Practice News:
- An Alert discussing developments relating to California climate disclosure laws (discussed below) was published on December 10.
Americas
Ninth Circuit Court Hears Oral Arguments in Lawsuit Challenging California Climate Disclosure Laws
On January 9, the U.S. Court of Appeals for the Ninth Circuit heard oral argument following the granting of a temporary preliminary injunction on Senate Bill 261 (the Climate-related Financial Risk Act) in November. Arguments focused chiefly on whether the compelled disclosures required under the statutes can be considered commercial speech, and a decision, which will also cover Senate Bill 253 (the Climate Corporate Data Accountability Act) is expected this month. Under an Enforcement Advisory issued by the California Air Resources Board (CARB), enforcement of SB 261 is currently suspended pending the appeal, but the public docket for reports remains open. CARB will hold a public hearing on February 26 to consider approving for adoption the proposed regulations enacting SB 261 and SB 253, originally published on December 9.
Trump Administration Withdraws U.S. From International Climate Organizations
On January 7, President Trump issued an Executive Order directing the United States’ withdrawal from 66 international organizations, conventions and treaties on the basis that they are “contrary to the interests of the United States.” The Order follows a review of international memberships by the U.S. State Department mandated by Executive Order 14199 in February 2025 and directs Executive Departments and Agencies to take immediate steps to cease membership, participation and/or funding for various international organizations, including the UN Framework Convention on Climate Change and the Intergovernmental Panel on Climate Change. A press statement from Secretary of State Marco Rubio notes that review of additional organizations remains ongoing.
Trump Administration Pauses Leases for All Offshore Wind Projects
On December 22, the U.S. Department of the Interior announced that it was pausing leases for all large-scale offshore wind projects under construction in the U.S. due to national security risks, with immediate effect. The announcement identified five major offshore wind farms under development, including a project previously delayed by a stop-work order from the Trump administration, which was later lifted, in April 2025. Several of the projects are in advanced stages of construction and were expected to be operational by 2026-2027. Following the stop-work order, two affected developers sued the Trump administration in the U.S. District Court for the District of Columbia, challenging the order and seeking a preliminary injunction to allow construction to continue while the litigation proceeds.
New Jersey Adopts New Disparate Impact Discrimination Regulations
On December 17, New Jersey Attorney General Matthew J. Platkin and the state’s Division on Civil Rights announced the adoption of regulations codifying disparate impact discrimination liability under the New Jersey Law Against Discrimination, focused on disparate impact discrimination in employment (including addressing the use of AI and automated decision-making), housing, places of public accommodation, financial lending and contracting. Attorney General Platkin described the regulations, which took effect on December 15, as “the most comprehensive disparate impact rules in the country.” The rules follow an Executive Order issued by President Trump calling for an end to disparate impact liability in U.S. laws, and a final rule issued by the U.S. Department of Justice removing liability for disparate impact discrimination under regulations implementing Title VI of the Civil Rights Act of 1964.
U.S. Lawmakers Open Investigation Into AI Data Center Electricity Costs
On December 16, three Democratic U.S. senators opened an investigation into the role of AI data centers in rising consumer utility bills. In letters sent to seven technology companies and data center operators, the senators observed that the energy demand necessary to power AI data centers has required utility companies to upgrade their infrastructure, which costs are then recouped through consumer utility bill increases while data centers receive discounted rates. The lawmakers requested information from the companies on current and future data center and electricity needs, actions to prevent electricity costs from being passed on to consumer electricity bills and other information by January 12.
Florida Attorney General Sues Starbucks Over Race-Based Employment Practices
On December 10, Florida Attorney General James Uthmeier filed a civil lawsuit against Starbucks alleging that the company has engaged in race-based employment practices, including racial hiring goals and quotas including targets, in violation of the Florida Civil Rights Act. The complaint seeks declaratory and injunctive relief, civil penalties and damages. The lawsuit follows a similar complaint filed by the Missouri Attorney General Andrew Bailey in February 2025, alleging that Starbucks discriminated on the basis of race through its DEI programs. The Missouri lawsuit, which was filed in the U.S. District Court for the Eastern District of Missouri, is still in the beginning stages.
Canada Advances Its Sustainable Taxonomy
In December 2025, Canada’s federal government announced two years of seed funding to develop Canada’s sustainable investment guidelines, reconfirming the government’s support for the arm’s-length development of made-in-Canada sustainable investment guidelines, also known as a taxonomy. The Canadian sustainable investment guidelines are intended to become an important tool for investors, lenders and other stakeholders, by credibly identifying “green” and “transition” investments. The Canadian taxonomy will be voluntary and will be aligned with and broadly compatible with other major, science-based taxonomies and frameworks around the world.
Information provided by contributing law firm: Gowling WLG
Canada Supply Chains Act Filing Period Opens
On January 1, Public Safety Canada opened the filing portal for 2026 reports under the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Supply Chains Act”), Canada’s supply chain transparency reporting law. Although no regulations have been promulgated, Public Safety Canada has published amended Guidance for private sector reporting entities. The Guidance is intended to provide additional clarity on several disclosure requirements including the meaning of “very minor dealings,” attestation requirements, acceptable signature formats and the exclusion of personal information from submissions. In addition, an optional template is available for reporting entities required to file supply chain transparency reports in multiple jurisdictions (e.g. the United Kingdom, Australia and Canada). Reports under the Supply Chains Act must be filed on or before May 31, 2026.
Information provided by contributing law firm: Gowling WLG
EU/U.K.
