Brazil's Amazon river snaking through a tropical rainforest. Image credit: Shutterstock, Curioso Photography
New cross‑jurisdictional analysis shows that 2026 marks a decisive moment for the luxury business as environmental, social and governance (ESG) regulation across major markets becomes more prescriptive, more interconnected and considerably more operational in nature.
The analysis from Positive Luxury and global law firm Baker McKenzie finds that global policymakers have entered a new phase in which sustainability rules move from principles‑based frameworks to concrete expectations around circular design, substantiated environmental claims, traceable supply chains and structured climate reporting.
“Across jurisdictions, we are seeing a shift toward clearer definitions, tighter claims standards and more structured reporting,” said Katia Boneva‑Desmicht, Paris-based global chair of Baker McKenzie's global consumer goods and retail group, in a statement.
“The overall direction is consistent, even if the instruments differ,” she said.
Positive Luxury is a leading sustainability expert for global luxury, working across fashion, beauty, jewelry, premium drinks, interiors and travel. The London-based company helps brands meet higher standards for consumers and the environment via verified action, data-driven insight and credible communications.
Within Baker McKenzie’s consumer goods and retail practice, the law firm advises some of the world's leading luxury brands, high-street retailers, food and beverage companies, and international hospitality groups with legal advice and support.
Clearly transparent
According to the new guide on environmental, social and governmental compliance, the most significant development this year is not the volume of regulatory activity but its maturity.
Regulators in Europe, United States, Asia Pacific, Middle East and Latin America are beginning to converge on the type of information they want companies to disclose and the quality of supporting evidence required.
At the same time, approaches differ in pace and scope, creating an environment in which luxury brands often operating across several regions simultaneously must interpret how various laws interact and where expectations overlap.
Ms. Boneva‑Desmicht described this shift as one defined by clarity rather than disruption.
“For luxury businesses, this is an important moment to take stock of internal systems and ensure they align with the level of transparency regulators now expect,” she said.
One of the most notable themes in the analysis is the growing emphasis on circularity, per the report.
In the European Union, developments such as the Ecodesign for Sustainable Products Regulation and the forthcoming Digital Product Passport framework require brands to understand, measure and communicate the environmental profile of materials and designs more rigorously.
Similar pressures are emerging in the U.S., where state‑level laws on packaging, plastics and textile recovery are taking effect, and in APAC, where governments are introducing recyclability frameworks and updated product standards.
Rather than high‑level aspirations, circular economy policies are becoming detailed operational requirements, particularly for sectors such as fashion, accessories and beauty.
Proof positive
Environmental claims are also entering a more scrutinized phase, according to the guide.
Authorities in Europe, Latin America and parts of Asia are increasingly demanding evidence behind sustainability-related statements, with penalties, product restrictions and legal action becoming more common where marketing claims lack substantiation.
This trend is prompting closer collaboration between legal, compliance and marketing teams, as environmental communication becomes subject to the same evidentiary standards as financial disclosure.
Supply chain expectations continue to expand, particularly in relation to forced labor and deforestation.
New laws in Europe and the U.S. require brands to demonstrate clear traceability often beyond first‑tier suppliers and to maintain documentation that can be verified by authorities.
This is increasingly relevant for luxury supply chains, which often span multiple regions and involve small artisanal producers.
The analysis suggests that the ability to provide credible sourcing data will become one of the luxury business’ most defining operational challenges in the next two years.
Weather vein
Climate reporting is another area where global approaches are beginning to align.
While the U.S. federal landscape is unsettled, state‑level developments and investor expectations continue to push companies toward structured disclosures.
Meanwhile, APAC jurisdictions, including Japan, Singapore and Australia have begun adopting ISSB‑aligned standards, creating a clearer baseline for multinational companies.
This trend is moving faster than many anticipated, and brands with international footprints may find themselves subject to several reporting regimes concurrently.
The Middle East, traditionally less associated with sustainability regulation, is now introducing frameworks that influence commercial practice, particularly in the United Arab Emirates, where new climate legislation and a national carbon credit registry are beginning to affect contracts, leases and partnerships.
The guide finds that although most luxury businesses are not directly regulated, they should expect ESG obligations to flow indirectly through commercial relationships.
The analysis concludes that while regulatory divergence remains a challenge, the underlying direction across markets is becoming more consistent: increased disclosure, more detailed evidence requirements and a growing expectation that sustainability commitments are backed by measurable action.
THE GUIDE SUGGESTS that 2026 offers luxury brands an opportunity to align global practices before further harmonization takes shape, strengthening governance and ensuring that internal systems are resilient enough to support future regulatory demands.
“Luxury is at a crossroads,” said Jamie Moore, managing director of Positive Luxury. “As regulation matures across markets, sustainability is moving from aspiration to accountability.
“For luxury brands – and their suppliers – it is an opportunity to strengthen trust, embed transparency into operations and turn sustainability into a driver of resilience and growth,” he said.
“This guide is designed to help brands to navigate that shift and move forward with clarity and confidence. Credibility will be defined not by what a brand promises, but by what it can prove.”