Luxury brands are entering a pivotal year as ESG regulation becomes more prescriptive and operational worldwide, according to a new guide from Positive Luxury and global law firm Baker McKenzie. The analysis finds that regulators in Europe, the US, APAC, the Middle East and Latin America are moving from high-level principles to detailed disclosure requirements on circular design, substantiated environmental claims, traceable supply chains, and structured climate reporting.
Katia Boneva‑Desmicht of Baker McKenzie explained, “Across jurisdictions, we are seeing clearer definitions, tighter claims standards and more structured reporting. For luxury businesses, now is the moment to align internal systems with regulatory expectations.”
Circularity is a key focus. The EU’s Ecodesign for Sustainable Products Regulation, the Digital Product Passport framework, and emerging US and APAC standards require brands to measure and communicate the environmental impact of materials and products. Environmental claims are under growing scrutiny, with authorities demanding evidence, creating closer collaboration between legal, compliance, and marketing teams.
Supply chain transparency is also tightening, particularly regarding forced labour and deforestation. Brands must maintain verifiable traceability beyond first‑tier suppliers. Climate reporting is increasingly aligned across regions, with APAC adopting ISSB-aligned standards and the US seeing state-level pressure. Even the Middle East is introducing frameworks that influence commercial operations.
Jamie Moore, Managing Director of Positive Luxury, said: “Luxury is at a crossroads. Sustainability is moving from aspiration to accountability. Credibility will be defined not by what a brand promises, but by what it can prove.”
The guide concludes that while differences remain across markets, the direction is clear: increased disclosure, more detailed evidence, and measurable sustainability commitments. 2026 offers an opportunity for luxury brands to strengthen governance, embed transparency, and prepare for future ESG harmonisation.
Download the guide here.
