TRW & Co · Competition, Regulatory & Investigations
ESG and Sustainability Lawyers in London
ESG lawyers London companies and investors instruct turn sustainability commitments into defensible legal positions. In 2026 the stakes rose: the FCA finalised UK SRS reporting for listed companies, the CMA can fine directly for misleading green claims, and EU due diligence rules still reach UK suppliers. Consistent, evidenced statements are now the core of ESG compliance.
Key pointThe CMA can now fine businesses up to 10% of global turnover for misleading consumer claims, including greenwashing, without going to court first. Every public green claim needs an evidence file that matches what the company says in its annual report.
At a glance
UK SRS published
The government published UK SRS S1 and S2 on 25 February 2026, based on the ISSB standards; they are voluntary unless a regulator or law requires them.
FCA listed company rules
FCA PS26/19 requires in-scope listed companies to report against UK SRS on a comply or explain basis for periods starting on or after 1 January 2027.
Direct CMA fines
Since 6 April 2025, the DMCC Act lets the CMA fine up to 10% of global turnover for consumer law breaches, including misleading green claims.
Modern slavery statements
Organisations supplying goods or services with turnover of £36 million or more must publish an annual board-approved statement under section 54.
EU rules narrowed, not gone
EU Omnibus I raised thresholds; non-EU companies with EU turnover above €1.5 billion remain within CSDDD.
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What ESG and sustainability law covers in the UK
ESG lawyers London boards and investors instruct advise on the legal duties behind environmental, social and governance commitments: what a company must disclose, what it may claim, what it must check in its supply chain, and how directors should weigh sustainability risks. ESG is not a single statute. It is a set of reporting rules, consumer and financial regulation, company law duties and contractual promises that together create real liability.
The pressure comes from several directions at once. Regulators enforce disclosure and greenwashing rules. Investors and lenders write sustainability terms into documents. Customers in the EU impose due diligence obligations through contracts. Activist shareholders and non-governmental organisations bring claims and complaints. For a UK business, the legal question is usually not whether ESG matters but which obligations apply and how to meet them consistently.
ESG becomes a legal problem at predictable moments: when an annual report is drafted, when a product is marketed as green or ethical, when a fund is labelled, when financing is raised against sustainability targets, when an acquisition target's supply chain is examined, and when a complaint or regulatory inquiry arrives.
This page explains the UK framework in 2026, the reforms that changed it, and how to build an ESG programme that withstands scrutiny. It links to our related sustainable finance, environmental law and business and human rights pages.
The UK legal framework for ESG
ESG lawyers London companies rely on work across five overlapping areas of law. The table below summarises the main sources and who enforces them.
| Area | Main sources | Enforcer or forum |
|---|---|---|
| Corporate reporting | Companies Act 2006 strategic report rules, including climate-related financial disclosures for large companies; UK Listing Rules; UK SRS | FCA, Financial Reporting Council, Companies House |
| Green claims to consumers | Digital Markets, Competition and Consumers Act 2024; CMA Green Claims Code; CAP and BCAP advertising codes | CMA, Trading Standards, Advertising Standards Authority |
| Financial services | FCA anti-greenwashing rule; Sustainability Disclosure Requirements and investment labels | FCA |
| Supply chains and human rights | Modern Slavery Act 2015, section 54; contractual flow-down of EU due diligence duties | Home Office; contractual counterparties; civil courts |
| Directors and governance | Companies Act 2006, section 172; UK Corporate Governance Code | Shareholders, the courts, FCA for listed issuers |
Climate and sustainability reporting
Large UK companies and LLPs must already include climate-related financial disclosures in their strategic reports under section 414CB of the Companies Act 2006, aligned with the TCFD framework. Pension trustees of larger occupational schemes have parallel climate governance duties.
The next stage is the UK Sustainability Reporting Standards. The Department for Business and Trade published UK SRS S1 (general sustainability disclosures) and UK SRS S2 (climate) on 25 February 2026, based on the ISSB standards. They are voluntary unless a regulator or legislation requires them.
In its policy statement PS26/19, published on 30 September 2026, the FCA finalised rules requiring in-scope listed companies to report against UK SRS on a comply or explain basis for accounting periods beginning on or after 1 January 2027, with transitional relief for Scope 3 emissions. Commercial companies with equity shares in the main listing category must also say whether they have published a climate transition plan. The government has separately consulted on transition plan requirements and has signalled further work on whether UK SRS should extend to large private companies. Our guide to the UK Sustainability Reporting Standards tracks these steps.
