Americas
Texas Resumes Enforcement of Anti-ESG Law Following Court Ruling
On May 29, the U.S. Court of Appeals for the Fifth Circuit granted a stay of a preliminary injunction in a lawsuit challenging Texas’ anti-ESG law, Senate Bill 13 (“SB 13”), allowing the law to remain in effect pending appeal. SB 13, enacted in 2021, prohibits covered state entities from investing in companies that “boycott” fossil fuels, and requires vendors seeking state contracts over $100,000 to certify that they will not so “boycott” during the life of the contract. In February 2026, a U.S. District Court had declared SB 13 unconstitutional under the First and Fourteenth Amendments and entered an injunction staying its implementation and enforcement. Following the Court of Appeals’ ruling, the Texas Attorney General announced that the state will immediately resume enforcing SB 13.
EEOC Seeks to Eliminate EEO-1 Reporting
On May 14, the U.S. Equal Employment Opportunity Commission (“EEOC”) submitted a proposal seeking to eliminate annual EEO-1 reports, which currently require employers to collect and disclose workforce demographic data, including data related to race, ethnicity and sex. The proposed rule also seeks to rescind EEO-2, EEO-3, EEO-4 and EEO-5 reporting, along with other reporting requirements under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act. The proposed rule is currently under review by the Office of Information and Regulatory Affairs, after which the text of the proposal will be made available.
States Challenge New York’s Greenhouse Gas Reporting Program
On May 14, Iowa and Missouri, together with the American Free Enterprise Chamber of Commerce, sued New York Attorney General Letitia James challenging New York’s Mandatory Greenhouse Gas Reporting Program, which was adopted in December 2025 and requires certain large emitters to report annual greenhouse gas (“GHG”) data and prepare a GHG monitoring plan beginning in 2027. Plaintiffs allege that the program violates the U.S. Constitution’s prohibition on extraterritorial state regulation because the program seeks to govern fuel suppliers and distributors located in other states despite “minimum contacts” with New York. The complaint raises federal preemption claims under the Clean Air Act, and emphasizes the burdensome compliance costs and potentially significant financial penalties on covered entities. Plaintiffs seek to declare the program unconstitutional and have asked the court to permanently enjoin New York from enforcing the program.
States Sue Trump Administration Over Offshore Wind Deal
On June 2, New York Attorney General Letitia James, joined by six other states (Connecticut, Maine, Massachusetts, New Jersey, Rhode Island and Vermont), sued the Trump administration over its deal to pay French energy company TotalEnergies approximately $795 million to cancel a major offshore wind lease in the New York Bight. This follows a March 2026 agreement whereby TotalEnergies agreed to terminate planned wind projects off New York and North Carolina and to reinvest the lease fees paid into U.S. oil and gas investments. The states argue the lease cancellation violated the Outer Continental Shelf Lands Act and the Judgment Fund Act, as the U.S. Department of the Interior failed to follow required procedures. The canceled New York project would have generated three gigawatts of clean energy, powering nearly one million homes. The complaint, filed in the D.C. District Court, asks a federal judge to vacate the lease cancellation and strike down the settlement agreement.
SEC Proposes Complete Rescission of Climate-Related Disclosure Rules
On May 29, the Securities and Exchange Commission (“SEC”) proposed a complete rescission of its climate-related disclosure rules that would require companies to disclose material climate-related risks and GHG emissions in periodic reports. The SEC adopted the rules in March 2024 but stayed their implementation following several legal challenges, which were consolidated in the Eighth Circuit. In March 2025, the SEC voted to stop defending the rules in litigation, after which the Eighth Circuit ordered the Commission to formally rescind, repeal, modify or resume its defense of them. The proposal is subject to a 60-day public comment period and will require a vote by the Commission before the rescission is finalized. Comments may be submitted here and must be received by August 3, 2026.
