In this issue, we cover the Baltic States’ energy independence, as well as EU legal news in regard to sustainability and innovation.
As always, our team is here to support you with expertise, advice and tailored solutions to meet your ESG ambitions. Let’s continue working together towards a more sustainable and equitable future.
Legislative news and ESG initiatives in Estonia, Latvia and Lithuania
Lithuania
Last year, the parliament adopted a regulation requiring all large companies to include statistical information on gender representation in their corporate governance reports. This regulation mandates companies to detail measures taken or planned to ensure that in management and supervisory bodies the under-represented gender occupies at least 33% (but no more than 49%) of managerial positions, as well as among members of boards of directors and supervisory boards. Companies must also explain any failure to achieve this ratio.
However, in February 2025, a draft amendment of this legislation was introduced (in Lithuanian). The proposed changes aim to narrow the scope of this provision to apply only large companies admitted to trading on a regulated market, rather than all large companies.
Latvia: Government approves regulations for the creation and adaptation of the bomb shelters
On 11 February, the Latvian Cabinet of Ministers supported a bill proposed by the Ministry of the Interior to amend the Civil Protection and Disaster Management Law (in Latvian). The bill defines the concept of bomb shelters, mandates their construction for certain building groups, and sets regulations for their use during military conflicts, wars, or disasters. The bill categorises shelters into three types depending on their protective capabilities, and outlines guidelines for their construction and maintenance.
Estonia
The draft act amending the General Part of the Environmental Code and other Acts (hereinafter referred to as the draft Act) proposes to amend a number of laws to make administrative processes related to environmental permits more efficient and transparent, and less time-consuming. If approved, the threshold capacities are increased and, in some cases, the obligation to register is waived. Overall, the obligation to obtain a permit and the permit application process will become more proportionate to the potential environmental impact.
The Building Code has also undergone a process of revision, and a new draft law has been introduced by the ministry for the public consultation. Twelve key principles for designing a sustainable and well-integrated living environment have been introduced into the Code. High-quality space integrate artistic, technological and economic spaces into the natural environment. Sorainen has prepared an analysis of the topic that has been considered by the Ministry of Climate (see here, in Estonian only).
On 20 February 2024 the government decided to postpone the CfD auction for offshore wind parks. The new plan seems to be to obtain a new state aid permit and to launch the auction for offshore projects at the beginning of next year.
EU-level news
EU launches competitiveness compass to boost innovation and sustainability
The European Commission has introduced the Competitiveness Compass, a strategic framework aimed at enhancing Europe’s innovation, decarbonisation and security. The Compass, published at the end of January this year, promises among other things to make efforts to simplify the disclosure of sustainability information, sustainability due diligence, and the taxonomy for sustainable activities. These are the so-called sustainability omnibus proposals, which are expected to be published at the end of February 2026. Simplifying legal regulation for sustainability would be a welcome step, and hopefully make it easier for business to comply. We will update you in future newsletters on the Commission’s specific proposals and the final results of the process.
Baltic States achieve energy independence by connecting to European grid
On 19 February 2025, Lithuania, Latvia and Estonia became fully independent from Russia and Belarus’s electricity systems by connecting to the European continental network via Poland. This achievement, 18 years in the making, involved over 40 infrastructure projects and EUR 1.2 billion in European investment. Additionally, President von der Leyen highlighted Europe’s overall reduction in energy dependence on Russia and emphasised the need to secure critical infrastructure and increase investment in defence. She also reiterated the EU’s support for Ukraine, commending the Baltic countries’ solidarity in aiding Ukraine’s energy security.
Agreement reached in new EU regulations to minimise textile and food waste
On 19 February 2025, the Parliament and Council reached a provisional agreement on new EU measures to reduce food and textile waste. The agreement sets binding targets to cut food waste by 10% in processing and manufacturing, and by 30% per capita in retail, restaurants, food services, and households by 2030. Additionally, producers will be required to cover the costs of collecting, sorting and recycling waste textiles through Extended Producer Responsibility schemes. These measures aim to address the 60 million tonnes of food waste and 12.6 million tonnes of textile waste generated annually in the EU.
The new rules would apply to a wide range of textile products and include provisions to tackle fast-fashion practices. The agreement is expected to be formally adopted by the Council and endorsed by the European Parliament in the coming months.
New EU packaging regulation promotes sustainability and competitiveness
The new Packaging and Packaging Waste Regulation entered into force on 11 February 2025 and introduced measures to address environmental challenges from excessive packaging.
In addition, the Regulation aims to cut greenhouse gas emissions, water use, and environmental costs in the packaging industry, and to promote recycling, as well as reuse and refill alternatives to single-use packaging, in order to enhance resource efficiency and foster a circular economy. Packaging will be more sustainable and enable consumers to reuse or to sort their packaging waste more effectively, with solutions customised for the specific needs of particular member states and businesses.
EUR 422 million EU funding to boost zero-emission mobility
The EU is allocating nearly EUR 422 million to 39 projects that will deploy alternative fuels supply infrastructure along the trans-European transport network (TEN-T). These projects will support approximately 2,500 electric recharging points for light-duty vehicles, 2,400 for heavy-duty vehicles, 35 hydrogen refueling stations, and the electrification of ground handling services in eight airports and elsewhere. This funding aims to contribute to decarbonisation and support the EU’s goals for sustainable transport. The European Commission will finalise the award decisions in the coming months, with the next application deadline set for 11 June 2025.
2025 European Commission work programme adopted
The Commission has adopted its 2025 work programme, aiming to boost competitiveness, enhance security, and bolster economic resilience in the EU. The programme focuses on flagship initiatives to foster innovation, growth and opportunities for citizens and businesses. Key areas include sustainable prosperity and competitiveness through the Competitiveness Compass and Clean Industrial Deal, defence and security, social fairness, quality of life, and global partnerships. Additionally, the programme highlights simplification measures to reduce administrative burdens and improve the implementation of EU rules.
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Contact the authors:
Co-head of Sorainen ESG team, Counsel, Lithuania
vitalija.impoleviciene@sorainen.com
Senior Associate, Latvia
Associate, Estonia
