February 2026: Historic US regulatory rollback, EU emissions to reduce by 90%, TotalEnergies in court, and more

Key highlights from February 2026 in the sustainability space.

1- EPA repeals federal regulations of motor vehicle GHG emissions

On February 12th, 2026, the Environmental Protection Agency rescinded the 2009 Endangerment Finding and eliminated all subsequent federal standards on motor vehicle GHG emissions, thereby enacting the largest deregulatory action in U.S. history. The action follows an EPA review of the Obama-era Endangerment Finding, which had determined that motor vehicle GHG emissions contribute to air pollution and may reasonably be considered to endanger public health under the Clean Air Act. The agency concluded that the Clean Air Act does not bestow the EPA with regulatory authority and that the obligations emanating from it are therefore invalid.

The state of California has already announced its intention to sue the Trump administration in an aim to restore the Endangerment finding, whose rescission paves the way for abrogation of federal tailpipe, power plant, and fuel economy standards. Meanwhile, the removal of federal standards may enable states to set their own GHG rules, underscoring the pivotal role for courts in mediating political ideology and climate standards, as well as the potential for state coalitions to counteract environmental deregulation.

2- EU to reduce greenhouse gas emissions by 90% in 2040 compared with 1990 levels to reach a climate neutral EU by 2050.

On February 10th, the European Parliament voted an amendment to the EU Climate Law that includes a binding 2040 emissions reduction target of 90% compared to 1990 levels, with the aim of achieving climate neutrality by 2050. The legislation provides for multiple forms of emission reduction, including high-quality carbon credits, EU-based carbon removals, and other existing or  future net-zero energy technologies.

While the 2040 goal is ambitious, political resistance remains strong across several Member States, particularly as economic strain has pushed climate change to the political back seat. The Commission will therefore play a decisive role in both proposing relevant legal and financial instruments and encouraging Member States to align their domestic policies with the Union’s climate objectives.

3- Merits of lawsuit against TotalEnergies heard in Paris court

On February 19th and 20th, the Paris Judicial Court heard the merits of the case brought against TotalEnergies by a coalition of environmental NGOs. Plaintiffs argue that the company's carbon output and expansion projects violate the duty of vigilance, a concept enshrined in a 2017 French law that obliges companies to conduct due diligence and implement mitigation measures for human rights issues and environmental harms. This case marks the first ruling on the law's application to climate change, highlighting TotalEnergies' involvement in at least 30 major fossil fuel projects that represent over half of the remaining carbon budget to limit warming to 1.5 degrees Celsius. 

While similar cases such as those brought against Shell have not imposed reduction obligations, the suit against TotalEnergies is one of the first to come before the courts since the ICJ's historic advisory opinion in July 2025. The scope of TotalEnergies’ influence in fossil fuel expansion will therefore be examined at a time when courts are increasingly holding major greenhouse gas emitters accountable for their role in climate change, representing an opportunity for the judiciary to directly intervene in favor of environmental protection.

4- EU gives final approval to CSDDD Rollbacks

After a series of negotiations between EU governments and the European parliament, member states gave final approval to a rollback of corporate sustainability rules in a series of amendments to the Corporate Sustainability Due Diligence Directive. Under the revised framework, addressing human rights and environmental risks will only be obligatory for EU companies with over 5,000 employees and annual revenues above 1,5 billion euros. Foreign entities generating equivalent turnover within the EU will also fall under the Directive.

The legislation is part of the Omnibus Directive, developed in an optic of regulatory simplification and increased competitivity, whose modifications to the CSRD we have previously reported on here.

5- SB13, Texas anti-ESG law, struck down by federal judge.

A federal judge has ruled that Texas Senate Bill 13, which required public investment funds to divest from firms determined to be boycotting fossil fuels, violates the First and Fourteenth Constitutional amendments. The decision considered that the definition of a boycott, covering “any action that is intended to penalize, inflict economic harm on, or limit commercial relations” was unconstitutionally vague, thereby curtailing free speech and limiting due process for firms deemed to be non compliant.

This decision notwithstanding, the legal and political environment remains volatile for ESG-focused companies. On February 27th, Texas Attorney General Ken Paxton announced a 29M USD settlement with Vanguard Group, as part of an eleven-state lawsuit against Vanguard, BlackRock and State Street. Vanguard Group was alleged to have unfairly driven up coal prices and deceived investors, and agreed to desist from its ESG commitments.

- Content prepared with the help of Amanda Alden.

January 2026: Hamburg Declaration, IPSASB's inaugural public sector standard, PepsiCo’s call for a sustainability reframe, and more

Key highlights from January 2026 in the sustainability space.

1- Nine countries launch the Hamburg Declaration for clean energy

On January 26, 2026, the governments of Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, and the United Kingdom signed the Joint Offshore Wind Investment Pact and the Hamburg Declaration, committing to the development of 300 GW of offshore wind energy capacity by 2050, including 100 GW through transnational cooperation projects.

In cooperation with the European Commission and the European Investment Bank, the Pact commits to the steady build-out of wind projects across the North Seas by removing regulatory obstacles to Power Purchase Agreements and implementing two-sided Contracts for Difference to facilitate investment, while also driving industrialisation and collaboration to support scalability and cost-effectiveness.