New York Governor Signs Law Reframing State Climate Goals
On May 28, New York Governor Kathy Hochul signed the state’s $268.5 billion FY 2027 budget, which includes significant rollbacks to the 2019 Climate Leadership and Community Protection Act (“CLCPA”). The revised law replaces the original 2030 interim target of a 40% reduction in GHG emissions (from 1990 levels) with a new 2040 target of a 60% reduction. The budget pushes the deadline for the Department of Environmental Conservation to adopt emissions reduction regulations to the end of 2028—five years beyond the original statutory deadline. The budget also changes the state’s emissions accounting methodology from a 20-year to a 100-year timeframe, effectively making targets easier to meet without additional action. The CLCPA’s ultimate mandate of an 85% emissions reduction by 2050 remains intact. Governor Hochul justified the changes by citing affordability concerns, federal headwinds on renewables and the need to avoid “crushing costs” for residents and businesses.
State Action on Data Center Development
On May 27 and 29, respectively, New Jersey and Utah leaders announced new standards for data center development. In New Jersey, the governor and legislators introduced a policy platform aimed at addressing potential adverse impacts of data center growth. The platform’s four pillars are (i) establishing fair-share rules, (ii) improving transparency, (iii) creating strong statewide standards for community benefits agreements and (iv) promoting good-paying jobs. It is among the first comprehensive state approaches to data center regulation in the United States. In Utah, the governor issued an executive order creating a Data Center Framework that directs state agencies to adopt practices governing data center development. The Framework is intended to protect natural resources and utility ratepayers from potential cost impacts. Agencies must comply with the Framework and conduct extensive public outreach and engagement to help refine it. In issuing the order, Governor Cox acknowledged increasing public concern about the potential negative environmental effects posed by data centers.
Four State Attorneys General Sue Proxy Advisor Over Its ESG Policies
On May 20, the Attorneys General of Iowa, Nebraska, Texas and West Virginia separately sued Institutional Shareholder Services (“ISS”) alleging violations of state consumer protection and deceptive trade practice laws. The lawsuits allege that ISS misled investors by marketing its proxy voting recommendations as objective and independent while incorporating ESG and DEI considerations that were not tied to financial analysis. Several of the lawsuits also allege that ISS failed to fully disclose material conflicts of interest relating to its consulting business that provides several governance-related services, which include helping companies improve their ESG scores. The lawsuits each seek to enjoin ISS from engaging in the alleged deceptive trade practices, and Texas and West Virginia are also seeking monetary relief.
PayPal Settles DEI-Related Claims Brought by DOJ
On May 12, the U.S. Department of Justice (“DOJ”) announced a settlement with PayPal, resolving the DOJ’s investigation into the company’s Economic Opportunity Fund, a program created in 2020 that sought to increase investments in minority-owned businesses. As part of the settlement, which did not include any admission of liability from PayPal, the company agreed to launch a new Small Business Initiative with fee waivers for eligible veteran-owned or manufacturing, technology and farming businesses. The agreement requires PayPal to designate a director of the Small Business Initiative, submit plans and proposals for the initiative to the U.S. DOJ, make annual reports on the initiative and train its employees on the Equal Credit Opportunity Act. In its press release, the DOJ indicated that the agency is delivering on President Trump’s vow to root out “illegal DEI” from corporate America and is seeking to place corporations on notice.
Colombia Consolidates ESG Disclosure Framework for Financial Sector
On June 1, the Superintendencia Financiera de Colombia’s (“SFC”) Circular Externa 004 of 2026 went into effect, replacing and renaming the prior Basic Accounting and Financial Circular with a unified Basic Financial Circular applicable to all SFC-supervised entities. The circular integrates sustainability disclosures into a unified financial reporting framework and introduces standardized disclosure formats designed to enable cross-sector comparability of ESG performance. The circular also updates IFRS/NIIF-aligned accounting rules – including the treatment of environmental liabilities and climate-related provisions – and enhances governance reporting obligations covering board composition, related-party transactions and remuneration disclosures. Importantly, the circular consolidates prior SFC sustainability instructions, including Circular Externa 031 of 2021 (which adopted the TCFD and SASB standards for social and environmental disclosures by issuers) and Circular Externa 020 of 2022 on sustainability reporting. Colombia has also adopted a Green Taxonomy that seeks to classify environmentally beneficial activities.
