Sustainability/ESG

On 16 December 2025, the European Parliament adopted the final Omnibus I text. It reduces the regulatory burden for businesses beyond what was previously anticipated, by simplifying Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) requirements. Key changes include raising the reporting threshold to over 1,000 employees and €450 million turnover, and limiting due diligence to firms with over 5,000 employees/€1.5 billion turnover. Compliance is required by 2029.

On 6 February 2026, the European Commission (EC) published a call for evidence in connection with the Forced Labour Regulation, which applies from 14 December 2027. It will prohibit economic operators from placing, selling, or exporting products made with forced labour in the EU, and so will impact businesses interacting with the EU market.

In January 2026, the High Court ruled that claims of modern slavery, forced labour and exploitation in Dyson’s supply chain will go to trial in April 2027.

The CMA has published guidance to supplement its Green Claims Code. The guidance covers business’ responsibilities in the face of complex supply chains, where different parties can hold the information needed to substantiate green claims. The updated guidance on making environmental claims across supply chains provides greater clarity and warns of enforcement for liability for ‘greenwashing‘ across supply chains.

The Department for Environment, Food and Rural Affairs has published the UK’s first plan to combat PFAS  (per- and poly-fluoroalkyl substances, or ‘forever chemicals’) – persistent substances used in manufacturing which pose long-term environmental and health risks.

The plan sets out a range of measures including: consulting on statutory PFAS limits in England’s drinking water; assessing contamination in estuaries and coastal waters for the first time; increased testing and monitoring including for contaminated land, soils and food packaging; creating new guidance for industrial sites on handling, monitoring and disposing of PFAS; launching a new public website to raise awareness.

RICS has published the fourth edition of its global professional standard on environmental, social and governance (ESG) and sustainability in commercial property valuation. The updated standard, which takes effect from 30 April 2026, sets out how ESG factors should be reflected in valuation advice and responds to regulatory, market and professional developments since the previous edition.

The UK government has published guidance on mergers and acquisitions in respect of extended producer responsibilities (EPR) for packaging.

A reminder that, on 15 December 2025, the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025 was made. It brings the provision of ESG ratings within the FCA’s regulatory scope. Transitional arrangements apply until June 2029, and the Order fully takes effect on 29 June 2028.

Corporate/corporate reporting

The Financial Conduct Authority (FCA) is consulting, until 20 March 2026, on replacing the current rules for listed companies’ sustainability disclosures with a requirement for in-scope listed companies to report against the UK Sustainability Reporting Standards.

The FCA has published Enforcement Watch 1, a new publication designed to cover insights and themes from the regulator’s enforcement work. This first issue discusses the FCA’s updated publicity policy in action; enforcement case priorities; and how the FCA works and shares information with international law enforcement agencies and regulators.

The Financial Reporting Council (FRC) has published an updated edition of its guidance on the strategic report to reflect (among other things) changes in the corporate reporting framework and developments in wider corporate and sustainability-related reporting practice.

The government has published draft updated statutory guidance on the meaning of “significant influence or control” over companies in the context of the regime for people with significant control (PSCs).

A reminder that the government has published guidance on the new duty, which began on 1 January 2026, under which a large company must report on its invoice payment performance and practices in its directors’ report.

Data protection/cyber security/tech and digital

A series of new ICO guidance documents – covering codes of conduct, recognised legitimate interests, international transfers, and subject access requests – are in development with publication expected in winter 2026.

The EC is expected to introduce its Digital Fairness Act, a new initiative aimed at strengthening consumer protection in digital environments, during 2026.

The EC has launched an ICT Supply Chain Security Toolbox to help identify and mitigate cybersecurity risks in supply chains.

On 6 January 2026 the Department for Science, Innovation and Technology published its Cyber Action Plan, designed to address increasingly sophisticated cyber threats to critical digital infrastructure and services.

The UK government has published a progress statement under the Data (Use and Access) Act 2025 (DUAA). It outlines work to prepare a report and economic impact assessment on copyright and AI, due by 18 March 2026. It summarises consultation findings on options for reform, stakeholder engagement, and technical working groups exploring transparency, licensing, and protections for creatives. The upcoming report will detail responses, assess impacts on copyright owners and AI developers, and propose measures to balance creative rights with innovation.

In related news, on 5 February 2026, a number of DUAA provisions came into force under The Data (Use and Access) Act 2025 (Commencement No. 6 and Transitional and Saving Provisions) Regulations 2026. These include (non-exhaustively): introduction of “recognised legitimate interest” as a new lawful base for processing (s70); a data protection by design obligation concerning enhanced safeguards for children (s81); a simplified test for transferring personal data to third countries or international organisations (s85); changes to direct marketing by charities (s114); and changes to data subject rights (s75-77), automated decision making (s80) and ICO powers. The ICO has also published good practice guidance setting out what organisations need to do to be compliant with data protection complaints processes, ahead of new requirements coming into force in June 2026.

The UK government has announced a new partnership with Google DeepMind to open its first automated research lab in the UK next year, accelerating scientific breakthroughs in areas like superconductors, clean energy, and advanced materials. The collaboration also includes priority access for UK scientists to cutting-edge AI tools and expanded work with the AI Security Institute to ensure safe and responsible AI development.

