July 2026: Revised EU sustainability reporting standards, AI discrimination lawsuits, new requirements under the UK Modern Slavery Act, and more

Key highlights from July 2026 in the sustainability space.

1- EU Commission revises sustainability reporting standards

In the bloc's continued efforts to harmonize and simplify ESG-related disclosures, the European Commission has adopted revised European sustainability reporting standards (ESRS) for EU businesses as well as a voluntary standard for smaller companies.

The revised ESRS clarifies certain provisions and grants flexibilities in regards to how certain sustainability metrics are measured and the degree of granularity required in company reporting. In particular, the text aligns more closely with global GHG emission standards and global target to limit warming to 1.5 degrees, as well as eases disclosure requirements for issues such as microplastics, human rights incidents, materiality assessments, and omission of information.

The voluntary reporting standard aims to give smaller, non-mandated companies a simple sustainability reporting framework while curbing excessive "trickle-down" data requests from larger firms in their value chains.

The amended regulation shall apply to the financial years beginning on or after 1 January 2027.

2. GHG Protocol and IOS merge carbon emission accounting standards

The Greenhouse Gas Protocol and the International Organization for Standardization  announced that they will merge their corporate carbon accounting standards into a harmonized global accounting standard. The initiative will align the GHG Protocol’s corporate emissions accounting framework, including Scope 1, 2 and 3 emissions, with ISO standards in order to improve consistency, comparability and interoperability across corporate carbon reporting systems. The move comes amid global efforts to simplify and harmonize sustainability reporting requirements, including the EU’s recent ESG reporting reforms.

3. Meta facing lawsuit for AI tools enabling disability discrimination

Following global layoffs affecting approximately 10% of its employees, Meta is facing a lawsuit alleging that its AI-assisted performance evaluation tools discriminated against employees with disabilities or medical conditions. The plaintiffs contend that Meta relied on algorithmic scoring and performance ranking systems that disadvantaged employees who had taken protected medical or family leave or whose productivity had been affected by a disability. The complaint was filed anonymously by 26 plaintiffs who had received disability accommodations or taken protected leave.

The case signals growing legal scrutiny of AI-driven employment decision-making and the potential application of disparate impact theory under U.S. employment law, a concept broadly analogous to indirect discrimination under the EU Employee Equality Directive, where a facially neutral policy disproportionately disadvantages a protected group. Although federal agencies have deprioritized enforcement of disparate impact claims, such cases remain admissible under certain state laws and through private litigation.

4.  State governments and municipalities move to limit data center development

As tech companies move to expand AI infrastructure across the U.S., a trend bolstered by federal deregulation of environmental standards, New York became the first state to place a moratorium on data center development. The Executive Order No. 62 pauses review of permit applications for construction or expansion of data centers while the state's Department of Public Service assesses potential environmental impacts of new data centers.

Similar moratorium bills have been filed in fifteen states, but none have yet been passed into law. Meanwhile, county-wide moratoriums have taken effect in cities such as Little Rock, Oklahoma City, and West Chicago, highlighting an increasingly bipartisan concern over the environmental and public health impacts of data centers, particularly in areas with limited water and energy resources.

5.  China unveils five-year Carbon Peaking Action Plan

China has issued a Five-Year Action Plan to achieve peaking carbon dioxide emissions by 2030 and reach carbon neutrality by 2060 – 10 years after Europe’s stated goal. The plan provides for the development of non-fossil energy, closer international cooperation, and improved regulations in order to optimize China's energy infrastructure, promote sustainable industrial development and facilitate low-carbon transition in key sectors. While China leads the world in global emissions, its commitment to decarbonization through investment, sectoral development and policy has already amounted to a steady decrease in its global emissions throughout 2025 and 2026.

6. UK strengthens reporting requirements under the Modern Slavery Act

The UK has proposed amendments to the Modern Slavery Act 2015 that would strengthen reporting obligations for organisations subject to the Act. The proposed reforms would amend Section 54, which requires commercial organisations with annual turnover of at least £36 million to publish an annual modern slavery statement. The amendments introduce mandatory disclosures regarding corporate structure, supply chains and due diligence processes, which must receive formal certification by the entity’s board or members. The Act also establishes a civil penalty regime for non-compliance. The legislation is awaiting Royal Assent before transitional provisions are introduced.

The proposed reform coincides with the implementation of the EU Forced Labour Regulation, which will prohibit products made with forced labour from being placed on or exported from the EU market starting in December 2027. Taken together, these developments signal increasingly stringent supply-chain due diligence and reporting expectations across Europe, requiring companies to strengthen traceability, supplier oversight and modern slavery compliance frameworks.