Green claims and greenwashing
Since 6 April 2025, the Competition and Markets Authority has been able to enforce consumer protection law directly under Part 4 of the Digital Markets, Competition and Consumers Act 2024, including fines of up to 10% of global turnover for breaches such as misleading actions and omissions. Misleading environmental claims are squarely within scope. The CMA's Green Claims Code sets out six principles: claims must be truthful and accurate, clear and unambiguous, must not omit or hide important information, must make fair comparisons, must consider the full life cycle and must be substantiated. The Advertising Standards Authority enforces the advertising codes in parallel.
Financial services
All FCA-authorised firms have been subject to the anti-greenwashing rule since 31 May 2024: sustainability references must be consistent with the product's characteristics and be fair, clear and not misleading. Asset managers can also use the four investment labels under the FCA's Sustainability Disclosure Requirements regime, with naming and marketing rules for products that use sustainability terms without a label.
Emissions trading and environmental permits
Energy-intensive operators, power generators and aviation are covered by the UK Emissions Trading Scheme, which the UK ETS Authority has been expanding to further sectors. Environmental permitting, waste and water regulation, enforced by the Environment Agency in England and by separate agencies in Scotland, Wales and Northern Ireland, sit alongside it. These regimes produce the hard data on which many ESG disclosures depend, so permit breaches and emissions reporting errors quickly become disclosure problems too.
Supply chains and modern slavery
Under section 54 of the Modern Slavery Act 2015, commercial organisations supplying goods or services with a total turnover of £36 million or more must publish an annual slavery and human trafficking statement approved by the board. The UK has no general mandatory human rights due diligence law, but UK suppliers to EU companies increasingly inherit those duties through contracts. See our guide to modern slavery statements.
The biggest ESG risk for most UK companies is not missing a new disclosure rule. It is saying different things in the annual report, the marketing, the financing documents and the supplier code, and being unable to prove any of them.
Directors' duties and ESG litigation
Section 172 of the Companies Act 2006 requires directors to promote the success of the company for the benefit of its members as a whole, having regard to factors including the long-term consequences of decisions, employees, suppliers and customers, the community and the environment. Large companies must explain in a section 172 statement how they did so.
Courts have so far been reluctant to second-guess board judgement on climate strategy. In ClientEarth v Shell plc [2023] EWHC 1897 (Ch), the High Court refused permission for a derivative claim alleging that directors had mismanaged climate risk. That does not remove risk. Claims can still arise from misleading statements in listing documents and annual reports, from contractual sustainability warranties, from consumer law, and from planning and environmental challenges. In R (Finch) v Surrey County Council [2024] UKSC 20, the Supreme Court held that the downstream combustion emissions from extracted oil had to be assessed in an environmental impact assessment, a decision with continuing effects for energy and infrastructure projects.
ESG lawyers London boards consult therefore focus on process: well-documented decisions, accurate disclosures, verified claims and clear allocation of responsibility for sustainability data.
Key decisions: building a defensible ESG programme
There is no single template, and ESG lawyers London businesses consult should resist offering one. The right approach depends on whether the company is listed, regulated, consumer-facing or part of an EU supply chain. The decisions that matter most are these.
- Which framework to report against. Listed companies now face UK SRS on a comply or explain basis. Others may adopt it voluntarily, often because investors or lenders ask. Choosing early allows data systems to be built once.
- What to claim publicly. Absolute claims such as "carbon neutral" or "sustainable" are high risk. Specific, qualified and evidenced claims are safer and more credible.
- How far to go in the supply chain. Proportionate risk-based due diligence, focused on high-risk sourcing countries and sectors, is better than a uniform questionnaire that nobody reads.
- Where ESG sits in governance. A board committee or named executive with clear terms of reference, and a link between targets, data owners and disclosure sign-off.
- Whether to link finance or pay to ESG targets. Sustainability-linked loans and remuneration can drive delivery but create a financial incentive to overstate performance, so key performance indicators must be robust and verifiable.
Before any public sustainability claim goes live, ask three questions: what exactly are we claiming, what evidence proves it across the life cycle, and does it match what we say in our annual report and financing documents? If any answer is uncertain, narrow the claim. Our article on greenwashing and green claims sets out the CMA's approach.
Building an ESG compliance programme, step by step
- Map obligations. Identify which reporting, consumer, financial services, supply chain and contractual ESG obligations apply to each group entity, including EU requirements flowing through customers.
- Materiality and risk assessment. Assess the sustainability risks and opportunities that are material to the business, consistent with the UK SRS approach.
- Governance. Allocate board oversight and executive responsibility, and define who signs off disclosures and public claims.
- Data and controls. Build systems for emissions, workforce and supply chain data with the same rigour as financial reporting, ready for assurance.
- Claims review. Audit existing marketing, product labels, websites and investor materials against the Green Claims Code and the FCA anti-greenwashing rule.
- Contracts. Update supplier codes, ESG clauses, audit rights and remediation obligations, and review sustainability terms in financing documents.
