Practice News:
- On May 6, Leah Malone participated in a discussion event in partnership with Extraordinary Women on Boards (EWOB). For more information please see here.
Americas
SEC Seeks to Rescind Climate Disclosure Rules
On May 4, the U.S. Securities and Exchange Commission (SEC) submitted a proposal to officially rescind its climate-related disclosure rules that would require companies to disclose material climate-related risks and greenhouse gas (GHG) emissions in periodic reports. The proposed rescission follows the SEC’s March 2025 vote to stop defending the rules in litigation, and the Eighth Circuit’s September 2025 order requiring the SEC to formally rescind, repeal, modify or resume its defense of them.
DOJ Sues to Block Minnesota’s Climate Change Lawsuit
On May 4, the U.S. Department of Justice (DOJ) sued Minnesota seeking to block its lawsuit against two large oil companies and a petroleum trade association for allegedly deceiving its residents about their contributions to climate change. Minnesota’s original lawsuit, filed in June 2020, asserts claims for consumer fraud, deceptive trade practices and false statements in advertising. The DOJ argues that the state’s claims are preempted because federal law exclusively governs regulation of GHG emissions, and that the lawsuit violates the Commerce Clause. This lawsuit follows President Trump’s April 2025 Executive Order 14260, Protecting American Energy from State Overreach, which directed executive agencies to identify all state laws and causes of actions burdening domestic energy resources.
California’s Long-Awaited EPR Rules Take Effect
On May 1, California’s Senate Bill 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, took effect after approval by the Office of Administrative Law. The law sets minimum content requirements for single-use packaging and single-use plastic food service ware and establishes an extended producer responsibility (EPR) program, ultimately shifting the plastic pollution burden from consumers to producers. By 2032, producers must ensure that (1) 100% of all single-use packaging and service ware is recyclable or compostable, (2) 65% of single-use plastic packaging and single-use food service ware is recycled and (3) sales of single-use plastic packaging and single-use food service ware are reduced by 25%. CalRecycle has provided additional guidance and resources.
State Attorneys General Target Rating Agencies’ ESG Practices
On April 27, a coalition of 23 state attorneys general, including those from Florida, Texas and Nebraska, sent letters to the leaders of three rating agencies regarding various downgrades of fossil-fuel companies based on ESG-related predictions and goals. The letters raise antitrust concerns regarding the rating agencies’ participation in ESG-related organizations and alliances, and cite the recent settlement in the Texas-led antitrust lawsuit as precedent for potential actions against rating agencies engaged in similar ESG-related conduct. The letters request that the agencies explain the downgrades of fossil-fuel companies, withdraw from or disclose ESG commitments, remove ESG factors from its sector-specific methodologies for oil and gas companies and eliminate or disclose ESG consulting conflicts.
Wind Developers Agree to Terminate Offshore Wind Leases
On April 27, the U.S. Department of the Interior (DOI) announced an agreement with two offshore wind developers whereby the developers agree to voluntarily terminate their offshore wind leases and instead invest in U.S.-based oil and gas and liquified natural gas production. Both developers have also agreed not to pursue any new offshore wind projects in the U.S. Following the announcement, the California Energy Commission launched an investigation and issued an investigative subpoena to one of the developers for potential legal violations. The agreement follows a similar deal reached between the DOI and a large international energy company, which is currently under investigation by Members of the U.S. House of Representatives.
Proxy Advisors Challenge Recently-Enacted Proxy Advisor Restriction Laws
In April, two large proxy advisors sued Indiana and Kansas challenging recently enacted proxy advisor restriction laws (Indiana HB 1273 and Kansas SB 375). The laws require proxy advisors recommending votes against management policies to disclose whether their recommendations are based on written financial analysis assessing the proposals’ short- and long-term costs and benefits. The lawsuit alleges that the laws violate the First Amendment by compelling speech and are unconstitutionally vague under the Fourteenth Amendment’s Due Process Clause. The lawsuits seek preliminary injunctions before the laws each take effect on July 1.
EU/U.K.
European Commission Publishes Draft Revisions to ESRS
On May 6, the European Commission published a draft delegated act containing the revised European Sustainability Reporting Standards (ESRS), which would replace the current ESRS, as well as publishing a draft delegated act on voluntary sustainability reporting standards for smaller undertakings. The revised ESRS set out the detailed sustainability reporting required under CSRD, which has been subject to the European Commission’s Omnibus simplification process, and incorporates technical advice from EFRAG, reducing mandatory datapoints by over 60% and total datapoints by over 70%. The revised standards also retain but simplify the double materiality assessment. The draft voluntary standard is designed to support sustainability reporting by companies not subject to mandatory CSRD requirements and introduces a “value chain cap”, meaning that a company in scope of CSRD cannot require business partners in its value chain with fewer than 1000 employees to provide information beyond what is set out in the voluntary standard. Both delegated acts are open to a four-week public feedback period, which closes on June 3, 2026.
