In this issue, we bring you the most significant updates on ESG developments across the Baltic region – from amendments to consumer protection laws in Lithuania to Latvia’s national AI Centre and Estonia’s debate on sustainability reporting.
At the EU level, key updates include a proposal to delay corporate sustainability reporting, a new voluntary ESG framework for SMEs, and the EU’s plan to decarbonise the steel and metals industry.
As always, our team is ready to support your ESG journey with insights, guidance and solutions tailored to your goals.
Legislative news and ESG initiatives in Estonia, Latvia and Lithuania
Lithuania
In March amendments were registered to the Law on the Prohibition of Unfair Commercial Practices for Consumers, as were amendments to the Civil Code of the Republic of Lithuania; these amendments will transpose the requirements of Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 amending Directives 2005/29/EC and 2011/83/EU (the Empowering Consumers Directive).
The amendments aim to provide consumers with clear information on the durability and repairability of goods, to promote more sustainable consumption, and to combat unfair commercial practices, in particular misleading claims of being green (greenwashing), unreliable sustainability labels, and early deterioration of goods.
Latvia
On 6 March 2025, the Latvian Parliament passed a law to establish a national Artificial Intelligence (AI) Centre aimed at boosting the country’s competitiveness through trustworthy and secure AI innovation. The centre will create a legal and collaborative ecosystem involving the public and private sectors, academia, and civil society, promoting responsible AI development and addressing related risks. The new law also grants the centre the right to create special regulatory environments for AI system testing, and specified that the institution had to be founded by 31 March 2025.
Estonia
In March, the conservative political party Isamaa made a proposal, related the Omnibus package, to amend the Estonian Accounting Act to postpone by two years the obligation to submit a sustainability report for entities that are required to submit one for the first time in 2026 or 2027. The new deadlines for filing the sustainability report would be in 2028 and 2029, reflecting the Omnibus proposals. Another proposal made by Isamaa has also been submitted: to abolish the obligation to submit sustainability reports at the European Union and thus reduce the bureaucratic burden on entities. Isamaa proposed to the Government of the Republic of Estonia to initiate negotiations within the European Union to repeal the obligation to submit sustainability reports. These proposals haven’t yet reached first reading in the parliament.
CS3D transposition into national law has been paused due to the Omnibus proposals.
Estonia also wishes to join the Optional Protocol to the Convention on the Elimination of All Forms of Discrimination against Women. The relevant legislative proposal has been submitted. By joining, Estonia undertakes to ensure that individuals and associations have the opportunity to submit complaints to the UN Committee on the Elimination of Discrimination against Women (CEDAW) about violations of the rights enshrined in the Convention. It also gives the Committee the right to initiate, on its own initiative, an investigation into persistent violations of women’s rights and to make recommendations to States Parties to ensure the rights set out in the Convention and to improve the situation.
EU-level news
“Stop-the-clock” proposal and the 1 April hearing
The European Council has proposed the European Commission’s “stop-the-clock” directive, a key step in delaying the implementation of both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
This proposal is part of the broader Omnibus I package and is designed to give companies, particularly SMEs, more time to prepare for new reporting obligations. Having voted to use the urgent procedure, the European Parliament will decide today (April 3) on whether to delay application of the new sustainability reporting and due diligence requirements.
Proponents argue the delay provides legal clarity and reduces administrative burdens during a time of significant regulatory change.
Proposed amendments to the voluntary sustainability reporting standard (VSME)
At the heart of the Omnibus revisions is the introduction of a voluntary sustainability reporting framework for small and medium-sized enterprises (SMEs), based on the VSME standard developed by EFRAG.
The VSME standard offers a two-module structure – Basic and Comprehensive – allowing non-listed micro-, small-, and medium-sized businesses to report proportionally based on their capacities. Notably, the Basic Module includes disclosures on energy use, GHG emissions (Scopes 1 and 2), workforce conditions, and governance practices. For those wishing to report in more depth, the Comprehensive Module adds guidance on Scope 3 emissions, climate risks, and transition plans. Under the Commission’s new plan, these voluntary standards will also cap the amount of sustainability data that large companies or banks can request from SMEs in their supply chains, reinforcing the EU’s push to reduce regulatory burdens while still encouraging transparency and sustainability.
Commission’s action plan to secure a competitive and decarbonised steel and metals industry in Europe
The European Commission has launched an Action Plan to strengthen the competitiveness and decarbonisation of the EU’s steel and metals industry, which is vital to sectors like automotives, clean tech, and defence. The plan addresses urgent challenges such as high energy costs, global overcapacity, and the need for low-carbon technologies. Key measures include securing affordable energy, tightening trade protections, promoting circularity and recycling, and mobilising billions in funding to support industrial decarbonisation. It also emphasises protecting high-quality jobs and ensuring a fair transition for workers across the sector.
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Contact the authors:
Co-head of Sorainen ESG team, Counsel, Lithuania
vitalija.impoleviciene@sorainen.com
Counsel, Latvia
Senior Associate, Estonia