- Disclose and monitor. Publish consistent disclosures, track performance against targets, and record why targets change.
Documents and evidence to assemble
When a regulator, investor or claimant questions a sustainability statement, the first request is for the underlying evidence. ESG lawyers London companies work with will want the following to exist, be current and be retrievable within days.
- Board minutes and committee papers showing how sustainability risks were considered in key decisions.
- Materiality assessments, climate scenario analysis and any transition plan with its assumptions.
- Emissions calculations by scope, methodology notes and third-party verification or assurance reports.
- Evidence files for each public green or ethical claim, including life-cycle data and certification terms.
- Supplier codes, due diligence questionnaires, audit reports and remediation records, particularly for high-risk sourcing countries.
- Modern slavery statements and the board approvals behind them.
- Sustainability-linked financing terms, KPI definitions and reporting certificates.
- Records of complaints, grievances and whistleblowing reports relating to environmental or human rights issues.
Risks and common mistakes
Making vague or absolute environmental claims
Terms such as "eco-friendly", "green", "sustainable" or "net zero" invite scrutiny unless clearly explained and supported. The CMA can now impose fines directly for misleading consumer claims, and the ASA regularly rules against broad environmental claims. Offsetting-based claims are particularly risky if the role of offsets is not made clear. Narrow the claim to what can be proved, explain what it covers, and keep the evidence ready. A product-level claim should rest on product-level data, not a company-wide target.
Inconsistent messages across documents
Investors, regulators and claimants compare the annual report, sustainability report, website, bond or loan documents and supplier codes. Discrepancies, such as an ambitious target in marketing but cautious language in the risk section, create evidence of misleading statements. Listed companies face potential liability to investors for untrue or misleading statements in published information. Use a single verified data set, a clear claims approval process and legal review of the final wording of every significant ESG statement.
Treating supply chain due diligence as a questionnaire
Sending a standard questionnaire to every supplier and filing the replies does little to identify forced labour or environmental harm. Regulators and EU customers expect risk-based due diligence: mapping the supply chain, prioritising high-risk countries, sectors and raw materials, auditing where necessary and following through on remediation. Contracts should give audit rights, require cooperation and allow suspension or termination for serious breaches, but responsible exit should be planned rather than used as the first response.
Assuming EU rules do not reach UK companies
The EU's Omnibus I directive, published in February 2026, narrowed the scope of the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, but did not remove them. Non-EU groups with EU net turnover above €450 million and a sizeable EU subsidiary or branch can fall within CSRD, and non-EU companies with EU turnover above €1.5 billion within CSDDD. Even out-of-scope UK companies will feel the rules through EU customers. See our guide to the EU CSDDD for UK companies.
Setting targets with no delivery plan
A public net zero or diversity target with no credible plan, budget or governance is a litigation and regulatory risk, and a reputational one when it is missed. Targets should be linked to a transition plan, to capital allocation and to data that can be audited. If a target is changed or abandoned, explain why openly and promptly. Silently dropping a target that investors or lenders relied on can raise misrepresentation issues and breach financing covenants.
Cross-border ESG: the EU, Bangladesh, the Gulf and Asia
For ESG lawyers London clients instruct on international matters, the starting point is that obligations increasingly follow the supply chain rather than the company's place of incorporation. A UK fashion retailer buying from Bangladesh, a UK manufacturer exporting to the EU, and a UK investor in Gulf infrastructure each face different overlapping regimes.
Bangladesh is central to many UK supply chains, particularly ready-made garments. Buyers are expected to address factory safety, freedom of association, wages, working hours and environmental impacts such as water and chemical management. EU due diligence rules and the UK Modern Slavery Act both push those expectations down to Bangladeshi suppliers. TRW & Co's Dhaka, Chattogram and Sylhet presence allows on-the-ground supplier due diligence and remediation work, and our Bangladesh supply chain team advises UK buyers and Bangladeshi exporters alike.
The EU also affects UK exporters through carbon pricing. The EU carbon border adjustment mechanism applies to imports of carbon-intensive goods, and the UK is introducing its own CBAM from January 2027. See our guide to the UK CBAM.
Singapore and the Gulf are moving towards ISSB-based climate reporting for listed companies, so UK groups with operations there can often align one data set across jurisdictions. Our carbon markets team advises on emissions trading and voluntary carbon credits used in transition strategies.
How our ESG lawyers London team helps
We advise listed and private companies, investors, lenders and suppliers. Our work is practical: identifying which obligations apply, reducing legal risk in what is said publicly, and building contracts and governance that hold up.
Reporting readiness
Mapping UK SRS, Companies Act climate disclosures and Listing Rules requirements against existing reporting, and reviewing draft disclosures, transition plan statements and comply or explain wording.