- Content prepared with the help of Amanda Alden.

June 2026: Duty of vigilance breach for TotalEnergies, SEC climate disclosure rollbacks, EU methane regulation remains on track, and more

Key highlights from June 2026 in the sustainability space.

1. TotalEnergies found liable for duty of vigilance breach

On June 25, 2026, the Paris Judicial Court's decision in NAAT et al. v. TotalEnergies found the company's vigilance plan incomplete and ordered it, within six months, to extend its risk mapping to cover climate risks tied to its Scope 3 emissions. Rejecting TotalEnergies' argument that downstream emissions fall solely to consumers, the Court drew on foreign environmental rulings recognizing a "very close causal link" between fossil fuel production and combustion — echoing the UK Supreme Court's Finch decision and the Hague Court of Appeal's Shell ruling — to hold that the duty of vigilance extends to these emissions.

Notably, however, the Court declined to prescribe specific emissions-reduction targets or pathways, holding that dictating the content of mitigation measures would exceed its supervisory role under the 2017 law, which remains grounded in corporate self-regulation. It also stayed the remaining claims pending TotalEnergies' revised plan, with no penalty imposed at this stage. As one of the first judgments to assess corporate climate due diligence on the merits, it is likely to shape future climate litigation and the interpretation of due diligence obligations across Europe.

2. European Commission refuses to delay methane rules implementation

In an open letter addressed to the European Commission, eleven EU Member States, together with the energy ministers of the United States, Algeria, Nigeria and Qatar, called on the Commission to postpone the implementation of Regulation 2024/1787 on the reduction of methane emissions.

As of January 1st 2027, the Regulation requires importers of coal, oil and natural gas to demonstrate that production took place under methane monitoring and verification standards equivalent to those applied in the EU, and introduces maximum methane intensity requirements from 2030. The signatories argue that such compliance requirements are not yet feasible, and request a “stop-the-clock mechanism” to allow companies additional time to adapt their supply chains. European Commissioner for Energy Dan Jørgensen rejected calls to reopen the legislation, stating that the Commission would instead issue additional guidance to support industries and Member States in implementation. 

 3. California’s SB 253 delayed while litigation remains pending

The California Air Resources Board (CARB) has deferred the initial reporting deadline under the Climate Corporate Data Accountability Act (SB 253) for companies with annual revenues exceeding US$1 billion. Covered companies will now be required to report their Scope 1 and Scope 2 greenhouse gas emissions by 10 November 2026.

 The postponement comes amid ongoing litigation challenging California’s climate disclosure framework. In November 2025, the Ninth Circuit granted an injunction pending appeal blocking enforcement of SB 261 (the Climate-Related Financial Risk Act), while leaving SB 253’s emissions reporting obligations intact. CARB’s decision to delay implementation reflects efforts to provide greater regulatory certainty and clarify compliance expectations as the litigation proceeds.

4. Commission adopts rules for calculating recycled content in PET bottles

On 30 June 2026, the European Commission adopted an Implementing Act establishing a harmonised methodology for calculating, verifying and reporting chemically recycled content in single-use polyethylene terephthalate (PET) beverage bottles. The rules apply to both mechanical and chemical recycling technologies and are intended to ensure transparent and consistent calculation and reporting practices across Member States, supporting implementation of the recycled-content targets under the Single-Use Plastics Directive.

The Act also clarifies the conditions under which recycled plastic from non-EU countries may count towards the EU's recycled-content targets. By introducing a uniform methodology, the new rules provide greater legal certainty for manufacturers and recyclers, facilitate compliance with recycled-content requirements, and create a level playing field for the plastic recycling sector while supporting investment in recycling technologies.

5. EU Council proposes Sustainable Finance Disclosure Regulation amendments to improve market transparency

On 24 June 2026, the Council of the EU published its negotiating position on revisions to the Sustainable Finance Disclosure Regulation (SFDR), aimed at simplifying sustainability transparency requirements, reducing administrative burdens and increasing comparability for investors.

The proposed reforms would address concerns that the current SFDR framework has led to inconsistent market practices and confusion surrounding Article 8 products (which promote environmental and/or social characteristics) and Article 9 products (which have sustainable investment as their objective).

