The March 2026 edition of Pierag’s ESG Perspective presents a curated overview of key global developments shaping the ESG and sustainability landscape. As governments, regulators, and investors continue to strengthen expectations around transparency, accountability, and climate action, businesses face a complex and rapidly evolving compliance environment. This edition covers five priority areas: carbon markets and CBAM pricing, sustainability reporting framework reform, circular economy and packaging regulation, climate policy, and sustainable finance. For CFOs, sustainability leads, and audit committees, these developments are active compliance inputs for FY2026 planning, supply chain design, and ESG disclosure preparation.
Download the March 2026 ESG Perspective Edition (PDF)
Carbon Markets: CBAM Enters Its Definitive Phase
The EU Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026, ending the two-year transitional period. From 2026, importers of steel, aluminium, cement, fertilisers, hydrogen, and electricity into the EU must be authorised CBAM declarants and track embedded emissions throughout the calendar year. [1] The first official CBAM certificate price, published by the European Commission on 7 April 2026, was EUR 75.36 per tonne CO2e, based on the Q1 2026 EU ETS quarterly average. [2] The first annual CBAM declaration covering 2026 imports, along with certificate surrender, is due 30 September 2027.
For Indian exporters in steel and aluminium, CBAM is now a direct, quantifiable cost variable in export pricing and procurement decisions. Pierag’s ESG and Sustainability Advisory supports organisations in assessing CBAM exposure and building emissions data infrastructure required for accurate certificate calculation.
Sustainability Reporting: ESRS Omnibus I and ISSB Adoption
The Omnibus I directive amending CSRD and CSDDD, published in the EU Official Journal on 26 February 2026, was in Member State transposition planning throughout March. [3] Omnibus I substantially reduces mandatory ESRS data points and raises the CSDDD compliance threshold to companies with more than 5,000 employees and EUR 1.5 billion in turnover, with mandatory CSDDD compliance moved to July 2029.
The EU Taxonomy Simplifying Delegated Act, in force from 28 January 2026, reduced Article 8 reporting data points by approximately 70% and introduced a 10% materiality threshold below which taxonomy eligibility assessment is not required. [4] ISSB-aligned adoption continued to expand through Q1 2026, with approximately 40 jurisdictions having adopted or in active regulatory development on IFRS S1 and S2. The UK published ISSB-aligned Sustainability Reporting Standards in late February 2026.
Circular Economy: EU Packaging Regulation Applies from August 2026
The EU Packaging and Packaging Waste Regulation (PPWR), Regulation (EU) 2025/40, applies from 12 August 2026 across all EU Member States, replacing the 1994 Packaging Waste Directive. [5] It introduces requirements covering recyclability, recycled content targets, extended producer responsibility, reuse and refill obligations, and waste reduction mandates. All packaging placed on the EU market must be fully recyclable by 2030, with plastic packaging subject to increasing recycled content targets for 2030 and 2040. [6]
The European Commission published implementation guidance on 30 March 2026. For manufacturing, FMCG, food and beverage, retail, and logistics businesses operating in or exporting to the EU, 12 August 2026 is a hard compliance deadline. The Ecodesign for Sustainable Products Regulation (ESPR) also progressed in this period, with its first working plan covering 2025 to 2030, targeting textiles, electronics, batteries, tyres, packaging, and steel. [7]
Climate Policy and Sustainable Finance
The March 2026 Brussels European Council Summit reaffirmed the EU ETS, with no Member State supporting suspension. [2] The Fit for 55 reform continues with the Linear Reduction Factor at 4.3% per year through 2027. Performance-linked sustainability bonds and blended finance instruments are gaining regulatory recognition across multiple jurisdictions, expanding access to sustainability-linked capital for organisations with credible transition credentials.
Frequently Asked Questions
What is the Q1 2026 CBAM certificate price?
EUR 75.36 per tonne of CO2e, published by the European Commission on 7 April 2026, based on the Q1 2026 EU ETS quarterly average. The first CBAM declaration and certificate surrender for 2026 imports is due 30 September 2027. [1][2]
When does the EU Packaging Regulation apply?
From 12 August 2026 across all EU Member States, replacing the 1994 Packaging Waste Directive. It introduces recyclability, recycled content, EPR, and waste reduction requirements. [5][6]
Where can I find other editions of Pierag’s ESG Perspective?
All editions are in Pierag’s Insights hub.
References
[1] International Carbon Action Partnership (ICAP). (2026). EU ETS: Definitive CBAM phase from 2026. Retrieved from https://icapcarbonaction.com/en/ets/eu-emissions-trading-system-eu-ets
[2] Homaio. (2026). EUA carbon price in 2026: Q1 EU ETS average and CBAM certificate pricing. Retrieved from https://www.homaio.com/post/2030-eua-price-predictions-expert-analysis-of-3-scenarios
[3] Freshfields. (2026, February). Sustainability reporting round-up: Omnibus I directive published in EU Official Journal on 26 February 2026. Retrieved from https://www.freshfields.com/en/our-thinking/blogs/sustainability/sustainability-reporting-round-up-news-from-key-markets-102mllq
[4] Eurosif. (2026). EU Taxonomy: Simplifying Delegated Act in force 28 January 2026. Retrieved from https://www.eurosif.org/policies/eu-taxonomy-sustainable-investments/
[5] Latham and Watkins. (2026, April 24). EU Packaging and Packaging Waste Regulation: Summary and March 2026 implementation guidance. Retrieved from https://www.lw.com/en/insights/european-packaging-and-packaging-waste-regulation-summary-of-provisions-and-new-guidance
[6] European Commission, DG Environment. (2026). Packaging and Packaging Waste Regulation (EU) 2025/40: Application from 12 August 2026. Retrieved from https://environment.ec.europa.eu/topics/waste-and-recycling/packaging-waste/packaging-packaging-waste-regulation_en
[7] Umweltbundesamt. (2026, February 10). Ecodesign for Sustainable Products Regulation: First working plan 2025 to 2030. Retrieved from https://www.umweltbundesamt.de/en/topics/economics-consumption/products/ecodesign/ecodesign-for-sustainable-products-regulation
