3 July – 3 August 2026
Introduction
ESG is changing the landscape for financial institutions as stakeholders, including investors, increasingly expect them to make their operations more sustainable.
Financial services regulators also view ESG as a priority, embedding the principles of climate-related financial risks into their supervisory frameworks and dealing with greenwashing issues.
There is limited uniformity in regulation as financial services regulators are at different stages in developing their ESG regulatory framework, particularly in relation to disclosures and taxonomy, which is a challenge for many institutions operating across borders. It is therefore critical to monitor the latest regulator updates.
To help you, we have tracked ESG regulatory developments from 3 July 2026 – 3 August 2026, from the UK, France, EU, the Netherlands, the US, Australia as well as other key international regulators.
This month’s highlights
The FCA’s Approach to Climate Change: A Timely Reminder
As the United Kingdom endures yet another punishing heatwave in the summer of 2026, with temperatures soaring well above seasonal norms and amber heat warnings blanketing much of England and Wales, the physical reality of climate change has never felt more immediate. For the financial services sector, these conditions serve as a stark reminder that climate risk is not a distant abstraction — it is here, now, and accelerating.
Disclosure and Transparency
Central to the FCA’s strategy is the requirement for climate-related financial disclosures. Building on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), the FCA has mandated that listed companies, asset managers, and regulated pension providers publish consistent, decision-useful information on their climate exposures. The aim is clear: investors and consumers deserve to understand how climate risk — both physical and transitional — may affect the value of their investments and the resilience of the firms they rely upon.
Greenwashing and Consumer Protection
The FCA has also taken an increasingly robust stance against greenwashing. With consumer demand for sustainable investment products surging, the regulator has introduced labelling and classification requirements designed to ensure that products marketed as “green” or “sustainable” genuinely meet those claims. Firms making misleading environmental assertions face supervisory scrutiny and enforcement action.
Governance and Risk Management
Beyond disclosure, the FCA expects firms to embed climate considerations into their governance frameworks and risk management processes. Boards and senior management are expected to demonstrate that they understand and are actively managing climate-related risks, whether those arise from extreme weather events disrupting operations or from the regulatory and market shifts associated with decarbonisation.
Looking Ahead
The current heatwave underscores the urgency of these efforts. Extreme weather events impose tangible costs — on insurers settling claims, on asset managers valuing physical infrastructure, and on lenders assessing borrower resilience. The FCA has signalled that its supervisory expectations will continue to evolve as climate science develops and as international standards mature.
For regulated firms, the message is unmistakable: climate risk management is not a compliance afterthought but a core strategic imperative. Those that treat it as such will be better positioned to protect their customers, maintain market confidence, and contribute to orderly transition. Those that do not can expect the regulator to take notice.
As Britain swelters through another record-breaking summer, the case for decisive regulatory action — and responsible corporate response — could scarcely be more compelling.
United Kingdom
4 August 2026 – New FCA webpage – Climate adaptation and resilience
Among other things, the FCA’s web page notes that the regulator’s engagement with mortgage lenders identified a number of themes that firms may wish to consider:
- Many firms are reflecting on how flood risk and other climate-related risks could affect lending decisions, property values and customer outcomes.
- They are also considering how changes in the availability and affordability of property insurance could affect future mortgage lending. This includes having regard to Flood Re’s scheduled expiry in 2039, and the increasing number of properties built since 1 January 2009 that do not qualify for the scheme.
- Some firms are exploring how greater household resilience could be supported where demand for adaptation finance and uptake of flood resilience measures remain limited. Incentives may be available at no cost to the homeowner but are still not taken up, potentially reflecting a low awareness of flood risk and the options that are available to address it.
- Mortgage lenders should be mindful of their obligations to deliver good outcomes under the Consumer Duty. Outcomes monitoring should be a key source of intelligence and should be used to help identify emerging issues.
European Union
28 & 30 July 2026 – Published in OJ – Delegated Regulations on ESG ratings
There was published in the Official Journal of the EU (OJ):
- Commission Delegated Regulation (EU) 2026/871 of 21 April 2026 supplementing Regulation (EU) 2024/3005 of the European Parliament and of the Council with regard to regulatory technical standards (RTS) specifying the elements of ESG rating products to be disclosed to the public and to users of ESG ratings, rated items and issuers of rated items. The Delegated Regulation enters into force on the twentieth day following its publication in the OJ. It applies from 2 July 2026 to align with the ESG Ratings Regulation application date.
- Commission Delegated Regulation (EU) 2026/872 of 21 April 2026 supplementing Regulation (EU) 2024/3005 of the European Parliament and of the Council with regard to RTS specifying the measures and safeguards to be implemented by ESG rating providers to separate their ESG rating activities from their other activities. It applies from2 July 2026.