Although these provisions were originally designed as disclosure requirements rather than product labels, they have increasingly been used by the market as sustainability classifications. According to the European Supervisory Authorities, this has increased the risk of misleading sustainability claims and greenwashing. The proposed framework would introduce new sustainability product categories to replace the current reliance on Article 8 and Article 9 classifications. The Council's position will now be negotiated with the European Parliament before the amendments can be formally adopted.

- Content prepared with the help of Amanda Alden.

May 2026: EU Green Transition Directive infringement procedures, Sustainability reporting rollback in Brazil and the U.S., PFAS contamination suit filed in France, and more

Key highlights from May 2026 in the sustainability space.

1- EU commission opens Green Transition Directive infringement procedures against 20 Member States

The European Commission has opened infringement procedures against 20 Member States, including France, for failure to transpose the Directive on Empowering Consumers for the Green Transition (Directive 2024/825) into their national laws. The Directive, which protects consumers from unfair commercial practices around greenwashing and encourages companies to adopt more sustainable practices, was supposed to be transposed by March 27, 2026. The Member States who have not yet fully adopted the Directive have two months to communicate their transposition measures to the Commission. In case of continued non-compliance, the Commission may issue a reasoned opinion before referring the case to the Court of Justice of the European Union.

2- Brazil rolls back sustainability reporting requirements for public companies

In a reversal of its 2023 decision to require ISSB-aligned sustainability reporting for public companies, Brazil’s Securities and Exchange Commission has amended its regulation in favor of a voluntary reporting system. Under the amended rules, public companies must abide by a 'comply-or-explain" system, in which entities that opt out of sustainability reporting must disclose and explain that decision to the market.

The rollback echoes a global trend of revision to climate disclosure mandates, including the amendments to the EU Corporate Sustainability Reporting Directive, as regulators attempt to balance corporate costs, transparency, and sustainability. After touting the COP30 as the "COP of implementation,” Brazil’s decision signals a shift in its position as a green transition leader among emerging economies.

3- U.S. Securities and Exchange Commission proposes rescission of Disclosure Rules

The U.S. Securities and Exchange Commission has proposed the rescission of its 2024 Climate-Related Disclosure Rules for public companies. The Rules, passed under the Biden administration in March 2024, were followed by immediate contention, with a temporary stay issued 9 days after their adoption, followed by a court order holding the consolidated petitions for review until the SEC reevaluated the text. The rescission proposal responds to that order by abrogating the rules in their entirety on the grounds that they fall outside the SEC's mandate and are unjustified relative to the costs on public companies.

If finalized, the Proposal would annul all obligations under the CDR, including GHG Scope 1 and 2 emissions disclosure, board oversight of climate risks, and disclosure of material climate-related risks. Yet, this does not exempt companies operating under California's Climate Corporate Data Accountability Act, nor the European Union's CSRD, which impose disclosure requirements on large companies and require operators in these markets to maintain their climate reporting capabilities.

4- French State sued over inaction on PFAS contamination

After a series of lawsuits targeting industrial companies, three NGOs and residents of PFAS-contaminated communities filed a lawsuit against the French state over its failure to address PFAS pollution. The plaintiffs claim that the state was aware of the environmental and health dangers of these chemicals for over a decade and that their negligence caused direct harm to its citizens.

While the quantity of PFAS-containing pesticides used in France has increased by over 400% since 2008, the State's flagship measure to curb PFAS pollution has yet to come into force, over a year after its enactment. The petition calls on the French state to regulate the release of PFAS into the environment, intensify decontamination efforts and compensate affected individuals and communities.

5- State Supreme Court partially blocks Greenpeace International anti-SLAPP proceedings

On May 7, the North Dakota Supreme Court issued an international anti-suit injunction partially restricting Greenpeace International's proceedings against Energy Transfer in the Netherlands. Energy Transfer had sued Greenpeace in North Dakota in 2019, alleging defamation, tortious interference and conspiracy arising from Greenpeace's opposition to the Dakota Access pipeline. In response, the Dutch association filed an anti-SLAPP lawsuit against Energy Transfer in the Netherlands jurisdiction, contending that Energy Transfer's lawsuit intended to suppress its participation in public debate and violated rights under Dutch and EU anti-SLAPP law.

The court held that certain aspects of the Dutch proceedings were vexatious because they required the Dutch court to determine that the North Dakota litigation lacked a legal basis. It therefore enjoined Greenpeace from pursuing those claims, while allowing the Dutch action to proceed insofar as it relied on separate allegations, including Energy Transfer's dismissed federal RICO action and statements not adjudicated by the North Dakota courts. The ruling represents a rare attempt by a U.S. court to constrain the scope of foreign anti-SLAPP proceedings, potentially setting an important precedent in transnational climate and environmental litigation.

