Global ESG & CSR Regulations in 2025: What’s New and What It Means for Businesses

The year 2025 has emerged as a landmark moment for environmental, social, and governance (ESG) and corporate social responsibility (CSR) regulations worldwide. With rising stakeholder pressure, climate risks, and investor demand, countries across the globe are updating their compliance frameworks—not just to encourage sustainability, but to mandate it.

Increase in the number of ESG/CSR Regulations Country-wise

The Surge in ESG and CSR Regulations

According to recent policy tracking, over 40 significant ESG and CSR-related regulations have been introduced globally in 2025 alone. The trend is not confined to developed economies—it spans continents, reflecting a shared urgency to align corporate activity with climate and social outcomes.

As shown in the chart above:

• Europe continues to lead with 12 new regulations, including updates to the Corporate Sustainability Reporting Directive (CSRD) and new requirements under the Green Deal Industrial Plan.

• The United States follows with 9 key regulatory shifts, notably the SEC’s final rule on climate risk disclosure for publicly listed firms.

• India has introduced 7 new ESG mandates, including a compulsory ESG risk scoring model for the top 1,000 listed entities and updated provisions in the BRSR Core framework.

• China, along with emerging economies in Asia and Africa, is stepping up compliance with green finance taxonomies, supply chain due diligence, and carbon emission tracking tools.

  
  

Country-Specific Highlights

European Union: In January 2025, the EU’s CSRD was officially extended to cover small and medium-sized enterprises (SMEs) engaged in high-impact sectors such as energy, construction, and agriculture. Firms are now required to disclose Scope 1, 2, and 3 emissions and submit third-party-verified sustainability reports. Penalties for non-compliance have increased up to €10 million.

United States: The SEC's climate disclosure rule now mandates companies to disclose climate-related risks in annual filings, including scenario analysis for 1.5°C and 2°C warming pathways. This applies to all companies with market capitalisation over $500 million. In parallel, the Department of Labor has issued fiduciary ESG guidance for pension funds.

India: The Securities and Exchange Board of India (SEBI) has strengthened the BRSR Core requirements, making ESG score disclosures mandatory for mutual funds and insurance companies as well. Additionally, the Ministry of Corporate Affairs has launched a framework tying CSR spending with measurable SDG-linked outcomes.

China: China’s Ministry of Ecology and Environment launched a national carbon disclosure registry, applicable to 5,000+ companies across manufacturing and logistics. This aligns with the country’s target of reaching peak emissions by 2030 and carbon neutrality by 2060.

Implications for Businesses

These regulatory shifts mean that ESG is no longer optional—it is a compliance imperative. Companies that fail to act risk:

• Legal penalties and reputational damage

• Loss of investor confidence

• Exclusion from global supply chains

However, those that adapt early stand to gain. McKinsey estimates that companies with high ESG compliance see 10–20% lower capital costs and up to 30% improvement in stakeholder trust.

Conclusion

2025 marks the beginning of a regulatory wave that demands accountability, transparency, and measurable impact. Whether you're a global conglomerate or an SME, now is the time to align with these evolving frameworks—or risk being left behind.