ESG
SUPPLY CHAINS: EUDR OBLIGATIONS POSTPONED UNTIL DECEMBER 2025
The EU Deforestation Regulation (EUDR) prohibits operators and traders from trading on or exporting from the EU market certain commodities (cattle, cocoa, coffee, oil palm, rubber, soya and wood) and specified derived products, unless they are “deforestation-free”. Any buyer/seller of such products may be within scope of obligations under the EUDR, which includes carrying out appropriate due diligence on its supply chain.
Obligations under the EUDR had been due to come into effect from 30 December 2024, however the European Commission approved a 12-month delay in order to allow a phasing-in period to ensure effective implementation. EUDR obligations will now come into force from 30 December 2025 (and from 30 June 2026 for SMEs).
The European Commission has launched the EUDR information system, where businesses can register their due diligence statements. The Commission is due to finalise the country benchmarking system (a list of countries classified as “low” or “high” risk with regard to deforestation) by June 2025.
For more, see our Insights: EU Deforestation Regulation: Proposed Delay and EUDR: New Supply Chain Obligations for Relevant Commodities and Products.
SUPPLY CHAINS: EU FORCED LABOUR REGULATION ENTERS FORCE
The EU Forced Labour Regulation (FLR) entered force in December 2024. The FLR does not require Irish transposing legislation and its obligations will apply with effect from December 2027.
The FLR prohibits products made with forced labour from being placed, made available on, or exported from the EU market. The FLR applies to all products, including their components regardless of industry or geographical location, where forced labour (including child labour) is used at any stage in the supply chain.
The FLR does not impose additional due diligence obligations beyond those already provided for under EU law (including the CS3D) or national law. However, in practice, companies operating within the EU will need to examine their supply chains and compliance frameworks in order to manage potential risks with regard to forced labour. The FLR provides that any due diligence carried out will be taken into account in the case of an investigation by a competent authority.
The European Commission is due to publish guidelines to support implementation of the FLR by June 2026, including on effective due diligence in relation to forced labour.
CS3D: IN FORCE AND AWAITING TRANSPOSITION
The CS3D entered force in June 2024 and will require certain large EU companies and non-EU companies operating within the EU to conduct due diligence related to adverse environmental and human rights impacts in their own operations, those of their subsidiaries and their chains of activities, and to adopt and implement a climate transition plan.
The CS3D is required to be transposed into Irish law by 26 July 2026 and it is anticipated that the Department of Enterprise, Trade and Employment will continue to work towards the transposition of the CS3D into Irish law throughout 2025, including potentially consulting upon and confirming its transposition policy.
We will continue to monitor developments in relation to the potential omnibus simplification package for implications regarding the CS3D (see the Sustainability Reporting section). For more details on the CS3D, read our briefing: New Due Diligence Obligations for Corporates Enter into Force.
GREENWASHING: EU GREEN CLAIMS DIRECTIVE & ECGT
We are continuing to monitor the EU Green Claims Directive which we anticipate will be adopted early this year. The directive will establish minimum criteria that companies must meet when making claims to consumers (in the EU) regarding the environmental benefits of their products/services, together with criteria for environmental labelling.
It is anticipated that focus in 2025 will include work towards the transposition of the EU Green Claims Directive and also the EU Directive on Empowering Consumers for the Green Transition (ECGT). The ECGT is required to be transposed by 27 March 2026 and prohibits practices such as generic unsubstantiated environmental claims and environmental claims based on offsetting green-house gas emissions outside of a product’s value chain.
ESG RATINGS REGULATION
A new regulation on ESG rating activities, which will apply to ESG ratings issued by ESG ratings providers operating in the EU, will apply from 2 July 2026. The objective of the regulation is to improve the quality of ESG ratings to enable investors to make better informed investment decisions regarding sustainability objectives and the transparency and integrity of the operations of ESG ratings providers.
HORIZON SCANNING: KEY DATES
Q1 2025
EU Green Claims Directive expected to be adopted.
30 June 2025
EUDR country benchmarking system to be adopted.
30 December 2025
EUDR obligations come into force (save for SMEs where obligations come into force from 30 June 2026).
27 March 2026
Member States required to transpose the ECGT into national law.
26 July 2026
Member States required to transpose the CS3D into national law.