Summer 2026 was a significant one for sustainability, even if much of it unfolded while you were away.
You're back at your desk, inbox full. Before you work through it, here are 3 developments from June, July, and August worth understanding because they'll shape conversations in sustainability and procurement this autumn.
From record physical climate risk to a new forced labor ban in Scandinavia. A quiet but significant shift in Asian sustainability regulation.
Pressure on companies to act is building from multiple directions at once.
Let's break down:
What is HREDD again?
Human rights and environmental due diligence (HREDD) is the process of identifying, preventing, and addressing adverse human rights and environmental impacts across a company's value chain. It's the core obligation of the EU's Corporate Sustainability Due Diligence Directive (CSDDD).
Nobody missed the headlines: 2026 has been a summer of heat records, wildfires, and water shortages across Europe.
A few developments from the past weeks translate this directly into financial risk.
In July, the world's extra-polar seas hit their hottest surface temperatures on record, with parts of the Mediterranean reaching up to 6°C above normal.
Wildfires scorched over 1.23 million acres across Spain, France, and Italy.
The Seine, Rhine, and Danube saw drastically reduced water levels, disrupting shipping, irrigation, and energy production.
On 8 August, Triodos Bank published a briefing arguing that this summer's heatwaves could reduce EU GDP by 1%, roughly 180 billion EUR in losses, driven largely by lower labor productivity in heat-exposed sectors.
Swedish organization Klimatkollen revealed this week that Sweden's actual climate emissions are likely 3 times higher than official statistics suggest, once consumption-based emissions are included.
Physical climate risk is no longer a future scenario. It's a current-quarter business variable.
In late spring, LinkedIn was full of updates on forced labor import bans driven by US Trade Representative pressure. But a quieter development may have more lasting impact for Nordic companies.
If your due diligence currently covers EU requirements but not Norwegian equivalents, that gap is worth closing.
Much of the European sustainability conversation this year has been about Omnibus - what gets kept, what gets delayed, what gets weakened. The direction has mostly been backward.
The picture in Asia is more complicated and, in some ways one could say, more interesting.
In July, South Korea's Financial Services Commission finalized its sustainability reporting roadmap - and expanded it.
While the EU and US have pulled back on reporting requirements, Korea is heading the other way.
Under phase 1, KOSPI-listed companies with consolidated assets of at least KRW 30 trillion must begin reporting in 2027.
Phase 2 covers companies above KRW 10 trillion by 2028, with further expansion through 2030.
Reporting is based on KSSB 1 and KSSB 2 standards, aligned with ISSB for global interoperability.
For European companies with Korean supply chain partners or investors, this is worth tracking.
In June, China published its 5th National Human Rights Action Plan (2026–2030). For the first time, it includes guidelines for Chinese businesses to align with the UN Guiding Principles on Business and Human Rights.
This is a meaningful signal that the UNGP framework is gaining traction even in contexts that have historically resisted it.
At the same time, in August, China issued an order prohibiting Chinese companies and organizations from cooperating with 6 international sustainability providers, including the Responsible Business Alliance and Verité. The stated reason: allegations that these organizations were assisting with what China characterizes as illegal US sanctions related to forced labor in Xinjiang.
The two moves point in opposite directions.
China is formally embracing human rights frameworks for business while restricting access to the international audit infrastructure that makes those frameworks meaningful in practice.
For companies with supply chains in China, this tension is real and worth monitoring.
These 3 developments don't point to a single trend. What they share is that sustainability risk is no longer confined to regulatory timelines. Physical climate impacts, forced labor enforcement, and geopolitical tensions around supply chain transparency are all moving faster than the policy cycle.
The question worth asking now: does your due diligence process account for where risk is actually building, or where regulation has historically focused?
If you're reviewing your approach heading into Q4, we're happy to help you think it through.
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