Practice News:
- Leah Malone hosted a webinar, “Preparing for Climate Reporting Under SB 261,” on October 28.
- Emily Holland presented on “Emerging Views on Responsible Defense Investment” to the ABA International Law Section Business & Human Rights Subcommittee on November 12.
Upcoming Events:
- Matt Feehily to participate in a panel discussion on “Sustainability: Practical insights and the impact beyond regulation,” at the BVCA Technical Policy Conference, on November 18.
- Emily Holland to moderate a Human Rights and Business Roundtable session for the Fund for Peace, “Operating in Conflict Economies: Insights from Current Crises,” on December 11.
Upcoming Reporting Deadlines:
- California EPR Reporting: Entities in scope must submit their initial reports to the Circular Action Alliance by November 15, 2025.
- California SB 261:Entities in scope must post their reports on reporting entities’ websites by January 1, 2026. The California Air Resources Board (CARB) will hold a virtual public workshop on November 18 to provide further information and guidance. You can register here.
Large Oil and Gas Company Sues CARB Over Climate Disclosure Laws
On October 24, a large oil and gas company sued CARB and its executives in federal court over California’s Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Act (SB 261), alleging that the laws infringe on the company’s First Amendment rights and are preempted under federal law. The arguments are similar to those made in a lawsuit previously filed against CARB by the U.S. Chamber of Commerce and industry plaintiffs, currently on appeal to the Ninth Circuit, and additionally challenge elements of the Greenhouse Gas Protocol. On October 29, the company filed a motion for a preliminary injunction, and on November 4 sought a motion for a temporary restraining order against SB 261, aiming to prohibit CARB from implementing and enforcing the law. The court is scheduled to hear arguments on both motions on December 4, 2025.
Federal Banking Regulators to Cease Providing Climate-Related Financial Risk Guidance
On October 16, the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency (OCC) announced the withdrawal of climate-related financial risk principles for large banks and lenders. The principles were intended to help financial institutions with over $100 billion in total consolidated assets manage their climate-related financial risk. In support of rescinding the climate-related principles, the agencies stated that they “do not believe principles for the management of climate-related financial risk are necessary and are concerned that such principles could distract from the management of other potential risks identified.” The recission follows the OCC’s decision to withdraw its guidance on managing climate-related risks in March 2025.
Coalition of States Sue the EPA for Ending Solar for All Program
On October 16, a coalition of 22 states and the District of Columbia sued the U.S. Environmental Protection Agency (EPA) and the EPA Administrator for ending the $7 billion Solar for All Program. The program, created under the Clean Air Act’s Greenhouse Gas Reduction Fund, sought to help low-income and disadvantaged communities adopt clean energy by issuing sizable grants, which several states have relied upon to meet benchmarks for clean energy production, create jobs and generate household energy cost savings. After the U.S. Congress passed the One Big Beautiful Bill, the EPA ended the program. Separately, on October 15, a coalition of Solar for All grant recipients sued the EPA to recover damages alleging breach of contract.
U.S. State and Federal Officials Express Concern Over EU CSRD and CSDDD
On October 6, a group of 16 U.S. State Attorneys General (AG) sent letters to the CEOs of several large U.S. technology companies urging them not to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). The AGs expressed concern over the regulations and pressed the companies to comply with “America’s laws and the Trump Administration’s policies and disavow the DEI and ESG directives imposed by the CSRD and CSDDD.” The companies have 30 days to respond. On October 29, five U.S. trade organizations sent a letter to several U.S. agency leads expressing concern about the far-reaching consequences of CSRD and CSDDD. In the letter, the organizations urge U.S. officials to intervene and prevent the regulations from applying to U.S. companies, as “the window for engagement and legislative action in the EU is fast closing.”
U.S. Reaches Reciprocal Trade Agreements with Cambodia and Malaysia
On October 26, the United States announced trade agreements with Cambodia and Malaysia, requiring both countries to adopt and effectively implement forced labor import bans and strengthen labor rights protections. Under the agreements, both countries “may acknowledge” determinations by the U.S. government on entities deemed to be associated with forced labor, and subject to Withhold Release Orders and Findings under Section 307 of the Tariff Act of 1930 as a result, and prohibit the importation of goods from such entities.
Canada’s Competition Act to Include Greenwashing Enforcement Provision
On November 4, Canada’s Federal Government tabled “Budget 25” in the House of Commons and indicated that it would again be amending the Competition Act to address representations of environmental benefits. The government also proposed amendments to the Act to create new anti-greenwashing enforcement provisions addressing the making of representations of environmental benefits. Under the proposal, the requirement for businesses to substantiate their representations of environmental benefits in accordance with internationally recognized methodology standards will be removed, along with the ability for third parties to bring cases directly to the Competition Tribunal for greenwashing complaints.
