Insights

On September 24, 2025, the California Air Resources Board (“CARB”) issued a preliminary list of reporting/covered entities under California’s climate disclosure laws SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Act) (the “Climate Disclosure Laws”) (both as modified by SB 219).

Responding to the D.C. Circuit’s deadline to inform the court how it wishes to proceed in litigation challenging the agency’s listing of two types of per- and polyfluoroalkyl substances (PFAS) as hazardous substances under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Environmental Protection Agency (EPA) stood behind its rule. In a September 17, 2025 filing, EPA told the court that the Trump administration had completed its review and would ultimately keep the Biden-era CERCLA final rule in place. The agency also requested that the court remove—i.e. pause—the abeyance placed on the proceedings, so that the lawsuit could move forward and be adjudicated.

On August 8, 2025, the Attorneys General of 23 Republican-led U.S. states (the “AGs”) sent a letter to Science Based Targets Initiative (“SBTi”), a U.K. non-profit climate organization, expressing concern with the SBTi’s climate initiatives.[1]SBTi had previously received a subpoena from Florida Attorney General James Uthmeier in connection with his office’s investigation into what he described as a “climate cartel,” which he alleges includes SBTi and CDP (formerly the Carbon Disclosure Project).[2]

On September 11, 2025, the Environmental Protection Agency (EPA) asked the D.C. Circuit to vacate regulations for four types of polyfluoroalkyls (known collectively as “PFAS”) in drinking water. The motion for partial vacatur marks a significant reversal in the agency’s policy, as the EPA had previously vigorously defended legal challenges to the first-of-their-kind standards in federal court for the past two years. See American Water Works Association, et al. v. EPA, case no. 24-1188 and consolidated cases (D.C. Cir. filed June 7, 2024). Just this month, the case was given the green light to proceed, after being held in abeyance (at the request of both parties) so that the Trump administration could determine how it wished to proceed. The change signals a willingness on the part of the administration to act on previously issued non-legally binding announcements of forthcoming changes to Biden-era rules and may also serve as a harbinger for how the new administration will tackle PFAS under other statutes, such as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

In 2023, California passed two landmark laws—SB 253, the Climate Corporate Data Accountability Act; and SB 261, the Climate-Related Financial Risk Act—that will require large public and privately-held entities doing business in California to comply with sweeping disclosure requirements regarding their direct and indirect greenhouse gas emissions and their climate-related financial risks. California subsequently passed SB 219, which updated certain deadlines and requirements of the laws (collectively, the “Climate Disclosure Laws”).

Following the February announcement of the Omnibus package, the European Commission, Council, and Parliament have made several decisions indicating ways in which EU ESG laws are likely to be streamlined. This alert provides a high-level summary of the most significant proposed changes to existing and draft ESG legislation.

On May 22, 2025, the U.S. Department of Justice and the Federal Trade Commission (the “U.S. Antitrust Agencies”) filed a Statement of Interest supporting thirteen states’ claims that asset managers violated antitrust and consumer protection law through their environmental, social, and governance (“ESG”) activities. The Statement, which opposes the asset managers’ motion to dismiss the antitrust claims, indicates the federal antitrust agencies support antitrust theories favored by anti-ESG activists, which may lead to federal investigations and lawsuits based on such theories.

The new administration took over four months ago and has implemented significant changes throughout the federal government, including policies affecting prior federal environmental justice (EJ) initiatives. These changes will likely result in reduced regulatory burdens and faster permitting but will apply only at the federal level, leaving the existing EJ laws at the state level fully enforceable.  

On March 20, 2025, Florida Attorney General James Uthmeier announced an investigation into whether two leading proxy advisors’ advice involving the consideration of Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) constitutes deceptive or unfair trade practices under Florida law or a violation of Florida antitrust law.

On February 18, President Trump issued an Executive Order titled “Ensuring Accountability for All Agencies” that directs independent agencies (as well as Cabinet Departments and their sub-agencies) to route all “proposed and final significant regulatory” and budgetary actions through the White House and the Office of Management and Budget. If implemented to its full extent, this action will significantly strengthen the authority of the White House by weakening the political autonomy of these independent agencies. As an assertion of the President’s inherent powers under Article II of the U.S. Constitution, it also stands to weaken congressional influence over these independent agencies, both through the appropriations and confirmation processes.

On February 4, 2025, U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin announced the agency’s Powering the Great American Comeback Initiative, signaling five pillars that will guide EPA’s work in the short term, which are summarized below:

Mandatory climate disclosures for US federal contractors are officially off the table—at least, for the foreseeable future.  On January 10, 2025, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration announced that they are withdrawing a proposed rule, “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk,” which would have required thousands of federal contractors to inventory and publicly disclose their Scope 1 and Scope 2 greenhouse gas (GHG) emissions and would also have required  “major” contractors to also establish and validate GHG emission-reduction targets tailored to the goals of the Paris Agreement.  The proposed rule, discussed in further detail here, was introduced in November 2022 and resulted in thousands of public comments from the government contractor community and beyond. 

