2026 is shaping up to be a transition year for environmental compliance and risk management. Companies are grappling with regulatory fluidity, budget constraints, and mounting pressure to move from reactive to proactive strategies. Dan Smith, Practice Director for Environmental, shares the five biggest concerns and opportunities businesses should monitor this year.
1. PFAS regulations: The big unknown
PFAS remains the most significant and most uncertain regulatory issue for 2026. Initial reporting obligations under TSCA have been rescinded, leaving companies unsure of what’s next.
"PFAS regulations haven’t even been finalized. We’ve seen requirements rescinded and reporting obligations shift. By the end of 2026, I expect we’ll finally understand what those regulations are and then compliance will kick in fast."
Why it matters:
- PFAS rules will likely be clarified late in the year, leaving little time for companies to prepare.
- Non-compliance could lead to significant liabilities and reputational risk.
Action: Start now. Inventory PFAS use, assess exposure, and plan for rapid implementation once rules are finalized.
2. State-level regulatory patchwork
Federal leadership on environmental regulation remains muted, creating a vacuum that states are eager to fill.
"States are stepping in where the federal government has paused. Expect California, New York, Illinois, and Washington to go above and beyond prior federal standards."
Why it matters:
- Multi-state operations will face a growing patchwork of requirements.
- Compliance strategies must adapt to diverging standards.
Action: Build flexibility into your compliance programs. Decide whether to standardize the most stringent requirements or tailor strategies by state.
3. Budget pressures and staffing shortages
Economic uncertainty has led to cost-cutting and hiring freezes, leaving EHS teams stretched thin.
"Uncertainty leads to people being conservative. Companies have been cutting budgets and delaying sustainability initiatives. Now, those deferred actions are piling up."
Why it matters:
- Reduced resources increase the risk of compliance gaps.
- High turnover and overworked teams make recordkeeping and training vulnerable.
Action: Conduct a baseline risk assessment to identify critical vulnerabilities. This inexpensive step can set the framework for the next two years and prevent costly surprises.
4. Data management and predictive analytics
Companies collect mountains of environmental data but few use it effectively.
"Smart data management and predictive analytics can save millions. Investing $50K now could prevent $1M in liabilities later."
Why it matters:
- Data-driven insights enable proactive risk management.
- Automation and predictive tools reduce manual workload and improve accuracy.
Action: Shift from compliance-driven data collection to business-risk-driven analytics. Explore tools like predictive risk modeling to maximize ROI.
5. Waiting to leading
The last two years forced companies into a reactive posture. 2026 is the year to change that.
"Stop waiting for regulations to dictate your strategy. Focus on business drivers. Proactive risk management isn’t just compliance, it’s good business sense."
Why it matters:
- Waiting for regulatory clarity is costly and risky.
- Proactive measures can prevent multimillion-dollar liabilities and strengthen resilience.
Action: Shift your model toward risk-based decision-making. Invest in initiatives that align with long-term business goals, not just short-term compliance.
2026 will be a turning point of compliance. The old model of waiting for regulations and scrambling to meet the requirements is no longer sustainable.
The takeaway? Stop waiting for certainty. Start building strategies that turn uncertainty into opportunity.
For more environmental insights from Dan Smith read Risk mitigation adds long-term value and Risk mitigation: Re-evaluating cash reserves.