Information provided by contributing law firm: Gowling WLG
Brazil Establishes Sustainable Taxonomy Framework
On November 3, Presidential Decree No. 12.705 established the Brazilian Sustainable Taxonomy (TSB), a framework that classifies, based on scientific evidence, economic activities, assets and projects that contribute to and are aligned with ESG objectives. The TSB is an instrument of the Ecological Transformation Plan of Brazil’s federal executive branch and aligned with the (i) Paris Agreement; (ii) Convention on Biological Diversity and its Kunming-Montreal Global Biodiversity Framework; (iii) United Nations Convention to Combat Desertification; (iv) Basel, Rotterdam and Stockholm Conventions, and other international and national legislation on human rights, labor rights and gender and racial equality. The taxonomy applies to a range of industries, including the agriculture, livestock, forestry, fishing, aquaculture, extractive and manufacturing industries and energy, water and waste management, construction, transportation and social services, and will be reviewed every five years.
Information provided by contributing law firm: Mattos Filho
EU/U.K.
European Parliament Agrees on Negotiating Mandate on Omnibus I
On November 13, 2025, in a plenary session, Members of the European Parliament voted to endorse a negotiating mandate in relation to the European Commission’s “Omnibus I” proposal to amend CSRD and CSDDD. On October 22, 2025, MEPs had rejected a prior proposal put forward by the EPP’s lead rapporteur on the file. The approved position was secured with a majority from a coalition that included the right and far-right groups, in contrast to the so-called “pro-European” position presented at the last plenary session, that had sought support from progressive, green and left-wing groups. The mandate proposes to further reduce the scope of CSRD and CSDDD compared to the Commission’s proposals and would remove from CSDDD the obligation to produce climate transition plans. The Legal Affairs (JURI) committee will now enter into trilogue negotiations with EU governments in the European Council with the aim of finalizing the legislation by the end of 2025.
Leaked Draft of SFDR 2.0 Made Public
On November 6, a draft proposal for a regulation amending the Sustainable Finance Disclosure Regulation (SFDR), commonly referred to as “SFDR 2.0,” was leaked ahead of an anticipated publication by the European Commission on November 19. The leaked draft proposes to remove the current Article 8 and Article 9 regimes, in favor of three new categories based on financial products’ sustainability related claims, being those that either: have a transition focus; integrate sustainability factors; or have a sustainability-related objective. To qualify for a category, financial products will be required to maintain a minimum 70% of their assets in specific types of investments relevant to the category and implement specific investment exclusions. Financial products falling outside the categories will be precluded from making sustainability-related claims in their fund documents and marketing communications. However, significantly, the draft proposal includes an “opt-out” for financial products that are “made available exclusively to professional investors.” The proposal may yet change ahead of its anticipated publication on November 19 and will be subject to further amendment through the EU legislative process.
European Supervisory Authorities Published Updated SFDR Q&As
On November 4, the European Supervisory Authorities (ESAs) published an updated set of Q&As for the SFDR as currently in effect. The update adds a new Q&A setting out more granular information on what financial market participants are expected to disclose in their entity-level principal adverse impact (PAI) statements under Article 4 of the SFDR. The ESAs have expressed their expectation that, for each identified PAI indicator, financial market participants should include information on how they assess whether action needs to be taken to reduce a particular indicator, for example, whether the financial market participants have set any thresholds that trigger actions to mitigate a particular PAI indicator.
U.K. Issues Draft ESG Ratings Order
On October 28, a draft version of the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025 was presented to the U.K. Parliament. The draft statutory instrument would create a new specified activity of “providing an ESG rating” where that rating is likely to influence a decision to make an investment, under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Providing an ESG rating in the U.K. by way of business will therefore amount to a regulated activity which will require authorization by the U.K. Financial Conduct Authority (FCA). The draft instrument must be debated and approved by Parliament and, if adopted as drafted, will come into force on June 29, 2028. In tandem, the FCA published a statement welcoming the draft legislation and stated that the FCA has been developing proposed rules for ESG ratings in parallel, which it intends to consult on before the end of the year.