The UK Jurisdiction Taskforce has published a draft legal statement on liability for AI harms under the private law of England and Wales. The statement seeks to address how English common law will impose liability for loss hat resulting from the use of AI. A consultation on the statement closed earlier this month and a response is awaited.

The FCA has launched the Mills Review, to examine how rapidly advancing AI – including generative and increasingly autonomous systems – could reshape retail financial services, competition, consumer behaviour, and regulatory oversight through to 2030 and beyond. Sheldon Mills delivered a speech giving further details.

The EC has published the first draft of its Code of Practice for Transparent AI Systems, covering machine readable labelling of AI generated or AI modified content.

The UK government has expanded its free AI training programme so every adult can access benchmarked courses, aiming to equip 10 million workers with practical AI skills by 2030. The government is also launching an AI and the Future of Work Unit to help ensure workers benefit from AI-driven changes to the economy.

Commercial/general

The UK government has published a new Northern Growth Strategy. Alongside launch of Northern Powerhouse Rail plans, the strategy prioritises: pursuing an economic plan for the Northern Growth Corridor; improved connectivity within and between city regions; increasing effective city size, density and town regeneration; supporting business investment and innovation; investing in skills and human capital, including working with regional leaders to ensure £570 million investment in expanding local college training facilities and £902 million Local Growth Fund matches regional needs and plugs skills gaps; and enriching culture through expanding/improving the National Railway Museum in York, the Royal Armouries in Leeds, and the Liverpool museums. Further detail on the economic plan is expected this spring.

The National Wealth Fund has published its new strategic plan. The plan sets out the ambition to drive more than £100 billion of investment into companies, infrastructure and supply chains. It includes 3 strategic ambitions: 1. unlocking growth opportunities on the pathway to clean energy by accelerating investment into the most critical projects, technologies and industries that enable decarbonisation; 2. providing financing and expert advice to significant projects throughout the UK via the Regional Project Accelerator; 3. strengthening sovereign and strategic capabilities by investing in growth opportunities underpinning the UK’s national security, and backing domestic supply chains for growth and resilience including critical minerals, defence, green steel and AI.

The Department for Business and Trade (DBT) is consulting, until 31 March 2026, on legislative proposals to refine Competition and Markets Authority (CMA) mergers and markets procedures.

New rules governing consumer subscription contracts in the UK are expected to come into force later in 2026. Under the new regime, introduced under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), consumers should be given: clearer information when they first sign up; a cooling-off period, allowing them to withdraw if they change their minds; and reminders before subscriptions renew. Further consultation and CMA guidance is expected, but this is definitely ‘one to watch’. Businesses may need to review and modify existing contractual and supply arrangements, as well as customer relationship management policies and practices, to ensure compliance.

Also in connection with the DMCCA, the CMA is consulting, until 19 March 2026, on a comprehensive update to its guidance on unfair contract terms. The update reshapes how fairness and transparency in consumer contracts are assessed, reinforces the CMA’s new enforcement powers under the DMCCA, and sets expectations for how key terms should be presented.

People

The Employment Rights Act 2025 (ERA) received Royal Assent on 18 December 2025. For the latest on implementation of the Act’s provisions, click here to access our tracker.

The government has dropped plans requiring workers to sign up to a new mandatory digital ID in order to prove their right to work in the UK. In related news, the government has announced plans for a mandatory national digital ID scheme. The House of Commons Library has published a briefing which explains what digital ID is and summarises the debates around it.

On 6 February 2026, the DBT launched a consultation, open until 1 May 2026, on the agency work regulatory framework. The consultation considers how regulation of the temporary labour market should address umbrella company activity and on broader, modernising changes.

It addresses various areas, including: payment and provision of information about agency workers; transparency on pay, contracts and employment rights; and current working practices and administration. It’s anticipated that further consultation on more detailed proposals to streamline and simplify the regulatory framework may follow.

Our Employment team as published an article on practical steps to avoid risk in connection with seasonal workers and continuous service.

The government has announced the next phase of delivery of its industrial strategy, with a focus on attracting more global talent to the UK.  It has also published a new talent pathway to provide a “single, clear ‘shop window’ for exceptional global talent” considering relocating to the UK.

The Health and Safety Eexecutive has published new Astutis research which finds that over half of Brits (52.6%) are making mistakes at work; 1 in 4 have rung in sick at least once; over 1 in 4 (28.5%) have missed deadlines; and a third (32.9%) have clashed with someone in the workplace, all due to stress.

The government is consulting on the new process for employers to follow when they are unable to accept a statutory flexible working request. The ERA 2025 will introduce a test of reasonableness where an employer refuses a statutory flexible working request. Non-statutory guidance will support employers to follow the new process.

The UK government has expanded its free AI training programme so every adult can access benchmarked courses, aiming to equip 10 million workers with practical AI skills by 2030. The government is also launching an AI and the Future of Work Unit to help ensure workers benefit from AI-driven changes to the economy.

The draft National Minimum Wage (Amendment) Regulations 2026 have been laid before Parliament. With effect from 1 April 2026, the rates of the national minimum wage (NMW) will be:

• National Living Wage (NLW) (aged 21 and over): £12.71 (currently £12.21).T
• he 18 to 20-year-old rate: £10.85 (currently £10.00).
• The 16 to 17-year-old rate: £8.00 (currently £7.55).
• Apprentice rate: £8.00 (currently £7.55).
• Accommodation offset: £11.10 (currently £10.66).