ESG Trends 2026 — What Finance Professionals Need to Know

ESG Trends 2026 — Overview

ESG is evolving rapidly in 2026. Mandatory reporting requirements, new standards, regulatory crackdowns on greenwashing, and emerging risk categories are reshaping how companies and investors approach ESG. Here are the most important trends for Indian finance and accounting professionals.

1. Mandatory ESG Reporting — Going Global

ESG reporting is moving from voluntary to mandatory in many major economies, although the pace and the scope differ a lot from place to place, and several rules have been scaled back in 2026.

• India. SEBI's BRSR Core (sustainability reporting with assurance) is being phased in by market capitalisation, from the top 150 listed companies in FY2023-24 to the top 1,000 listed companies by FY2026-27, according to a Benchmark Gensuite summary of the schedule. Disclosures from key value chain partners are also being brought in.
• EU. The Omnibus I Directive, which took effect on 18 March 2026, cut the scope of the Corporate Sustainability Reporting Directive (CSRD). It now covers EU companies with more than 1,000 employees and net turnover above €450 million, so the figure of 50,000+ companies often quoted no longer applies. Companies that have not reported before are expected to start in 2028, on financial years beginning in 2027. See our CSRD compliance guide for accountants.
• ISSB. The IFRS Foundation says more than 45 jurisdictions are on a journey to adopt or otherwise use IFRS S1 and IFRS S2, including 22 with finalised profiles. This is creating a global baseline for sustainability disclosure. Our guide to IFRS S1 and S2 explains the standards.
• UK. The UK Sustainability Reporting Standards, based on the ISSB standards, were published in February 2026. On 30 September 2026 the Financial Conduct Authority published final rules requiring listed companies to report against them on a comply or explain basis, for accounting periods starting on or after 1 January 2027. Read more in our UK SRS explainer.
• US. The SEC's 2024 climate disclosure rule never took effect. The SEC stopped defending it in court in 2025 and in May 2026 moved to rescind it, according to reports at the time. State rules, including in California and New York, may still apply to some companies.

2. Sustainability Assurance — The New Audit Frontier

As ESG reporting becomes mandatory, assurance over sustainability reports is becoming a major service line and a significant career opportunity for auditors. The International Auditing and Assurance Standards Board (IAASB) approved ISSA 5000, the first global standard for sustainability assurance, in 2024. Big 4 firms are expanding their sustainability assurance teams rapidly. In the EU, the Omnibus I changes keep CSRD assurance at the limited level rather than moving to reasonable assurance, and our guide to ESG assurance under CSRD, ISAE 3000 and ISSA 5000 explains how the standards fit together.

3. Greenwashing Regulation

Regulators globally are cracking down on misleading ESG claims, although the EU route has changed.

• The EU's proposed Green Claims Directive stalled in June 2025, when the Commission said it was considering withdrawing it and negotiations were suspended, according to law firm Hogan Lovells. The Empowering Consumers for the Green Transition Directive is separate and is unaffected. It applies from September 2026 and bans generic claims such as "eco" or "green" without proof, and "carbon neutral" claims based only on offsetting.
• SEBI has issued guidelines for ESG fund labelling in India: asset managers must ensure fund holdings match ESG claims.
• The SEC has fined asset managers for misleading ESG fund marketing.

Finance professionals working in ESG communications, fund marketing or compliance need to understand greenwashing risk.

4. Nature-Related Financial Disclosures (TNFD)

The Taskforce on Nature-related Financial Disclosures (TNFD) published its final recommendations in 2023. They are similar to TCFD but cover biodiversity and ecosystem risks. Companies have been adopting TNFD voluntarily, and the ISSB is now working on nature-related disclosures. At its June 2026 meeting the ISSB made tentative decisions on a proposed IFRS Practice Statement on nature, including that companies may refer to TNFD metrics where they help meet IFRS S1. The ISSB has not adopted TNFD as a standard, and had not yet decided when to publish an exposure draft. Finance professionals should understand how TNFD differs from TCFD and how to assess nature-related risks.

5. Transition Finance

How to finance the transition from fossil fuels to clean energy — while maintaining energy security — is a major 2026 issue. Transition finance frameworks, green bonds, sustainability-linked bonds, and blended finance are growing. India's green bond market is expanding significantly.

6. Social and Governance Factors Gaining Prominence

While climate has dominated ESG, social factors (living wages, supply chain labour standards, DEI) and governance (board quality, executive pay, audit independence) are receiving increased scrutiny — especially following corporate governance failures.

Stay ahead of ESG developments through professional qualifications that embed ESG into the curriculum. ACCA's SBR and AAA papers cover current ESG reporting and assurance standards. Explore ACCA with Learnsignal.

7. What This Means for Finance Teams

The main trend in 2026 is not more rules everywhere but a shift towards fewer, more consistent standards, with data quality and assurance becoming the real test. Four practical points follow.

• Check which rules actually apply to you. Scope changed in the EU and the UK in 2026, and older guides are often out of date. Confirm thresholds and dates against current sources before planning.
• Treat sustainability data like financial data. Emissions, energy and workforce numbers need owners, documented methods and controls, because assurance providers will test them.
• Build from the ISSB baseline. Many jurisdictions are aligning with IFRS S1 and S2, so skills in those standards travel across borders.
• Put a policy on paper. A short ESG policy sets out responsibilities and reporting. Our ESG policy template gives a structure you can adapt.

Further Reading

• What is ESG? A Complete Guide for Finance and Accounting Professionals
• CFA ESG Certificate — Complete Guide for Indian Finance Professionals
• ESG Investing — What It Is and How It Works in India
• ESG in ACCA — What ACCA Students Need to Know
• CSRD compliance guide for accountants
• UK Sustainability Reporting Standards explained
• ESG policy template and example statement