- Content prepared with the help of Amanda Alden.

April 2026: SNB pressed to disinvest from Palentir, EC announces clean energy package, calls for ISSB nature-related disclosure standard, and more

Key highlights from April 2026 in the sustainability space.

1-Minneapolis campaigners press Swiss National Bank to disinvest from Palantir

On April 24, a delegation from Minneapolis urged the Swiss National Bank to divest their $1.1 billion stake in Palantir due to human rights concerns about its surveillance technologies. The data analytics firm signed a contract with the U.S. Department of Homeland Security in 2025 to support immigration and customs enforcement operations, whose agents are linked to the death of two Minneapolis-based activists and the arbitrary detention of several thousand migrants. The delegation, alongside Swiss campaign group BreakFree Suisse, argued that the investment violates the National Bank’s own policy, which proscribes investment in entities that violate human rights or Swiss values.

While Switzerland only represents 0.4% of Palantir shareholders, it is one of the only countries whose financial institutions have a direct public stake in the company. The Minneapolis delegation’s advocacy, alongside similar action in Norway and Britain, represents a powerful lever in ESG advocacy: holding not only companies but also their investors accountable for human rights violations linked to their investments.

2-European Commission announces policy package to fast-track clean energy

The European Commission has unveiled a new policy toolbox that aims to support energy transition and independence amidst rising fuel costs and fragilized global markets for clean energy. The Accelerate EU package aims to provide immediate relief for rising fuel costs, while also structuring the Union’s long-term clean energy strategy. Among the policy tools is the Commission’s 2026 Investment Strategy, which mobilizes private funds for energy technologies in partnership with the European Investment Bank Group, which has pledged over 75 billion for clean energy projects.

3-Sustainability leaders urge ISSB to implement global reporting standards

In an open letter addressed to the International Sustainability Standards Board, nineteen global leaders in conservationism and climate science called on the ISSB to adopt a dedicated standard on nature. The letter follows the ISSB’s decision to develop optional nature-related disclosures, rather than mandatory global standards.

The signatories assert the materiality of nature as a key climate and economic stabilizer, while noting the World Economic Forum’s 2026 finding that nature represents 44 trillion in economic value generation, whereas biodiversity losses represent 2,7 trillion in global annual costs. Beyond its climactic impacts, nature-related financial materiality is increasingly recognized as a key factor for responsible and profitable investments. 

4-IBM reaches $17M settlement with the DOJ to resolve DEI allegations

IBM has agreed to a $17 million settlement with the U.S. Department of Justice following a probe into the company’s DEI practices. The case represents the first resolution under Attorney General Todd Blanche’s Civil Rights Fraud Initiative, launched in 2025, which allows the DOJ to investigate recipients of federal funds that knowingly violate civil rights laws.

While IBM was not found guilty of noncompliant DEI practices, the legal risks associated with such programs has increasingly dissuaded companies, prompting some to scale back their policies in response to heightened enforcement.

The settlement comes in the wake of a March 2026 Executive Order establishing new rules for anti-DEI compliance, which apply to federal contractors and subcontractors and cover guidelines for reporting, contract terms, implementation and enforcement. The Order also mandates that all federal agencies review its implementation within 120 days, signaling increased scrutiny and assessment of companies’ internal policies.

5-African Energy Chamber joins amicus curiae in advisory proceeding before the AfCHPR

Following a request by the Pan-African Lawyers Union in March 2025 for a landmark advisory opinion from the African Court on Human and Peoples’ Rights (AfCHPR), the African Energy Chamber has joined a growing list of NGOs and private entities participating in the proceedings as amicus curiae.

The petition, filed in May 2025, calls on the Court to clarify the human rights obligations of African States under the African Charter on Human and Peoples’ Rights in the context of climate change, particularly where harm is caused by third parties such as multinational corporations.

Taking into account the differentiated responsibilities of CO2 emitters and the continent’s particular vulnerabilities, factors largely unaddressed in the ICJ’s advisory opinion, the proceedings could pave the way for mandatory due diligence, emissions disclosure requirements, and greater corporate accountability under Article 21(5) of the Charter, which obliges State Parties to eliminate foreign economic exploitation. 

- Content prepared with the help of Amanda Alden.

March 2026: California’s GHG disclosure rules, Vigilance ruling against Yves Rocher, Australia’s sustainable finance taxonomy guidelines, and more

Key highlights from March 2026 in the sustainability space.

