ESG trends to watch in 2026: Part 2: How AI, climate transition planning, supply chains and environmental rules are evolving

The 2026 ESG landscape marks a transition from the reactive monitoring of 2025 toward active navigation of complex, evolving regulatory frameworks. Artificial intelligence offers significant potential for enhancing reporting accuracy, supply chain monitoring, and climate risk modeling, though it simultaneously introduces substantial environmental risks due to high energy and water demands. While the European Union has moved toward regulatory simplification, corporate climate transition planning remains critical, driven by investor pressure and global standards like the ISSB and CSRD rather than solely by mandatory directives. Similarly, supply chain and environmental regulations continue to present significant compliance challenges for multinationals. Despite efforts to reduce red tape, companies must prepare for heightened scrutiny from NGOs and persistent litigation risks, necessitating transparent, consistent, and data-driven approaches to meet global ESG expectations.