European Commission Publishes Updated Deforestation Report
On May 4, the European Commission published a report on the EU Deforestation Regulation (EUDR), accompanied by an updated guidance document, revised Frequently Asked Questions and a draft delegated act amending the EUDR's product scope. The EUDR, which entered into force in June 2023, requires in-scope operators and traders to ensure that key products placed on the EU market do not originate from recently deforested land or have contributed to forest degradation. The updated guidance and FAQs aim to clarify due diligence obligations, reduce administrative burdens and address stakeholder concerns. The draft delegated act incorporates targeted amendments to the EUDR product scope, including the proposed exclusion of leather and retreaded tires, and is open for public feedback until June 1, 2026. The European Commission has confirmed that it will not reopen the EUDR text, and that in-scope operators must continue preparing for application by December 30, 2026.
European Parliament Proposes Amendments to SFDR 2.0
On May 4, the European Parliament published a draft report proposing amendments to the European Commission's proposed revisions to the European Sustainable Finance Disclosure Regulation (SFDR 2.0). The report proposes to make principal adverse impact (PAI) reporting a qualifying condition for products under Articles 7, 8 and 9, effectively retaining product-level PAI reporting under the current regime. It is unclear whether such product-level requirements would entail quantitative disclosure. Other notable proposals include: (i) raising the Taxonomy-alignment threshold for the categories under Articles 7 and 9 from 15% to 20%; (ii) requiring products that do not qualify for a category to include a prominent disclaimer in their materials; and (iii) including an application date 24 months after the Regulation enters into force, which would suggest application from 2029. The ECON Committee is expected to vote on the draft on July 15, ahead of plenary and trilogue negotiations.
Flemish Region Introduces Energy Efficiency Decree
On April 27, the Belgium government published the Flemish Decree of April 3, 2026 authorizing the Flemish Government to require companies, non-commercial organizations and public bodies to assess energy efficiency solutions when making major investments. The decree requires an assessment but does not require implementing measures, unless required by other legislation. Exemptions and predefined compliant measures may be introduced, and a monitoring authority will be designated while preserving the powers of the Flemish energy regulator.
Information provided by contributing law firm: Loyens & Loeff
Portuguese Commission Publishes 2026 Sustainability Guide
In April 2026, the Portuguese Securities Market Commission, Comissão do Mercado de Valores Mobiliários (CMVM), published an updated Sustainability Guide meant to help in-scope entities comply with the sustainable finance rules that have come into force in recent years. The Guide compiles and sorts applicable sustainability rules by sub-sector of capital market activity (asset management, financial intermediation/investment services, issuers and auditors) and provides a timetable for the implementation of the main rules on sustainable finance.
Information provided by contributing law firm: Cuatrecasas
APAC
Thailand SEC Launches Hearing on Transition and Amber Bonds
On May 11, the Thai Securities and Exchange Commission (the “Thai SEC”) closed a public hearing on proposed regulations relating to transition finance, including the introduction of Transition Bonds and Thailand Amber Bonds, as part of Thailand’s broader efforts to facilitate corporate fundraising in support of the transition to a green economy. The Thai SEC would establish regulatory criteria for the issuance and offering of two categories of transition-focused debt instruments: (a) Thailand Amber Bonds debt instruments, whose proceeds are allocated to investments in “amber” activities as classified under the Thailand Taxonomy; and (b) Transition Bonds debt instruments, whose proceeds are used to finance projects aligned with the issuer’s transition strategy or transition plan, based on internationally recognized Transition Bond standards. The proposed amendments would also revise the existing ESG Bond regulatory framework to strengthen disclosure requirements and improve transparency standards for sustainable finance products.
Information provided by contributing law firm: Chandler Mori Hamada
South Korea Provides Practical Guidance Regarding EU CBAM
On April 21, the South Korean government held its 11th inter-ministerial briefing on the EU Carbon Border Adjustment Mechanism (CBAM), targeting Korean exporters of CBAM-covered products. Jointly organized by relevant ministries and agencies, the briefing addressed key regulatory changes following the start of the definitive period, practical compliance issues, recent verification trends, and company-specific concerns through on-site consultation booths. Separately, on March 30, the South Korean government published its EU CBAM Practical Manual for the Definitive Period, which provides case-based guidance limited to two technical areas: the calculation of specific embedded emissions and the calculation of CBAM certificate quantities to be surrendered. The manual reflects the commencement of the definitive period in January 2026, under which exporters face not only emissions reporting obligations but also carbon cost implications through the CBAM certificate mechanism.
