administration.

Following the withdrawal of the bill from the Senate’s agenda on 25 June 2026, the proposed reform was suspended. The government indicated that it continued to support the broader objectives of strengthening the organization of the local State but would instead prioritize separate legislation on housing and decentralization. As a result, ADEME will continue to operate under its existing governance framework.