Environmental, social and governance (ESG) expectations are no longer limited to corporate reporting. They are increasingly influencing how luxury products are designed, sourced, manufactured, marketed and financed. The fourth edition of the ESG Policy Guide, produced by Positive Luxury in collaboration with Baker McKenzie, examines the regulatory developments that luxury businesses should be monitoring across Europe, the UK, the Americas, Asia Pacific and the Middle East.
Rather than presenting sustainability as a standalone initiative, the guide argues that ESG has become a core business consideration. New legislation is placing greater emphasis on product durability, supply chain transparency, climate planning, biodiversity protection, responsible labour practices and credible public reporting. As a result, compliance is becoming closely linked to commercial resilience, investor confidence and long-term competitiveness.
One of the strongest themes throughout the report is the rapid expansion of circular economy requirements. Luxury brands are expected to move beyond traditional product lifecycles by designing goods that can be repaired, recycled and traced throughout their journey. The guide highlights upcoming Digital Product Passport requirements in the European Union, alongside broader regulations covering extended producer responsibility, waste reduction and the disposal of unsold products. Practical examples from brands including Monica Vinader, Harvey Nichols, ME+EM and Bamford demonstrate how businesses are already adapting these principles within their operations.
Climate transition also receives significant attention. The report notes that investors, regulators and commercial partners increasingly expect businesses to establish measurable emissions targets and credible transition plans. While regulatory approaches differ between regions, the direction is consistent. Luxury companies are expected to demonstrate meaningful progress rather than broad commitments. According to Maria Piontkovska, Partner at Baker McKenzie, “Committing to carbon neutrality positions luxury businesses for long-term success in a market that is increasingly shaped by sustainability.”
Beyond environmental issues, the guide explores growing scrutiny of human rights, forced labour, ESG disclosures and supply chain governance. It also addresses emerging topics including artificial intelligence, sustainability collaboration between competitors, biodiversity protection and transition finance. Across each area, the emphasis is on improving transparency, strengthening governance and preparing for regulations that continue to expand across global markets.
Overall, the ESG Policy Guide 2026 serves as a practical reference for executives, sustainability leaders and legal teams working within the luxury sector. Rather than predicting distant trends, it focuses on legislative developments that are already influencing business decisions and provides examples of how luxury brands can prepare for a regulatory environment where ESG considerations are increasingly integrated into everyday operations.
Read the full report: https://www.bakermckenzie.com/-/media/files/insight/guides/2026/pl-esg-policy-guide-2026.pdf
Sources
Positive Luxury & Baker McKenzie. ESG Policy Guide: What Sustainability Legislation Means for Luxury Brands. Fourth Edition, March 2026.
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