1- California advances new GHG emissions reporting rules for $1B+ firms

On March 23, the California Air Resources Board (CARB) held a public workshop laying out reporting requirements for $1B+ firms following the adoption of Senate Bill 253. The legislation, passed in 2023, represents one of the most extensive corporate climate disclosure laws in the US.

Beginning in 2026, companies must report on Scope 1 and 2 emissions resulting from direct emissions from sources owned by a company or due to generation of purchased energy. From 2027, this will also apply to Scope 3, covering indirect emissions from distribution, purchased goods, or use of sold products. By expanding these requirements to the full value chain, SB 253 establishes reputational exposure for carbon-heavy entities who will need to reevaluate their production, procurement, and supply chain through an emissions lens.

In light of reporting complexity, the Board is considering several regulatory options, including broad applicability across reporting entities; sectoral phase-in with an initial focus on transportation, technology and energy; or category phase-in beginning with most reported categories such as business travel and purchased products. These open questions reflect uneven data availability and collection practices across sectors, as well as ongoing uncertainty regarding the feasibility and materiality of certain emissions categories.

2- Yves Rocher Group found in violation of due diligence obligations

On March 12, 2026, the Tribunal of Paris found the Yves Rocher Group liable for failing to meet its due diligence obligations in relation to a Turkish subsidiary. The plaintiffs, supported by Action Aid and Sherpa, were wrongfully terminated in 2018 following unionization.

The tribunal held that France’s 2017 Due Diligence Law establishes mandatory provisions which the legislature expressly intended to encourage responsible and sustainable management of French supply chains and enable victims to seek redress before French jurisdictions. By failing to assess and prevent risks of human rights violations within its subsidiary, the Yves Rocher Group breached its obligations and was ordered to pay pecuniary and moral damages to the Turkish workers’ union as well as several individual workers involved in the case.

Crucially, the Tribunal determined that the imperative character of the Diligence law qualifies it as an overriding mandatory provisions covered by article 16 of the EU Rome II regulation. Accordingly, French companies cannot shield themselves under more favorable local laws to avoid due diligence obligations. The ruling constitutes a first condemnation for commercial activities abroad, as several other multinationals, including TotalEnergies and BNP Paribas face similar proceedings.

3- Lawsuits filed in D.C. Circuit challenge EPA Greenhouse Gas Endangerment finding

A coalition of 24 U.S. states has sued the Environmental Protection Agency for its recent repeal of the 2009 Endangerment Finding underlying GHG regulations in carbon-intensive sectors, previously reported on here. The case is one of several targeting recent EPA rollbacks, including a coalition of states and health and environmental groups contesting the repeal of Mercury and Air Toxics Standards, as well as a second suit against the Endangerment filing appeal brought by the American Public Health Association, American Lung Association, and the American Academy of Pediatrics, among others.

As federal courts review and, in some instances, stay or remand major regulatory rollbacks, regulatory uncertainty is increasing for both public and private actors. This evolving litigation landscape may delay enforcement outcomes as stakeholders await definitive judicial rulings before adjusting compliance strategies or operational activities.

4- Australia introduces Sustainable Finance Taxonomy guidelines for debt issuance

The Australian Sustainable Finance Institute (ASFI) has released new guidance to support application of the country’s Sustainable Finance Taxonomy in debt instruments. Developed in cooperation with the Australian Treasury, New Zealand Treasury, and public debt managers, the framework focuses on use-of-proceeds structures such as sustainability bonds, aiming to establish consistent terminology, disclosure standards, and technical screening criteria for climate finance.

The guidance comes amid continued growth in the market, with Australian sustainable debt issuance reaching $53.8 billion in 2025, an 11% annual increase. ASFI CEO Kristy Graham emphasized that the taxonomy has already been tested with several financial institutions to ensure its applicability within key sectors such as mining and agriculture, representing an important step toward integrating traditionally hard-to-abate industries into climate finance frameworks.

5- TotalEnergies relinquishes offshore wind leases in U.S. Department of the Interior settlement

TotalEnergies has relinquished two offshore wind leases in a settlement agreement negotiated with the U.S. Department of the Interior. Under the agreement terms, TotalEnergies will be wholly reimbursed and invest 928 million in conventional oil and shale gas projects in Texas.

Though TotalEnergies’ statement indicates that the decision reflects concerns about power affordability for consumers, the buyout comes on the heels of attempts by the Trump administration to halt five offshore wind projects already underway and as the company faces proceedings for violating its due diligence violations, previously reported on here.

- Content prepared with the help of Amanda Alden.