Information provided by contributing law firm: Cuatrecasas
Brazil Relaxes Mandatory Climate-Related Financial Reporting Requirement
On May 29, Brazil’s Securities and Exchange Commission (“CVM”) published Resolution CVM No. 244, amending Resolution CVM No. 193 of October 20, 2023. The amendment revokes the mandatory requirement for publicly traded companies to prepare sustainability and climate-related financial information reports—an obligation originally set to begin for fiscal years starting on or after January 1, 2026. Brazil was the first country to mandatorily adopt the International Sustainability Standards Board (“ISSB”) standards IFRS S1 and S2; however, Resolution CVM No. 244 now relaxes this framework by shifting to a “comply or explain” model under which mandatory adherence to ISSB standards applies only to companies that voluntarily publish such reports, subject to a minimum commitment of three consecutive years. Companies that opt out must publicly justify and disclose their decision beginning January 1, 2027. The resolution also requires communication of any decision to discontinue voluntary reporting, and preserves independent auditor assurance requirements for reporting companies. The resolution took effect on May 29, 2026, and applies to fiscal years beginning on or after January 1, 2026.
Information provided by contributing law firm: Mattos Filho
Peru Approves Sustainable Bond Framework
On May 26, Peru’s Ministry of Economy and Finance issued Ministerial Resolution No. 236-2026-EF/52, approving the country’s Sustainable Bond Framework (Marco de Bonos Sostenibles del Perú). This framework establishes the guidelines under which the Peruvian government may issue sovereign sustainable bonds in capital markets to finance or refinance projects that deliver environmental and social benefits. Sustainable bonds issued under this framework are expected to channel proceeds toward eligible green categories—such as renewable energy, clean transportation and climate change adaptation—as well as social categories, including access to healthcare, education and affordable housing. The framework aligns with internationally recognized standards, including the ICMA Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines, ensuring transparency, credibility and investor confidence. Peru’s adoption of this instrument reinforces the government’s commitment to sustainable finance and positions the country to attract ESG-focused investments while advancing its national development and climate objectives.
Information provided by contributing law firm: Cuatrecasas
EU/U.K.
BSI Publishes a Global Framework for Net Zero Transition Planning
On June 3, BSI published ISO 32212, the first international standard for strategic net zero transition planning by financial institutions. The standard provides requirements and guidance for banks, insurers, asset managers and asset owners on embedding climate transition objectives into governance, risk management, financing decisions and engagement strategies. It consolidates existing frameworks from the Transition Plan Taskforce, Glasgow Financial Alliance for Net Zero (“GFANZ”) and Institutional Investors Group on Climate Change (“IIGCC”), as well as input from over 170 experts and organizations into a single, certifiable standard. The standard recognizes the enabling role of finance in the climate transition, as well as the critical role financial institutions can play in mobilizing capital to support clients and investees in their transition to a net zero, climate-resilient global economy. The publication arrives amid growing regulatory expectations and a period in which several major banks have scaled back voluntary climate commitments.
Germany Approves Eco-Design and Labeling Framework
On May 21, Germany approved a bill that modernizes Germany’s national eco-design and energy labeling framework in line with updated EU requirements. The bill aims to promote sustainable, energy-efficient and compliant products, strengthen market surveillance and improve consumer transparency regarding product sustainability and energy consumption. The bill also updates related national rules to ensure consistency with current European product compliance standards. The bill still must complete the last step of the legislative process (second reading in the Bundesrat—the upper legislative house of Germany) before entering into force.
Information provided by contributing law firm: Gleiss Lutz
APAC
Mandatory Extended Producer Responsibility for Product and Packaging Recycling Takes Effect in Vietnam
On May 25, Decree No. 110/2026/ND-CP implementing the Law on Environmental Protection with respect to extended producer responsibility (“EPR”) for product and packaging recycling entered into force. The Decree requires manufacturers and importers of in-scope products—including packaging used in consumer goods, cosmetics, pharmaceuticals and cement—to fulfill mandatory recycling obligations when placing goods on the Vietnamese market. Where imports are made under an authorized arrangement, the entity responsible for product labeling bears the EPR obligation. Obligated parties may self-recycle, engage licensed third-party recyclers, or delegate to specialized EPR organizations. Mandatory recycling rates are subject to upward revision every three years, not to exceed 10% per cycle, with the first adjustment anticipated in 2029. Entities with annual revenues below VND 30 billion from in-scope products are exempt. From 2027, EPR obligations will extend to road transport vehicles.
