- within Environment topic(s)
The past few months have proved more than ever that predicting tomorrow's headline is a fool's game. While that illustrates the uncertainty of today's world, it also serves as a timely reminder that short-term, reactive strategies rarely maximise opportunities. That is never more true than on sustainability issues, where striking the balance between immediate and longer-term priorities is the name of the game.
In this edition of our Circular, we take a closer look at emerging risks and opportunities in the ESG landscape. It is critical for businesses to stay ahead of these developments, so that they can calibrate their own approaches - minimising the downside, and planning optimistically and with purpose to find where the upside lies.
It is not possible to swerve the reality that ESG continues to dominate the legal, regulatory, and investment agendas, particularly in the UK and Europe, shaping decision-making at every level. As we move through 2026, businesses face a rapidly changing climate risk environment—from landmark legal cases and shifting government policy, through evolving disclosure requirements, to the challenges of decarbonising supply chains and adapting to new investment frameworks.
In this edition, we analyse the UK government's latest moves to recalibrate renewable energy subsidies, the Shell/Odette litigation that could reshape liability for climate harm, and the heightened scrutiny now facing sectors from fashion to financial services. As new sustainability reporting standards come into force and strategic reforms transform infrastructure and data centre investment, we highlight practical steps for risk management, regulatory compliance, and long-term business resilience.
Enjoy reading – we hope this Circular helps your business to look for opportunities amongst current uncertainties, and to protect itself against sustainability risks which are far from abating.
Heather Gagen| Head of Dispute Resolution, Co-Head of ESG & Impact
TS Take
In early 2026, the UK government confirmed that it will, (in effect), reduce the amount of indexation on longstanding renewable energy subsidies, to reduce green energy levies on consumer bills. Read more here.
For those not directly affected, a UK government decision on subsidy indexation may not sound like the biggest deal. But it is a great example of both the politics around the cost of Net Zero, and the wider challenge facing all policy makers on sustainability: balancing flexibility and certainty. Whilst the government's mid-course change in the terms of these 'guarantees' of green returns is understandable, given the more challenging than expected economic conditions, it risks deterring investors just as the UK is trying to attract more green capital. It also underscores the difficulty of creating stable policies that encourage long-term investment amidst a rapidly changing world and unknown future. And yes, achieving sustainability can feel like laying tracks in front of a moving train, but policy makers everywhere must focus on the long-term destination of that train and commit to routes accordingly - just as they expect from businesses.
ESG Matters
If I were a GC, here's the one ESG topic that would be top of my radar this quarter:
Time to take stock. We're not exactly in smooth waters in terms of changes to regulations (in fact smooth waters might be a thing of the past), and at this early stage, it is too early to predict the knock-on effects of the Middle East conflict on energy supply and associated protective measures, but the uncertainty of recent months around a number of key sustainability-related laws is beginning to lift.
Sarah-Jane Denton| Director, Operational Risk & Environment
This quarter in the round
The topics covered in this issue cover two key themes:
Theme 1: Focus on ESG risk
Theme 2: Regulatory trends
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