European Commission Proposes “Simplifications” to EUDR Regime and Updates to Proposed Implementation Delays; Council Fails to Agree on Common Position
On October 21, the European Commission published a proposal to amend the EU Deforestation Regulation (EUDR) to provide a further 12-month delay for micro and small enterprises, to December 30, 2026. Contrary to earlier suggestions, the Commission did not amend the timing for large and medium-sized companies (December 30, 2025) but did propose a six-month grace period. The Commission also proposed targeted simplifications to reduce obligations for downstream value chain partners in the EU, and for micro and small primary operators from low-risk countries that sell their goods directly on the European market. As a next step, the European Parliament and the Council will be required to review and formally adopt the amendments prior to application of the EUDR on December 30, 2025. At the time of writing, the Council Presidency has yet to secure a majority for the Commission’s proposals in the Council, amidst speculation that certain member states want to delay the legislation further and secure further simplifications to the rules. Parliament is expected to vote on the Commission’s proposals during the 24-27 November plenary, following a vote to fast-track the procedure.
CBAM Simplification Enters into Force
On October 17, Regulation (EU) 2025/2083 was published in the Official Journal and entered into force on October 20, 2025, introducing simplifications to the EU Carbon Border Adjustment Mechanism (CBAM). The amendments form part of the European Commission’s first “Omnibus” simplification package, proposed in February this year with the aim of streamlining regulatory burdens to boost the EU’s global market competitiveness. The key change is to introduce a de minimis exemption based on a “single mass-based threshold,” meaning that companies importing less than 50 tons of CBAM goods into the EU shall be exempt. The Commission estimates that approximately 182,000 importers will be exempt under the amended regime (approximately 90% of importers) while still keeping 99% of importer emissions in scope. For importers that are still in scope, simplifications have been introduced regarding the authorization process for declarants, the calculation of emissions and compliance with financial liability.
German Federal States and Municipal Infrastructure Financing Act Enacted
On October 24, Germany’s Act on the Financing of Infrastructure Investments by the Federal States and Municipalities (LuKIFG), which aims to remedy deficits in public infrastructure and promote economic growth in Germany, entered into force. The LuKIFG governs the distribution of the “Infrastructure and Climate Neutrality” special fund amounting to EUR 100 billion to the federal states and municipalities in Germany. The federal states and municipalities can use the funds allocated to them for, among other things, transport infrastructure, digitalization, educational infrastructure, research and development, as well as heating and energy infrastructure. Investment measures are eligible for funding until December 31, 2042, provided they are approved by the competent federal state authorities by December 31, 2036.
Information provided by contributing law firm: Gleiss Lutz
French Court Issues Ruling on Greenwashing Claim
On October 23, the Paris Judicial Court ruled that TotalEnergies and its subsidiary, TotalEnergies Electricity and Gas France, engaged in misleading commercial practices. The case, brought by environmental organizations, focused on the company’s advertising claims about achieving carbon neutrality by 2050 and being a major player in the energy transition. The court found that these claims, made on commercial websites and promotional materials, were likely to mislead consumers about the company’s actual environmental commitments, especially given its continued investment in fossil fuels. The court ordered the removal of such content from TotalEnergies’ website, and the judgment's publication on its homepage, in addition to paying moral damages. However, the court dismissed claims related to fossil gas and biofuels. Importantly, in line with Article 4 of the Treaty on the Functioning of the European Union’s principle of loyal cooperation, the court interpreted national law consistently with Directive 2024/825 (not yet transposed), reinforcing the fight against misleading environmental claims.
Information provided by contributing law firm: Gide Loyrette Nouel
France Establishes New Penalties for Battery Regulation
On October 29, France enacted Decree no. 2025-992, which establishes penalties for non-compliance with European Regulation (EU) 2023/1542 on batteries and waste. The decree amends the French Consumer Code to introduce fines of up to €1,500 for individuals and €7,500 for corporations per infringement for failure to meet obligations on battery durability, safety, consumer information, labeling and marking, recycled material content and restrictions on hazardous substances. The new rules apply to all relevant operators, including manufacturers, importers and distributors, reinforcing the EU Regulation’s requirements at the national level and supporting broader objectives of improved sustainability and safety for batteries in the EU market.
Information provided by contributing law firm: Gide Loyrette Nouel
Czech Constitutional Court Dismisses Climate Litigation Lawsuit
On November 5, the Czech Constitutional Court dismissed a complaint brought by several environmental associations against the Environment, Industry and Trade, Agriculture and Transport ministries, which had requested that the ministries adopt specific mitigation measures to reduce GHG emissions. The court held that the ministries did not interfere with the complainants’ fundamental rights, and that there is currently no legislation in the Czech Republic imposing a duty on ministries to adopt specific mitigation measures. The court explained that such an obligation does not arise from the constitutional order or from EU law, and only the legislature has the authority to enact such laws. The court did not question the existence of climate change or the urgency of responding to it; however, it emphasized that significant emission reductions require obligations to be imposed on individuals through laws, which do not yet exist.