On November 27, 2024, a group of eleven state attorneys general (the “AGs”) sued three of the world’s largest asset managers (the “Asset Managers”), accusing them of anticompetitive stock acquisitions, deceptive asset management practices, and an antitrust conspiracy to restrict coal output. The states seek declaratory and injunctive relief including divestitures, as well as fines under state laws, although the allegations could provide a basis for follow-on private treble damages claims under the antitrust laws.

On November 8, 2024 the SEC announced a settled enforcement action against Invesco Advisers, Inc. for making misleading statements about its integration of environmental, social, and governance (ESG) factors into the firm’s investment decisions. Invesco agreed to pay a $17.5 million civil penalty to settle the matter. This enforcement action makes it clear that, even though the SEC dissolved its ESG Task Force, the Commission continues to monitor firms’ statements and representations for misleading statements about ESG.

There is currently a deluge of new EU law being finalized and adopted – particularly on environmental and sustainability issues. At times it may seem overwhelming – with certain new EU laws being overlooked.  However, when serious environmental problems come to light within companies – the first major concern is normally criminal liability. That includes potential criminal liability of the company itself, but also of the CEO, Board Members and other persons leading it. With that in mind – top of a company’s ‘to-do’ list should be ensuring compliance with the new EU Environmental Crime Directive.

Cattle, cocoa, coffee, oil palm, soya, wood, rubber?  Do you sell any of these commodities? Do you sell any products derived, containing or using any of these commodities? Are there any companies in your supply chain which sell or use these commodities, or derivative products?  Do you (or others in your supply chain) sell products in the EU/EEA, or export products from the EU/EEA?  If so, you – and your supply chain – must likely comply with the Deforestation Regulation.[1] And getting ready is no easy feat – even despite the recent actions to postpone some of the application deadlines of concern. 

The EU Institutions are currently adding the finishing touches to the new Packaging & Packaging Waste Regulation (“PPWR”) which is expected to be adopted in Q4 2024 or Q1 2025. While many companies are fully preoccupied with preparing for other EU legislation (e.g. the Deforestation Regulation) – companies will ignore the PPWR at their peril. The PPWR contains a host of ambitious legal targets and requirements – which industry will find it difficult to achieve in practice. And the deadlines to comply – are perhaps even more challenging. Companies will need to start preparing for the EU PPWR now, to avoid serious problems – including supply-chain disruption, penalties and litigation – in the future.

On September 10, 2024, the U.S. Securities and Exchange Commission (the “SEC”) announced a settlement with Keurig Dr Pepper Inc (“Keurig”).  The SEC alleged that Keurig made incomplete and inaccurate statements in the Company’s annual reports for fiscal years 2019 and 2020 touting the recyclability of its K-Cup products. Keurig agreed to pay a $1.5 million civil penalty. 

Earlier this week, another case of apparent Modern Slavery and Forced Labour came to light in the UK. [1]  According to media reports, the former UK Prime Minister, Baroness Teresa May of Maidenhead, now Chair of the Global Commission on Modern Slavery and Human Trafficking[2] – described the case as “shocking” and showed “large companies not properly looking into their supply chains”. The UK Government is now contemplating further steps to strengthen UK Modern Slavery and Forced Labour laws. This recent UK case, follows a number of other cases in Europe – particularly the EU – including those involving high profile Italian fashion houses.[3] In all these cases, the ethical and social responsibilities – including the legal obligations – incumbent on large companies to root-out modern slavery and forced labour concerns in their supply chains, have been focused on. This comes in the wake of, a number of concerns in the same area with, for example, a United Nations Working Group recently noting a general lack of understanding in the banking and investment community that ESG data and information requires undertakings to provide information and data on the “S” – including, therefore, on human rights issues.[4]

The amount of litigation regarding environmental and climate change issues is, perhaps unsurprisingly, growing worldwide.[1] A significant portion of that litigation relates to so-called ‘greenwashing’, ‘climate-washing’ or ‘social-washing’ disputes. In other words, legal cases where people or organisations (often NGOs and consumer groups) accuse companies, banks, financial institutions or others, of making untrue statements. They argue these companies or financial institutions are pretending their products, services or operations are more environmentally-friendly, sustainable, or ethically ‘good’ for society – than is really the case. Perhaps more interestingly, of all the litigation in the environmental and climate change space – complainants bringing greenwashing and social washing cases have, according to some of these reports, statistically the most chance of winning. So, in a nutshell, not only is greenwashing and social washing litigation on the rise, companies and financial institutions are most likely to lose cases in this area.