We are pleased to present the International Sustainability Reporting (ISR) 2025/02 Q4 Sustainability Reporting Jurisdictional Update, issued by BDO.
The material provides information on changes in various jurisdictions, including those of the European Union and the United States. It also includes a brief overview of key developments in sustainability reporting around the world.
This material provides a comprehensive review of the latest developments in sustainability reporting and climate regulations across various jurisdictions, including the European Union, the United States, Malaysia, China, Canada, Thailand, the United Kingdom, Brazil, Switzerland, Qatar and Kenya.
The main focus is on the growing global drive towards standardised and mandatory disclosure of environmental, social and governance (ESG) information by the companies.
Presently, governments and non-governmental organisations in the world’s leading countries are introducing regulations that define ESG requirements and reporting. In this context, it is worth paying attention to the European Union’s CSRD directive (Corporate Sustainability Reporting Directive), adopted in 2022. According to this directive, over 50 thousand European companies are required to report on non-financial ESG indicators with effect from 2025 (for 2024). The Directive extends beyond the European Union, encompassing companies based outside the region.
The main criteria for such companies include: their shares are listed on an EU stock exchange, they have a parent company in an EU country, or they have a significant share of business in EU countries.
According to unofficial estimates, the directive will affect approximately 10 thousand companies outside the EU, including Ukraine. The relevant reports must be subject to a separate non-financial audit.
The European Union is taking proactive steps to standardise and mandate the disclosure of environmental, social and governance information by the companies. The European Commission has published answers to frequently asked questions on the EU Taxonomy, covering general requirements, interaction with the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD), verification and assurance requirements, technical criteria for environmental objectives and Do No Significant Harm (DNSH) criteria.
In accordance with the Strategy for Introduction of Sustainable Development Reporting by Enterprises, the implementation of EU regulations is of great importance for Ukraine. This will harmonise Ukrainian legislation with EU law, which is a prerequisite for Ukraine’s candidacy for EU membership. The implementation of the European Sustainability Reporting Standards (ESRS) will enable Ukrainian companies to access reliable and objective information to assess the environmental, social and governance aspects of their operations, in particular through the introduction of mechanisms that increase transparency and accountability. This will also ensure a level playing field for Ukrainian companies in international markets and help to increase the volume of investments attracted.
The Bulletin also discusses the US regulatory documents governing sustainability reporting and climate regulatory acts. The main emphasis is placed on California’s laws SB-253 and SB-261, along with the regulations established by the US Securities and Exchange Commission (SEC):
- SB-253: The Climate Corporate Data Accountability Act is a law that requires companies with revenues of more than USD 1 billion doing business in California to report their Scope 1, Scope 2 and Scope 3 emissions on an annual basis under the Greenhouse Gas Protocol (GHG Protocol). The reporting obligations are scheduled to commence in 2026, with the requirements for Scope 3 reporting taking effect in 2027. The amendments to SB-253 allow for consolidation of reporting at the parent company level and change the deadline for Scope 3 reporting.
- SB-261: The Climate‐Related Financial Risk Act requires companies with revenues over USD 500 million doing business in California to publish a biannual report on climate financial risks in accordance with the TCFD framework. The reporting will commence in 2026, and the amendments to SB-261 retain the original reporting start date.
The introduction of standardised and mandatory sustainability disclosures is an essential component for the development of socially responsible business. Furthermore, sustainability reporting enables companies to evaluate and enhance their environmental and social performance, thereby positively impacting their reputation and competitiveness.
BDO in Ukraine is a trusted provider of professional sustainability services, helping businesses to adapt to new requirements and standards. We provide customised and flexible solutions that are tailored to your specific needs and objectives. Please, contact us to discuss how we can help you achieve your sustainability goals.
Source BDO Global