Information provided by contributing law firm: Havel & Partners
South Korea Aligns ESG Ratings and Market Disclosures to Capture Industrial-Accident Financial Risks
On October 1, South Korea’s Financial Services Commission (FSC) approved revisions to the Korea Exchange (KRX) disclosure rules, and separately proposed strengthening annual and semi-annual business reporting requirements to include accident occurrences and response measures, which proposal is open for public comment until November 10. The disclosure rules require listed companies to timely disclose information regarding the occurrence of industrial accidents to strengthen the management of financial risks associated with such accidents. The FSC also updated ESG rating guidance, requiring ESG rating institutions to incorporate major controversial issues—specifically industrial accidents—into ESG evaluations, which was previously voluntary.
Information provided by contributing law firm: Yoon & Yang LLC
Australian Power Company Issues First Green Bond
On October 22, Victoria Power Networks issued Australia’s first green bond aligned with both the Australian Sustainable Finance Taxonomy and the EU Taxonomy Regulation. The AU$750 million deal links Australian and EU standards. Proceeds are intended to fund grid modernization, renewable integration and resilience upgrades to advance Australia’s decarbonization goals and meet strict eligibility, disclosure and impact reporting requirements.
Information provided by contributing law firm: King & Wood Mallesons
Standards and Associations
Taskforce on Nature-Related Financial Disclosures to Pause Technical Guidance
On November 7, the Taskforce on Nature-Related Financial Disclosures (TNFD) announced that it would pause further technical guidance work on nature-related risks and opportunities, a process that will now be undertaken by the International Sustainability Standards Board (ISSB). The ISSB will rely on the TNFD’s framework to set nature-related standards and disclosure requirements and seeks to have an exposure draft of disclosure requirements by the Convention on Biological Diversity (CBD) COP17 meeting in October 2026. The TNFD stated that it will complete all technical work in progress by Q3 2026 and focus future efforts on supporting the ISSB’s program.
NZAM to Relaunch in 2026 and Drop 2050 Goals for Signatories
On October 29, the Net Zero Asset Managers (NZAM) initiative announced that it will relaunch in January 2026 with scaled-back requirements for signatories. NZAM previously suspended its activities in January 2025 following the departure of several large asset managers. The initiative has been a target of the anti-ESG movement and referenced in a lawsuit filed by Texas against three asset managers, leading to NZAM undertaking a comprehensive review of its activities this year. Notably, the relaunched NZAM initiative is dropping its requirement for signatories to target net-zero by 2050 “to reflect diverse jurisdictional realities and accommodate signatories from a wider range of markets.”
TISFD Releases Conceptual Foundations Discussion Paper
On October 20, the Taskforce on Inequality and Social-related Financial Disclosures (TISFD), a multistakeholder initiative launched in September 2024 to advance the integration of inequality and social issues in financial and sustainability disclosures, released a discussion paper to inform the structure and content of a future disclosure framework and recommendations. TISFD will hold Q&A sessions on the discussion paper on December 4 and 5 and expects to release a beta version of the framework in Spring 2026.
ISSB Opens Consultation on SASB Standards
The ISSB is consulting on proposed amendments to the Sustainability Accounting Standards Board (SASB) Standards and the Industry-based Guidance on Implementing IFRS S2 (Industry Guidance). The ISSB published exposure drafts proposing amendments on July 3, 2025, which seek to present a comprehensive review of nine industries that were prioritized for review, align metrics in an additional 41 industries as to specified topics, and propose updates to the Industry Guidance to maintain alignment with climate-related content in the SASB Standards. The exposure draft will be open for comment until November 30, 2025, and stakeholders can respond to the request by submitting a survey (preferred) or a comment letter.
Principles for Responsible Defense Investment Concept Note Released
On November 6, in response to a rise in conflicts, shifting geopolitics, and increased defense spending and investment pressure, as well as the acceleration of paradigm-shifting defense-related technology, a group of investors and human rights organizations released a Concept Note on the development of Principles for Responsible Defense Investment (PRDI). The document describes the context for and use case for future principles, which will focus chiefly on downstream social risk associated with the use and potential misuse of products, services and technologies, as well as options for implementation and opportunities for stakeholders to help develop the principles, which will be released in 2026.
Contributing Law Firm Information