The UN Global Compact (UNGC) released Legal Insights for Business Leaders (October 2025), analysing recent sustainability legal developments globally and exploring the role of legal professionals within companies to navigate changing sustainability regulatory requirements.
Human Level’s Take:
- Sustainability has shifted from voluntary to mandatory through new laws in every region of the world. This can make the legal landscape tricky for companies, especially those with global operations and value chains.
- Businesses face a complex, often conflicting global regulatory landscape. Europe, Latin America, Asia-Pacific, Africa and parts of North America are advancing ESG regulations at different paces and levels of coherence.
- The UNGC highlights key regional trends. The EU is currently in flux due to legislative revisions to its sustainability due diligence and reporting laws, while the UK has a more mature, coherent framework. Latin America has a number of ESG regulations fragmented across countries, but greater coherence is in view. Asia-Pacific is rapidly evolving with a focus on climate. Africa is increasing the number of regulations, especially on greenwashing. North America has mixed developments, with advancing ESG regulations in Canada but divergence in the U.S. between federal and state approaches.
- Corporate legal teams can play a strategic role in not only meeting evolving sustainability regulations, but also in advancing a more resilient business that effectively manages its human rights and environmental risks and impacts. They can support integration of sustainability into business decision-making, improve board oversight and accountability, and help foster a culture of responsible conduct.
- The UNGC offers recommendations for companies from diverse legal professionals. These include acting early on upcoming regulations, improving cross-functional alignment and communication within the business to advance more quickly and reduce blind spots, and using sustainability regulations as a strategic tool for resilience rather than just a compliance burden. In addition, transparency with stakeholders (both internal and external) can help build trust and increase accountability. And early, frequent stakeholder engagement and co-creation can build buy-in and increase impact of policies.
Some key takeaways:
- Growing global sustainability regulations: In the past decade, sustainability has shifted from voluntary action to a legal obligation, requiring board-level oversight and strong ESG risk management. Legal risks — especially in companies with global supply chains — are rising, making ESG risk assessments essential for legal protection in case of human rights or environmental impacts in the value chain. In parallel, stakeholder expectations for company practices are growing, with institutional investors, consumers, civil society and financial regulators requiring strong sustainability performance. With the growth of sustainability regulations globally, businesses are confronting a patchwork of different, uncertain and sometimes conflicting requirements that can make compliance even more difficult. The UNGC outlines key developments across regions. In the EU, sustainability due diligence and reporting laws like the Corporate Sustainability Due Diligence Directive and Deforestation Regulation are in flux due to the EU’s Omnibus process, creating an uncertain environment for businesses of all sizes. The UK has a mature, coherent regulatory environment where sustainability considerations have been integrated into corporate governance over the years, though larger and publicly listed companies tend to have a larger burden then small- and medium-sized enterprises. In Latin America many countries have ESG regulations but they tend to be more fragmented across countries. There are now attempts at creating more regional coherence, which may be spurred forward by market pressure. Meanwhile, the UNGC identifies that Asia-Pacific is focusing regulations on climate, with the goal of increasing climate finance and mitigation. The report notes that this region is quickly evolving in its sustainability regulations. In both Asia and Africa, a number of countries are aligning with standards set by the International Sustainability Standards Board (ISSB). In addition, African countries are beginning to increase sustainability regulations, especially on greenwashing, in response to more domestic stakeholder pressure and international regulatory trends. North America shows mixed developments. Canada is advancing voluntary ISSB-aligned sustainability standards and is developing mandatory climate disclosures for federally incorporated businesses. Meanwhile, the U.S. has become a more uncertain regulatory environment, with the federal government rolling back sustainability laws while some states (especially California and New York) are creating new requirements that will apply to many U.S.-based companies. To keep up with state and global expectations, the UNGC recommends that multinational U.S.-based companies maintain strong ESG compliance frameworks.
- The role of corporate legal teams: Legal teams can do more than ensure compliance with the law — they play a central, strategic role in integrating sustainability considerations into the business. The UNGC identifies a few key roles for corporate legal teams. For one, they can support with integrating sustainability into core business decision-making, going beyond legal compliance to ensure human rights and environmental impacts are systematically considered. They can also strengthen oversight and accountability by supporting boards to better integrate sustainability considerations, bringing sustainability into risk and opportunity assessments, and connecting corporate reporting with ESG metrics. In addition, legal teams can help companies prepare to manage their human rights and environmental impacts proactively, including by monitoring regulatory changes. Finally, they can help create a strong internal culture that not only prevents legal violations but also promotes consistent responsible behaviour.
- Recommendations for companies: The guide features a number of recommendations from legal professionals across jurisdictions to help companies navigate the changing regulatory landscape. We highlight a selection of these recommendations here. First, act early, aligning with emerging sustainability regulations before they hit and seeking input from the legal team early on in the process. Second, aim to increase communication and alignment on sustainability across the business, for example by making the legal team a “design partner” in products, not only contracts (for example, via a sustainability dashboard). Cross-functional input and working groups can also help increase alignment on sustainability risks and opportunities and prevent blind spots. Third, treat requirements like sustainability reporting and governance frameworks as strategic levers to build organisational value and reputation, not just a compliance burden. Fourth, develop a culture of internal and external transparency, which can help navigate when stakeholders have competing priorities, build trust and demonstrate progress and accountability on sustainability topics. Fifth, engage stakeholders frequently and early on, including employees, leadership and external partners. Engagement and processes like co-creation of policies can build buy-in and increase impact.