Information provided by contributing law firm: Le & Tran
Vietnam Establishes Framework for International Carbon Credit Exchange
On May 19, Decree No. 112/2026/ND-CP entered into force, establishing the legal framework for an international carbon credit exchange in Vietnam through three recognized mechanisms. First, Article 6.2 permits bilateral transfers between Vietnam and other Paris Agreement parties or international organizations to fulfill Nationally Determined Contribution (“NDC”) targets, subject to written approval from both parties. Second, Article 6.4 allows agencies and organizations participating in emission-reduction programs or projects to transfer verified carbon credits internationally for NDC compliance. Third, independently certified carbon standards, which include international certification systems outside the Paris Agreement framework, may also be applied. All transactions must be recorded in Vietnam’s National Registry System for GHG quotas and carbon credits, and transfer approval may only be granted after credits are verified and the opinions of competent authorities have been obtained. The Ministry of Agriculture and Environment (MAE) is the designated approving authority.
Information provided by contributing law firm: Le & Tran
South Korea Amends Enforcement Decree to Strengthen Monitoring of National GHG Reduction Targets
On May 12, South Korea amended the Enforcement Decree of the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis. The amendment updates the reference framework for central administrative agencies’ long-term GHG reduction planning, replacing the previous reference to the central sustainable development master plan with a national basic strategy for sustainable development. More notably, the amendment strengthens the implementation review process for national GHG reduction targets. Central and local administrative agencies, as well as public institutions, must now provide written explanations where they do not reflect policy recommendations, corrective measures or improvement requests arising from implementation reviews. The amendment also requires public disclosure, through the National Carbon Neutrality and Green Growth Commission’s website, of failures to prepare, submit or supplement greenhouse gas reduction plans as required. These changes are expected to enhance accountability and transparency in South Korea’s carbon neutrality governance framework.
Information provided by contributing law firm: Yoon & Yang LLC
Standards and Associations
CDP Announces Organizational Split
On June 11, CDP, a global environmental disclosure system, announced its split into two separate organizations, CDP and CDP Foundation. CDP, the commercial entity backed by a private equity firm, will continue to provide comprehensive environmental insights and disclosure systems to its customers. CDP Foundation will be a charitable organization focused on translating world-leading science into action-ready disclosure methods. CDP Foundation will benefit from access to CDP data, which will enable the organization to advance public-purpose research, analysis and thought leadership to support transparency and accelerated environmental improvement. CDP indicated that the announcement will have no impact on the 2026 disclosure cycle, which will continue to operate as planned.
SBTi Releases Final Corporate Net-Zero Standard
On June 11, the Science Based Targets initiative (“SBTi”) released its final Corporate Net-Zero Standard Version 2.0, marking its most comprehensive SBTi Standard to date. The new Standard intends to assess, certify and track companies’ decarbonization commitments and to support science-based target setting. Key elements of the new standard include (i) accommodations for small and medium-sized enterprises and companies in lower-income countries, (ii) an implementation hierarchy that prioritizes actions from those directly reducing emissions in company operations and (iii) the introduction of a new Ongoing Emissions Responsibility framework, a new optional framework designed to recognize companies voluntarily taking responsibility for their ongoing emissions, through actions such as funding emissions reductions or removals. The release of this Standard follows the recent announcement of SBTi’s five-year strategy which expanded the focus of the organization from target-setting and validation to supporting companies in the implementation of their climate goals.
TISFD Issues Draft Framework for Reporting on Human Rights and Social Impact
On May 26, the Taskforce on Inequality and Social-related Financial Disclosures (“TISFD”) announced the release of a draft framework designed to improve how businesses and financial institutions report impacts, dependencies, risks and opportunities related to human rights and inequality. The initial draft includes conceptual foundations, proposed general requirements, draft disclosure recommendations and areas for future development. The framework aims to foster greater harmonization across global disclosure standards and reduce fragmented reporting on people-related issues. TISFD is seeking feedback on the draft by July 31, 2026 and expects to deliver the final framework in 2027.
Contributing Law Firm Information
Cuatrecasas | Gleiss Lutz | Le & Tran | Mattos Filho | Yoon & Yang LLC