Green claims review
Reviewing marketing, labels, websites and investor materials against the DMCC Act, the Green Claims Code, advertising codes and the FCA anti-greenwashing rule, and responding to CMA or ASA inquiries.
Supply chain due diligence
Designing risk-based due diligence, supplier codes and contractual protections, preparing modern slavery statements, and coordinating audits and remediation in Bangladesh and other sourcing countries.
Transactions and finance
ESG due diligence in M&A and investment, sustainability warranties and indemnities, and documentation of green and sustainability-linked loans and bonds.
Governance and boards
Board training, committee terms of reference, section 172 statements, and decision records that show how sustainability risks were weighed.
Disputes and investigations
Advising on greenwashing complaints, shareholder activism, NGO campaigns, contractual ESG disputes and regulatory investigations, instructing specialist counsel where higher-court advocacy is required.
Checklist for decision-makers
- Which UK, EU and contractual ESG obligations apply to each entity in the group?
- If we are listed, are we ready to report against UK SRS on a comply or explain basis for periods from 1 January 2027?
- Does every public sustainability claim have an evidence file, and does it match the annual report?
- Has the board approved the latest modern slavery statement, and is due diligence risk-based?
- Who owns sustainability data, and could it withstand external assurance?
- Do our financing, supply and acquisition documents contain ESG terms we can actually meet?
- Are targets backed by a credible plan, and do we have a process for changing them?
ESG lawyers London companies involve before disclosures and campaigns go live save time and reduce risk. To discuss your position, contact our London office, or browse our full list of practice areas.
Frequently asked questions
01Are UK Sustainability Reporting Standards mandatory?
Not in themselves. The government published UK SRS S1 and S2 in February 2026 for voluntary use, with any mandatory application set by regulators or legislation. The FCA has done so for listed companies: its September 2026 policy statement requires in-scope issuers to report against UK SRS on a comply or explain basis for accounting periods beginning on or after 1 January 2027. The government has signalled further work on whether requirements should extend to large private companies.
02What counts as greenwashing under UK law?
Greenwashing is any environmental claim that is false, misleading, unclear, unsubstantiated or omits important information. For consumer-facing businesses, it can breach the Digital Markets, Competition and Consumers Act 2024, which the CMA can enforce directly with fines. Advertising is also regulated by the ASA under the CAP and BCAP codes. FCA-authorised firms are bound by the anti-greenwashing rule, which requires sustainability references to be fair, clear and not misleading.
03Does my company need a modern slavery statement?
If your organisation carries on business in the UK, supplies goods or services and has a total annual turnover of £36 million or more, including subsidiaries, you must publish a slavery and human trafficking statement each financial year under section 54 of the Modern Slavery Act 2015. It must be approved by the board, signed by a director and published on your website. The statement should describe due diligence, risk assessment, training and effectiveness measures.
04Do EU sustainability rules apply to UK companies?
Some do. After the Omnibus I directive, non-EU groups can fall within the EU Corporate Sustainability Reporting Directive if they have EU net turnover above €450 million and an EU subsidiary or branch above set size, and within the Corporate Sustainability Due Diligence Directive if they generate more than €1.5 billion of turnover in the EU. Far more UK companies are affected indirectly, through contractual obligations imposed by EU customers.
05Can directors be sued for failing to address climate risk?
Directors must have regard to environmental impacts and long-term consequences under section 172 of the Companies Act 2006, but the courts give boards wide latitude. In ClientEarth v Shell, the High Court refused permission for a derivative claim over climate strategy. The more realistic risks are claims over misleading disclosures, consumer law enforcement, contractual ESG breaches and regulatory action, which is why accurate statements and good decision records matter.
06What should a UK buyer do about supply chain risks in Bangladesh?
Map suppliers beyond the first tier, prioritise high-risk sites and issues such as fire and building safety, forced or child labour, wages and chemical use, and verify through audits and worker voice mechanisms. Build audit rights, cooperation duties and remediation plans into supplier contracts. Record findings and remediation in the modern slavery statement. Local presence helps: TRW & Co's Bangladesh offices can support on-site due diligence and remediation.
Sources and official materials
- UK Sustainability Reporting Standards — Government guidance on UK SRS
- FCA: climate change and sustainable finance — Listed company and firm sustainability rules
- FCA Sustainability Disclosure Requirements regime — Anti-greenwashing rule and investment labels
- CMA Green Claims Code — Principles for environmental claims
- Digital Markets, Competition and Consumers Act 2024 — CMA direct consumer enforcement
- Modern Slavery Act 2015, section 54 — Transparency in supply chains
- Companies Act 2006, section 414CB — Non-financial and climate-related disclosures
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.