- Commission Delegated Regulation (EU) 2026/904 of 24 April 2026 supplementing Regulation (EU) 2024/3005 of the European Parliament and of the Council with regard to rules of procedure on fines and periodic penalty payments imposed to ESG rating providers by the European Securities and Markets Authority. The Delegated Regulation enters into force on the twentieth day following that of its publication in the OJ (19 August 2026).
- Commission Delegated Regulation (EU) 2026/910 of 24 April 2026 supplementing Regulation (EU) 2024/3005 of the European Parliament and of the Council with regard to fees charged by the European Securities and Markets Authority to ESG rating providers. The Delegated Regulation entered into force on the day following its publication in the OJ (31 July 2026).
France
There have been no reported updates this month.
The Netherlands
There have been no reported updates this month.
Australia
3 July 2026 – Australia’s National Environmental Protection Agency officially commences its operations
Australia’s first independent federal regulator, the National Environmental Protection Agency (NEPA), commenced its operations on 1 July 2026. Tasked with bringing together the regulatory functions of Australia’s national environmental laws, the NEPA will oversee the assessment and approvals functions of the updated Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The NEPA’s objective is to deliver transparent, timely, and evidence-based environmental regulation.
The NEPA is led by CEO John Bradley PSM, and will take over assessment and approval decisions currently handled by the Department of Climate Change, Energy, the Environment and Water. Several significant powers have been deferred to allow further consultation, with commencement expected August – September 2026. These include:
- environment protection orders: ‘stop work orders’ issuable without a prior hearing where serious environmental damage is occurring or imminent;
- expanded compliance audits: initiable without prior notice against holders of environmental authorities and other persons; and
- substantially increased penalties: maximum civil penalties for corporations rising to the greatest of $16.5 million, three times the benefit derived, or 10% of annual turnover (capped at $825 million).
Project proponents ought to strengthen compliance governance, audit existing EPBC Act conditions, and familiarise themselves with forthcoming regulatory tools to manage heightened enforcement risk under the reformed regime.
16 July 2026 – ASIC publishes its updated ‘Statement of Intent’
The Australian Securities and Investments Commission (ASIC) published an updated ‘Statement of Intent’ in response to the Federal Government’s ‘Statement of Expectations’.
The Statement of Intent outlines how ASIC will achieve its objectives, carry out its responsibilities and exercise its powers. It should be read alongside the Statement of Expectations, as well as the laws that apply to ASIC and those which it administers. Notably, the Statement of Intent identifies a new “policy priority” of the Government to improve the productivity and economic growth of the financial and corporate sectors. As such, ASIC expressly aims to support such a goal by, amongst other things:
- prioritising consumer and retail investor protection from serious harms;
- promoting and monitoring responsible use of AI technologies;
- taking a pragmatic and proportionate approach to the supervision and enforcement of climate-related financial disclosure requirements, while continuing to take action to deter greenwashing; and
- working closely with the Australian Competition and Consumer Commission (ACCC) (including the National Anti-Scam Centre) and other agencies, to act on and reduce the harmful impact of scams on consumers.
The Statement of Intent also states ASIC will work closely with “the Australian Government to improve the regulation of auditing and multidisciplinary firms in Australia, and enhancing accountability, transparency and oversight of the audit sector.
On 11 July 2026, ASIC Commissioner Kate O’Rourke wrote and open letter to registered company auditors reminding them of their legal, ethical and professional obligations, and the importance of protecting public confidence in the audit profession.
16 July 2026 – Albanese Government commits to strengthening modern slavery laws
Australia’s Attorney-General the Hon Michelle Rowland MP announced the Albanese Government’s commitment to “strengthening Australia’s modern slavery laws and equipping companies to better identify and address risks in their global supply chains”.
The Government plans to introduce a new criminal offence for companies with an annual consolidated revenue of over $100 million which fail to prevent modern slavery in their supply chains. The introduction of this offence is to be supplemented by a defence for companies which can demonstrate that they took reasonable steps to prevent modern slavery, with the intention of ensuring “companies which have adequate processes and steps in place are afforded appropriate protections.”
Alongside the introduction of this offence, the Government also intends to introduce civil penalties and associated enforcement powers to address non-compliance with existing obligations under the Modern Slavery Act. With the introduction of these new laws, the Commonwealth promises to consult industry, and offer practical guidance and education initiatives to assist companies.
United States- SEC and CFTC
There have been no reported updates this month.
International regulators – FSB, IOSCO, Basel Committee, NGFS, SASB, IFRS, ISSB
There have been no reported updates this month.