ESG after the Omnibus Proposal: Regulations, market forces, and climate risk

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Disclaimer: New EUDR developments - December 2025‍

In November 2025, the European Parliament and Council backed key changes to the EU Deforestation Regulation (EUDR), including a 12‑month enforcement delay and simplified obligations based on company size and supply chain role.

Key changes proposed:

New enforcement timeline: 30 December 2026 for large/medium operators, 30 June 2027 for small/micro operators
Simplified DDS: One-time declarations for small and micro primary producers
Narrowed scope: Most downstream actors and non‑SME traders would no longer need to submit DDSs
New DDS requirement: Estimated annual quantity of regulated products must be included

These updates are not yet legally binding. A final text will be confirmed through trilogue negotiations and formal publication in the EU’s Official Journal. Until then, the current EUDR regulation and deadlines remain in force.

We continue to monitor developments and will update all guidance as the final law is adopted.

The Science Based Targets initiative (SBTi) provides a framework for companies to set ambitious climate targets aligned with the latest climate science. SBTi validation signals to stakeholders that your targets are credible and achievable. In this article, we explain what SBTi validation requires and how to prepare.

What is SBTi Validation?

SBTi validation is a third-party assessment of your company's near-term and net-zero greenhouse gas reduction targets. For targets to be validated by SBTi, they must:

Be science-based: Aligned with limiting warming to 1.5°C (or well below 2°C)
Cover all scopes: Include Scope 1, 2, and material Scope 3 emissions
Be ambitious: Demonstrate meaningful reductions from baseline year
Be time-bound: Near-term targets within 5-10 years, net-zero by 2050 or sooner
Have credible pathways: Include implementation strategies and interim milestones

SBTi Validation Criteria

Target Coverage

Your targets must cover:

At least 95% of your Scope 1 and 2 emissions
All material Scope 3 categories (SBTi defines materiality at 40% or greater)
Both absolute and intensity-based targets may be acceptable depending on your industry

Target Stringency

Targets must align with sector-specific pathways aligned to a 1.5°C trajectory. SBTi provides sector guidance that specifies minimum reduction rates for different industries.

Supporting Actions

Your submission must demonstrate:

Planned investments in emissions reduction
Operational changes and efficiency improvements
Product innovations and business model changes
Transition strategies for carbon-intensive operations

Preparing for SBTi Validation

Conduct comprehensive emissions assessment: Get accurate Scope 1, 2, and 3 baseline
Engage cross-functional teams: Finance, operations, supply chain, and sustainability must align
Review SBTi sector guidance: Understand minimum reduction rates for your industry
Set preliminary targets: Use SBTi resources to calculate science-based reduction rates
Develop implementation roadmap: Outline how you'll achieve each target
Document evidence: Prepare supporting documents for validation submission
Submit and validate: SBTi reviews and provides feedback; refine as needed

Common Challenges

Scope 3 data: Obtaining reliable supplier emissions data is often the biggest bottleneck
Baseline year consistency: Ensuring historical data is complete and comparable
Target stringency: Balancing ambition with operational feasibility
Cross-functional alignment: Getting business leaders to commit to ambitious targets

Conclusion

SBTi validation demonstrates your company's commitment to climate action and provides a credible framework for setting and achieving ambitious targets. By preparing thoroughly and engaging stakeholders across your organization, you can successfully achieve validation and accelerate your climate transition.

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