NAVIGATING LEGISLATION UPDATE
THE STORM
ABOVE: By aligning licensing practices with environmental priorities, businesses can lead the way in building a more sustainable – and ultimately more profitable – future.
RIGHT: In the UK and EU, licensing agreements must now include clauses on sustainable sourcing, lifecycle analysis, and recyclability under EPR.
As the planet grapples with the escalating consequences of climate change, global regulatory frameworks are rapidly evolving. POC Advisor, Andrea Green, provides the rundown on the latest updates from both sides of the pond. HOW GLOBAL CLIMATE LAWS ARE RESHAPING BUSINESS Businesses around the world, especially those operating in international markets or managing intellectual property portfolios, must now contend with a dramatically shifting legal landscape. Nowhere is this more apparent than in the diverging approaches between the United States and the European Union/United Kingdom. Understanding these differences is essential for companies seeking to maintain compliance, safeguard brand integrity, and future-proof their licensing strategies. CLIMATE LAWS GAIN MOMENTUM Global climate legislation is no longer a fringe concern, becoming central to how companies are expected to operate. With the 2015 Paris Agreement setting a broad global framework for reducing greenhouse gas emissions, individual jurisdictions are now rolling out their own climate laws with increasing rigor and specificity.
These laws impact businesses on multiple fronts, from production processes to supply chains, marketing claims, and consumer expectations. A TALE OF TWO LEGAL APPROACHES: US VS EU/UK APPROACHES The global licensing community must pay close attention to the distinct pathways taken by the US and the EU/UK. These differences have immediate implications for licensing agreements, product standards, ESG (Environmental, Social, Governance) reporting, and brand reputation management. UNITED STATES: INCENTIVEDRIVEN AND FRAGMENTED Policy framework: The US approach to climate regulation remains largely incentive-based. The landmark Inflation Reduction Act (IRA) of 2022 introduced over $370 billion in climate and energy-related investments, offering tax credits and subsidies to companies that transition toward greener operations. State-level initiatives: Due to the federal system, climate regulation is often state-led. California, for example, has instituted stringent emissions standards and product labelling laws that will become de facto national standards. Voluntary reporting (for now): ESG and climate-related disclosures are largely voluntary, but when California’s SB 219 passed, it laid out the need for large companies to track emissions and climate risks starting in 2026. The following year Scope 3 Emissions (licensees!) will be required. Business implication: For licensors and licensees, this
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