Luxury businesses must take stock of internal systems to ensure compliance with maturing environmental, social and governance expectations across jurisdictions, according to the results of a 2026 study released this week by global law firm Baker McKenzie and luxury sustainability experts Positive Luxury.
The results build on the firms’ 2024 report, which predicted that the then-upcoming global ESG regulations would be a catalyst for transformation within the luxury sector.
The ESG Policy Guide: What Sustainability Legislation Means for Luxury Brands – now on its fourth edition – reports that global policymakers have entered a new phase with sustainability rules shifting to concrete expectations around circular design, substantiated environmental claims, traceable supply chains and structured climate reporting. While regulators across jurisdictions are aligning on the information they want luxury companies to disclose and the quality of required supporting evidence, global markets continue to differ in the scope and pace of their legislation.
Katia Boneva Desmicht, who leads Baker McKenzie’s global consumer goods and retail group, said: “Across jurisdictions, we are seeing a shift toward clearer definitions, tighter claims standards and more structured reporting. The overall direction is consistent, even if the instruments differ. 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.”
The tightening of global plastic regulation illustrates the challenges luxury brands face. In Europe and the UK, brands must comply with no less than four regulations – the EU Single Use Plastic Directive; the EU Packaging and Packaging Waste Regulation; the Registration, Evaluation, Authorisation and Restriction of Chemicals; and the UK Plastic Packaging Tax – in addition to requirements under the UN Global Plastic Treaty.
In the Americas, US state-level legislation is driving change, including California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act and similar rules in Oregon, Minnesota, Maine, Washington and Maryland. These various state laws will affect luxury brands selling into these regions, requiring registration, reporting, fee payment and redesign of packaging to meet recyclability standards. Latin America is similarly tightening rules on plastics and packaging, creating strong incentives for luxury brands to innovate in sustainable design.
In Asia Pacific, there are similar efforts to reduce plastic waste. Hong Kong, China and South Korea have banned certain single-use plastic products in the food and beverage and hospitality sectors. Malaysia imposes a monetary pollution charge on each plastic bag. Major cities in the Philippines have banned the use of single-use plastic containers amid proposed legislation for a national ban. This year, Japan introduced new design certification standards for several categories of plastic-containing products, including beverage polyethylene terephthalate bottles and household cosmetic containers, with enhanced environmental designs.
Baker McKenzie partner Eva-Maria Ségur-Cabanac explained: “Packaging is a signature of luxury, an extension of the brand experience. As regulations tighten, luxury brands can lead the way by reimagining packaging with sustainable materials, elegant minimalism and innovative reuse models. Transparent communication about packaging choices and recycling options can further elevate the unboxing moment, turning sustainability into a mark of distinction.”
The report notes that luxury brands’ ability to provide credible sourcing data will become one of their most defining operational challenges over the next two years, particularly regarding forced labour. New laws in Europe and the US require brands to demonstrate clear traceability, often beyond first-tier suppliers and to maintain documentation that authorities can verify. For example, brands are increasingly expected to provide detailed reporting on human rights performance, including how they identify, prevent and address forced labour and modern slavery risks within their supply chains. This is especially important for luxury supply chains, which can include multiple regions and involve small artisanal producers.
Among jurisdictions, the EU is leading the way in imposing transparency requirements on rating providers and setting rules for their conduct, an approach likely to be adopted by other regions. The EU’s regulation on ESG rating activities is significant because these ratings influence investor decisions and voluntary reporting approaches.
Global approaches are also aligning in the climate reporting area. In the US, state-level developments rather than federal are pushing companies toward structured disclosures. APAC jurisdictions, including Japan, Singapore and Australia, are adopting standards from the International Sustainability Standards Board, which creates a clearer baseline for multinational companies. This trend is moving faster than many anticipated, and brands with international footprints may be subject to several reporting regimes concurrently.
Positive Luxury emphasised the broader implications of the report’s findings. Jamie Moore, Positive Luxury managing director, said: “Luxury is at a crossroads. 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. Credibility will be defined not by what a brand promises, but by what it can prove.”
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