Political Agreement Reached on the Final Text Amending CSRD and CSDDD
On December 16, the Parliament approved the final agreed text for a Directive amending the European Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), which was first proposed by the European Commission as part of its “Omnibus I” simplification package in February 2025. Significantly, the amendments to CSRD reduce the scope by increasing the application thresholds to undertakings that have (1) more than 1,000 employees and (2) at least €450 million net turnover. The amendments also introduce a cap on the level of information that a reporting entity can request from entities in its value chain that have 1,000 employees or fewer. Similarly, with respect to CSDDD, the application thresholds have been increased to undertakings that have (1) more than 5,000 employees and (2) at least €1.5 billion net worldwide turnover. The Directive will enter into force 20 days after its publication in the Official Journal.
Omnibus I Amendments to Taxonomy Entered Into Force With New FAQs Published by the European Commission
On January 8, the Omnibus Delegated Act was published in the EU Official Journal amending the Disclosures Delegated Act under the Taxonomy Regulation. The Omnibus Delegated Act was published alongside a draft Commission Q&A. The Omnibus Delegated Act introduces measures to simplify elements of the Disclosures Delegated Act by introducing a materiality threshold below which reporting undertakings are not required to assess their Taxonomy-eligibility and Taxonomy-alignment; reducing the reporting templates; and increasing the flexibility for non-financial undertakings to report the operational expenditure key performance indicators (OpEx KPIs), among others. Following its publication, the Disclosures Delegated Act will apply from January 1, 2026.
ESMA’s Review of the Impact of Guidelines on ESG or Sustainability Related Terms in Fund Names
On December 17, the European Securities and Markets Authority (ESMA) published a report containing the results of research assessing the impact of its fund naming guidelines on ESG- and sustainability-related terms, which were published in August 2024. The report is based on a review of almost 1,000 shareholder notifications from the 25 largest EU managers with assets under management of €7.5 trillion. The report observes two thirds of the subject funds changing their names and more than half updating their investment policy, mostly to introduce fossil-fuel related exclusions.
Germany Votes in Favor of Stricter Sanctions Against Greenwashing
On December 19, Germany passed an amendment to the Act Against Unfair Competition (UWG) implementing EU Directives (EU) 2024/825 and 2023/2673, tightening controls on environmental claims and manipulative online practices, and specifying the general prohibition of misleading practices. The amendment states that generic environmental claims (e.g., “environmentally friendly”) are permissible only if substantiated by recognized, outstanding environmental performance, and the use of sustainability labels is permitted only where the label is based on a certification scheme or established by a public authority. The amendment also prohibits undue influence in the marketing of financial services, aiming to increase transparency, legal certainty and fair competition for sustainable products. Individual provisions are expected to come into force as early as June 19, 2026. The amendment has been approved by the German parliament, but it must still be formally published in the Federal Law Gazette (Bundesgesetzblatt).
Information provided by contributing law firm: Gleiss Lutz
Switzerland’s Cantonal Court of Zug Admits Climate Lawsuit Against Swiss Cement Company
On December 17, Switzerland’s Cantonal Court of Zug rendered a decision admitting a civil lawsuit filed against a Swiss cement company, which alleges that the company’s CO₂ emissions contributed to climate change and rising sea levels threatening the plaintiffs’ homes. The plaintiffs—four residents of the Indonesian island of Pari—are supported by several NGOs and contend that their personal rights are violated by the consequences of climate change, and that they are entitled to damages and compensation, and request that stricter emission targets be imposed on the company. In Switzerland, this paves the way for an examination on the merits for the first case of ordinary civil proceedings against a corporation on account of its alleged role in contributing to climate change and the according consequences.
Information provided by contributing law firm: Pestalozzi
APAC
South Korea Enforces Amended Emissions Trading Systems Decree
On January 2, the amended Enforcement Decree of the Act on the Allocation and Trading of Greenhouse Gas (“GHG”) Emission Permits took effect. The Decree applies to designated entities, which are allocation target entities designated and publicly notified by the competent minister (typically operators) above emissions thresholds (e.g., 125,000 tCO₂-eq company-wide or 25,000 tCO₂-eq per facility, three-year average) and eligible voluntary participants. Covered entities must monitor and report annual GHG emissions under approved MRV procedures and surrender allowances equal to verified emissions by end-August after the compliance year. The Decree also governs trading, banking and borrowing, and imposes a surcharge for surrender shortfalls of up to three times the compliance-year average market price of emission allowances, capped at KRW 100,000 per tonne of CO₂.
Information provided by contributing law firm: Yoon & Yang LLC
China’s Ministries Issue Notice on CSRD Standard
On December 25, the Chinese Ministry of Finance and eight other ministries and commissions jointly issued its new standard entitled “Corporate Sustainability Disclosure Standard (CSRD) No. 1 – Climate (Trial),” encouraging enterprises to utilize their internal audit departments, legal departments or other oversight functions to supervise climate-related risks and opportunities, and to engage independent third-party institutions to provide assurance on climate-related information. As the first thematic standard within China’s corporate sustainability information disclosure system, its official implementation marks a transition in the relevant institutional development from framework construction to practical execution. The Standard is aligned with the framework of climate-related disclosure under International Financial Reporting Standards (IFRS) S2 while adding specific Chinese characteristics. The Standard is implemented on a voluntary basis before the application scope and timeline is determined.
Information provided by contributing law firm: Global Law Office
Contributing Law Firm Information