Global Trustee and Fiduciary Services Bite-Sized Issue 3 | 2026

9 QUICK LINKS AI DIGITAL ASSETS EMIR FINTECH FSB IOSCO MIFID II/MIFIR SUSTAINABLE FINANCE/ESG ASIA PACIFIC EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 3 | 2026 Sustainability Mixed Goals Label • Poor practice examples from the FCA include where: – The fund intends to invest in assets that focus on sustainability (Focus) or have the potential to improve over time (Improvers), but all assets have Improvers’ attributes, and it is not clear which assets already meet a standard of sustainability and are therefore considered Focus. Link to FCAWebpage here Council Signs Off Simplification of Sustainability Reporting and Due Diligence Requirements to Boost EU Competitiveness On 24 February 2026, the Council of the EU (the Council) gave its final green light to a simplification of the sustainability reporting and due diligence requirements for companies. The Council says that the legislation simplifies the directives on corporate sustainability reporting (CSRD) and corporate sustainability due diligence (CS3D) by reducing the reporting burden and limiting the trickle-down effect of obligations on smaller companies. Corporate sustainability reporting directive Here, the Council says that the CSRD’s scope is narrowed by raising its thresholds to companies with more than 1,000 employees and above EUR450 million net annual turnover. Regarding third- country undertakings, the updated requirements will apply only to companies with a net turnover above EUR450 million for the parent undertaking within the EU and above EUR200 million generated turnover for the subsidiary or branch. The Council explains that the amending directive also provides for a transition exemption for companies that had to start reporting from financial year 2024 (the so-called ‘wave one’ companies) falling out of scope for 2025 and 2026. It also includes an exemption for certain EU and non-EU financial holding companies from consolidated reporting. Corporate sustainability due diligence directive The Council says that the CS3D’s scope is narrowed by raising its thresholds to companies with more than 5,000 employees and above EUR1.5 billion net turnover, considering that such large companies have the biggest influence on their value chain and are best equipped to make a positive impact and absorb the costs and burdens of due diligence processes. On the identification and assessment of adverse impacts, the Council says that companies can focus on the areas of their chains of activities where actual and potential adverse impacts are most likely to occur. To provide companies with flexibility, when a company has identified adverse impacts equally likely or equally severe in several areas, the Council adds that this company is given the ability to prioritise assessing adverse impacts which involve direct business partners. The Council says that to provide for a significant burden relief, the obligation for companies to adopt a transition plan for climate change mitigation under the CS3D has been removed. The updated rules also remove the EU harmonised liability regime and the requirement for member states to ensure that the liability rules are of overriding mandatory application in cases where the applicable law is not the national law of the member state. When it comes to penalties, the Council states that businesseswill be liable at a national level for failure to apply the rules correctly. The newdirective provides for amaximumcap of 3%of the company’s net worldwide turnover, with the European Commission issuing the necessary guidelines in this regard. Finally, the Council explains that the amending directive postpones the CS3D’s transposition deadline by member states into national law by another year, to 26 July 2028. Companies will have to comply with the newmeasures by July 2029. Next steps The text of the legislative act will be published in the EU’s official journal in the coming days and will come into force on the twentieth day after this publication. Member states will have one year after the entry into force of the directive to transpose its provisions into national legislation except for article 4 on the level of harmonisation, with which they must comply by 26 July 2028 at the latest. Link to Council Press Release here