5 August 2025
Jillian Giberson, Principal Consultant, Head of Policy & Regulation
After the first half of 2025, the UK and EU sustainability regulatory landscape looks nearly unrecognisable when compared with last year. Following months of U-turns, new proposals, delays and consultations, continued regulatory uncertainty seems to be the only certainty.
But beneath the flux lies a clear message: regulatory pressure isn’t going anywhere, it’s just evolving. At Longevity Partners, we believe this evolution should be seen as a window of opportunity. Regulation can (and should) be leveraged as a catalyst for bolder, more strategic climate action.
Let’s unpack this year’s highlights.
The EU: A Mixed Bag
Following the 2024 Parliamentary elections, the European Commission has set out a new strategy, taking aim at regulatory burden and favouring economic growth and innovation. The Competitiveness Compass outlines a strategic re-direction in how sustainability is integrated into public policy, focusing on financial incentives rather than compliance mechanisms.
The subsequent Omnibus Package highlights this well: a proposed substantial reduction in subject companies (about 80%) and an easing of reporting requirements for those still in scope. In addition, we are likely to see reductions in the EU Taxonomy’s reporting thresholds, as well as in the CSDDD’s due diligence reporting requirements. For many real estate entities, this could cause confusion around when and if they are subject to any non-financial reporting requirements in the EU.
However, at an asset-level, regulatory requirements continue to grow in stringency, as we pass the halfway mark for the deadline to transpose the revised Energy Performance of Buildings Directive into national legislation. There, asset owners and developers can look forward to increased requirements surrounding electric vehicle charging infrastructure, renewable energy integration and minimum energy performance standards, for both standing and new assets.
The UK: New Consultations and Mandatory Reporting (Maybe?)
Regulatory change in the UK has been equally tumultuous. Just a few weeks ago the UK government announced plans to scrap the long-awaited UK Green Taxonomy, a framework intended to define what constitutes a sustainable financial activity and provide clarity on sustainability claims in the market.
Instead, the government has redirected focus to the Sustainability Reporting Standards (UK SRS) and mandatory transition plans. The UK SRS will likely implement mandatory sustainability disclosures on risks and opportunities for companies of a certain size. In addition, the government is reviewing mandating UK-regulated financial institutions and FTSE 100 companies to establish transition plans aligned with the 1.5 C commitment set out in the Paris Agreement.
Asset level regulations in the UK remain in flux as well, with the highly anticipated Future Homes and Buildings Standards still unconfirmed. The government has signalled that it will review the minimum energy performance standards (MEES) for domestic and non-domestic rental properties, however, as of July 2025, the government has not confirmed whether the existing MEES, minimum EPC E, will be increased. A consultation to raise the MEES in the social rented sector is open from July to September.
What are Businesses to Do?
With rules in both the UK and EU continuing to shift, real estate owners and managers must prioritise ongoing policy monitoring. Reporting strategies should remain flexible as requirements under the CSRD, CSDDD, and UK SRS continue to evolve in the second half of 2025.
Indeed, now is the time to assess internal reporting processes and pinpoint areas where, sustainability risk management can drive value. Regardless of mandatory disclosure requirements, or lack-thereof, identifying, mitigating and leveraging non-financial risks and opportunities can future-proof operations and open the door to financial incentives, green loans and improved performance.
The cost of inaction is rising. Climate-related risks and insurance premiums are already eroding asset performance. A lack of sustainability KPIs or green initiatives means managers are leaving money on the table, from interest rate reductions on green loans to eligibility for public funding and capturing green premiums.
At Longevity Partners, we analyse regulatory risks to help clients unlock strategic value. Our approach empowers businesses to turn risk management into a competitive advantage, identifying opportunities that drive sustainable growth and long-term resilience.
Stay tuned for the launch of our newest platform, that streamlines regulatory monitoring making it easier than ever to stay ahead of evolving ESG requirements.