Information provided by contributing law firm: Yoon & Yang LLC
Notable Litigation
Global Automobile Manufacturer Faces Greenwashing Complaint
On April 28, a climate-based nonprofit group filed a complaint with Korea’s Ministry of Climate, Energy and Environment and the Korea Fair Trade Commission against a large automobile manufacturer, alleging greenwashing in the company’s 2025 sustainability report. The complainants allege that the company reported approximately 1.23 million tons of iron use for 2024, equivalent to 0.332 tons per vehicle, while excluding steel contained in supplier-produced parts and semi-finished products. According to the complaint, this figure materially understates steel use when compared with industry benchmarks and may affect the completeness of related emissions disclosures. Based on steelmakers’ disclosures and market-share analysis, the complainants further estimate that the company’s actual steel purchases could be approximately 4.87 million tons, about 3.4x the amount disclosed in their sustainability reports. The complaint seeks more transparent supply-chain-level raw material and emissions disclosures.
Information provided by contributing law firm: Yoon & Yang LLC
Two Climate Lawsuits Launched in the Netherlands
On April 21, the Clean Clothes Campaign filed a class action in the Netherlands against a global clothing brand for allegedly misleading consumers with sustainability and human rights claims. Brought by four individual consumers, the case concerns statements about responsible production and compliance with international labor standards, despite alleged unremedied violations of freedom of association at a Turkish supplier.
Separately, on April 21, a Dutch climate activist group initiated a new climate litigation action against a large oil and gas company following a landmark reversal of the appeal in the 2021 judgment. The complaint asks the court to impose concrete targets for the company to reduce its CO2 emissions, targeting specific corporate conduct within the oil and gas company’s control, including the requirement that emission reductions be real and absolute (excluding carbon credits and purely emissive divestments), and seeks injunctions against investments in new oil and gas fields following a defined cut‑off date to prevent future emissions lock‑in.
Information provided by contributing law firm: Loyens & Loeff
Standards and Associations
Climate Action 100+ Releases 2026 Net Zero Benchmark Framework Removing Climate Disclosures Indicator
On April 30, Climate Action 100+, the world's largest investor-led engagement initiative on climate change, released an updated Net Zero Company Benchmark framework for 2026. The revised framework streamlines how the initiative assesses the world's highest-emitting companies on their progress toward net-zero emissions, unifying disclosure and alignment indicators into a single, more accessible assessment structure. Key areas of evaluation include GHG reduction targets across short-, medium-, and long-term horizons, decarbonization strategy, capital allocation, climate governance, and policy engagement. Notably, Climate Action 100+ has discontinued its dedicated benchmark indicator on climate-related disclosures, citing the increasing pressure from regulatory frameworks, particularly in the EU, that now mandate such reporting. The update reflects feedback from investors and companies, with a formal feedback mechanism now incorporated into the framework’s evolution. Full company assessments under the 2026 Benchmark are expected in October 2026.
Coalition Launches Initiative to Develop First Standardized Guidance for Corporate Value Chain Water Risk
On April 30, a coalition of four leading sustainability organizations announced the launch of Corporate Guidance for Assessing Water Scopes 1-3 in Value Chains. Modeled after the GHG Protocol's Scope 1, 2, and 3 frameworks for carbon emissions, the initiative aims to create the first standardized methodology for assessing and managing corporate water risk across entire value chains. Currently, companies face growing pressure from investors and regulators to report their water impacts, yet no shared standard exists, making meaningful comparison or accountability difficult. In addition, nearly one-third of global GDP (roughly $70 trillion) will be exposed to high water stress. The coalition plans to develop the guidance over 18 months, with final publication targeted for Q4 2027, and intends to complement existing disclosure systems.
ISSB Board Votes Against Establishing Mandatory Nature-Related Disclosures Standard
On April 22, the International Sustainability Standards Board (ISSB) agreed to propose nature-related disclosure requirements in a non-mandatory guidance document, referred to as an IFRS Practice Statement rather than a binding standalone standard. Currently, the binding ISSB standards already require companies to provide material information about all sustainability-related risks and opportunities that could reasonably be expected to affect a company's prospects. The Practice Statement would complement the existing IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) without altering those standards, providing companies with specific guidance on how to report material nature-related risks and opportunities. The decision draws heavily on the Taskforce on Nature-related Financial Disclosures (TNFD) framework, and the ISSB aims to publish an exposure draft for public comment in October 2026. Notably, applying the Practice Statement would carry the full effect of an ISSB Standard for companies that adopt it, while preserving a pathway to further strengthen these guidelines into a formal standard in the future.
Contributing Law Firm Information
Loyens & Loeff | Cuatrecasas | Yoon & Yang LLC | Chandler, Mori Hamada