Sustainability changes in 2027: UK business guide

What is changing in sustainability in 2027, and why should you pay attention?

You have customers to look after, costs to manage and a team that is already busy. Keeping track of sustainability regulations probably does not sit at the top of your list.

Until a customer asks for information you do not have. Or a new requirement changes the cost of a product you buy.

Several sustainability changes in 2027 will affect how UK businesses buy, sell, report and manage waste. Others will reach you through customers and supply chains, even when your own business is outside the legal scope.

Here are the developments worth understanding, and what they mean in practice.

1. Manufacturing and construction: the UK carbon border tax begins

The UK Carbon Border Adjustment Mechanism, or CBAM, applies from 1 January 2027 to specified imports from five sectors: aluminium, cement, fertiliser, hydrogen, and iron and steel.

It puts a carbon price on covered imports. Businesses importing £50,000 or more of specified goods over a 12-month period are directly affected, subject to the detailed registration rules.

For manufacturers, construction suppliers, agricultural businesses and importers, the first question is whether your actual goods are covered. Sector names alone are not enough: commodity codes matter.

Even if you buy through a UK distributor, costs could reach you through supplier pricing.

What to do: identify relevant imports, check the HMRC registration guidance, and ask suppliers what emissions information they can provide. Bring purchasing and finance into the conversation before agreeing long-term prices.

2. Healthcare and NHS suppliers: carbon reporting expands

From 1 April 2027, new NHS carbon reduction plan requirements apply to in-scope procurements in England.

These are tiered. The expanded 2027 requirements apply to contracts worth at least £5 million annually, including VAT, and new frameworks where relevant and proportionate. They cover global Scope 1, Scope 2 and all relevant Scope 3 emissions.

Lower-value procurements above the relevant procurement thresholds use the 2024 carbon reduction plan tier. Do not assume every supplier must produce the same report.

This matters to pharmaceutical companies, medical device manufacturers, care providers, facilities businesses, technology suppliers and other organisations selling to the NHS.

What to do: establish which tier applies to your intended contracts. Check your reporting boundary, emissions data and approval process. A plan prepared for an earlier tender may need more than a new date on its cover.

3. Retail, food and consumer goods: packaging choices affect fees

Packaging extended producer responsibility is already operating. However, its financial incentives become more significant as the scheme develops.

Under PackUK’s published fee modulation policy, household packaging disposal fees reflect recyclability from 2026/27. The published modulation factor for red-rated packaging increases from 1.2 in 2026/27 to 1.6 in 2027/28.

That is not a blanket 60% increase in every packaging bill. The effect depends on the packaging, applicable base fees and your obligations.

For food producers, retailers, online sellers and consumer brands, packaging design increasingly belongs in the financial conversation.

What to do: check whether you are liable for fees, review recyclability assessments and compare alternatives. A cheaper pack can become more expensive once disposal fees, damage and product waste are considered together.

4. Drinks and hospitality: deposit returns require preparation

A deposit return scheme is scheduled for October 2027 across England, Scotland and Northern Ireland. It covers specified single-use PET plastic, steel and aluminium drinks containers between 150ml and three litres.

Producers, retailers, wholesalers and hospitality operators need to understand their different responsibilities. Wales has a separate policy position, so avoid assuming identical arrangements across the UK.

What to do: review affected products, deposits, stock systems and any return-point obligations or exemptions. Use the producer and retailer guidance for England and Northern Ireland as a starting point. Brief the people buying drinks and managing sales, not just whoever holds the sustainability brief.

5. Smaller workplaces: the recycling exemption ends

Under Simpler Recycling in England, micro-firms with fewer than ten full-time equivalent employees have until 31 March 2027 to comply with the workplace recycling requirements.

The employee count applies across the business, not separately to each site. Larger workplaces should already have arrangements in place.

This matters to small offices, shops, cafés, charities and other workplaces. The published timetable also brings plastic film collections into the reforms from March 2027.

What to do: agree collection arrangements with your waste contractor or landlord, provide suitable bins and explain the system to staff. These are England-specific rules; check the relevant requirements elsewhere.

6. Food, furniture and EU trade: traceability becomes more pressing

The EU Deforestation Regulation covers specified products linked to cattle, cocoa, coffee, oil palm, rubber, soya and wood.

Its current application dates are 30 December 2026 for large and medium operators and 30 June 2027 for micro and small operators. Small operators already covered by the EU Timber Regulation have the earlier deadline.

UK businesses supplying covered products into EU markets may need to provide traceability information to their customers. Buying or selling these materials does not automatically give every business the same legal duties.

What to do: check product coverage, your trading role and the evidence needed from suppliers. Furniture, food, timber and rubber supply chains should be reviewing this now.

7. Finance and larger customers: reporting is changing, not universally expanding

The UK Sustainability Reporting Standards are available for voluntary use. The FCA has proposed related rules for certain listed companies from January 2027, with a final policy statement expected in autumn 2026. These are not a blanket reporting obligation for SMEs.

Meanwhile, the EU has narrowed CSRD reporting requirements. Old compliance summaries may overstate who is covered.

What to do: ask major customers what information they actually need. Professional services, software and logistics businesses should distinguish contractual requests from direct legal obligations.

8. Public sector suppliers: social value changes in January 2027

The new Social Value Model, PPN 026, applies to relevant central government procurements starting from 1 January 2027, with minimum social value weightings of:

10% for contracts from £1 million to below £5 million.
20% for contracts of £5 million or more.

These thresholds use total contract value, including VAT. Different scoring arrangements apply to certain evaluation methods.

The model focuses on good jobs, fair working conditions and skills. It does not automatically apply to every council or NHS tender.

What to do: review your employment, training and work placement opportunities. Build realistic commitments you can deliver and measure. Further implementation guidance is expected in autumn 2026.