This initiative reflects broader concerns regarding Europe’s energy autonomy and its implications for regional security. While the Trump administration  terminated 7,6 billion USD in clean energy grants in 2026, U.S. companies have benefited from sanctions on Russia, as oil and gas together accounted for 58% of the EU’s energy consumption in 2025. The Pact seeks not only to establish a low-carbon counterweight that supports Europe’s energy independence, but also to strengthen regional security and defense through “increased cooperation in the framework of NATO, as appropriate, to enhance its defense, security, and resilience.”

2- EU Joint Bank Reporting committee publishes 2026 Work Programme and ESG recommendations

The EU Joint Bank Reporting Committee published its 2026 Work Programme alongside a set of ESG recommendations, making semantic integration and harmonised reporting standards a priority in 2026. The recommendations aim to standardize how European financial institutions define, categorize, and report ESG information across statistical, supervisory and resolution reporting.

The initiative aligns with the EU’s broader objective to improve data quality, reduce remediation costs for market actors, and enhance interoperability across institutions and sectors.

3- PepsiCo CEO calls for sustainability reframe

Speaking at the World Economic Forum in Davos, the PepsiCo CEO Ramon Laguarta called on companies to reframe their discussions of sustainability and growth as a question of short and long-term costs, rather than as a trade-off between sustainability and profits. His speech emphasized that business models founded on growth must determine how to generate expansion without depleting the resources necessary for future growth.

His remarks echo broader industry concerns about the impact of global warming and extreme weather on the food and beverage sectors, which are facing rising adaptation and risk-management costs while navigating regulatory tensions between the EU and the US. Against the backdrop of regulatory rollbacks in the US and a $4.3 trillion annual financing gap for SDG goals, private sector engagement is increasingly positioned as a critical investment.

4- U.S. exits the Paris Climate Agreement for the second time

On January 7th 2026, the White House published a Presidential Memorandum directing the withdrawal of the United States from 66 international organisations considered to no longer serve national interests, including the Paris Climate Agreement.

The decision, which constitutes the second withdrawal from the Agreement under a Trump administration, underscores the volatility of U.S. engagement on climate change, even as the IPCC warns that some climate systems already show signs of irreversible changes. Despite the disengagement of the world’s second largest CO2 emitter, the Secretary-General reaffirmed the UN’s commitment to limiting global temperature rise to 1.5° Celsius and emphasized its readiness to engage with the Trump administration on this issue.

5- IPSASB releases public sector standards on climate disclosures

The International Public Sector Accounting Standards Board (IPSASB) has released its inaugural public sector standard on climate-related disclosures, representing Phase 1 of its two-phase climate-related disclosures project. Phase 2 will address the regulatory and policy roles of public sector entities.

Developed in cooperation with the World Bank, the standards align closely with those issued by the IFRS for private-sector sustainability reporting, while also addressing broader stakeholder needs beyond investors. The standards emphasize the considerable financial risk that climate change represents for governments, as well as the importance of transparency and high-quality disclosures in evaluating how these risks impact public services. The standards also introduce a rebuttable presumption in favor of the GHG Protocol, establishing an expectation that entities will use this protocol for emissions reporting unless they justify the use of an alternative methodology.

IPSASB SRS 1 is effective for annual reporting periods beginning on or after January 1, 2028, with earlier application permitted.

- Content prepared with the help of Amanda Alden.

December 2025: First Swiss Climate Case, NY GHG emissions regulations, EU tackles plastics, and more

Key highlights from December 2025 in the sustainability space.

1- Swiss court declares climate case Asmania et al. vs Holcim admissible

On December 17, the Cantonal Court of Zug declared admissible a civil claim filed by Indonesian islanders against the cement company Holcim. The complaint, filed in 2023, alleges that as one of the main CO2 emitters, Holcim is neglecting its climate obligations and therefore contributing to recent flooding of low lying Indonesian islands.

The ruling rejects the company’s argument that climate protection should remain within the ambit of policy and that companies should not be subject to justiciable accountability. In doing so, the court echoes the logic of the ICJ’s July 2025 advisory opinion which established that the tangible harm induced by unchecked environmental degradation necessitates substantive and enforceable climate obligations. By affirming the admissibility of climate cases brought by civil society on grounds of objective and avoidable harm, the decision paves the way for climate justice that holds major polluters directly accountable.

2-New York announces new GHG emissions disclosure regulations

On December 1, 2025, the New York State Department of Environmental Conservation (DEC) announced new regulations for mandatory greenhouse gas (GHG) emissions disclosure, to take effect in 2027. This decision enacts part 253 pursuant to the state’s Climate Leadership and Community Protection Act, which implemented state-wide 60% reduction of GHG emissions by 2030.

The DEC’s regulations require certain entities that emit 10,000 metric tons of CO2 annually, including fuel suppliers, waste disposal, and petroleum and natural gas facilities, to provide GHG emission data reflecting the previous year’s emissions.

This advancement represents a further step towards efforts by several states, including California, Washington, Minnesota, Illinois and New York, to harmonize their disclosure legislation and thereby reinforce climate obligations for major emitters. While these states account for approximately 7% of national emissions based on 2023 data, their combined economies represented roughly 30% of U.S. GDP in 2024, making this multistate group a significant economic force in incentivizing climate action.

3- European Commission unveils pilot action for plastics

On December 24, the European Commission announced a set of pilot actions aiming to optimize plastics recycling. The implementing act, which establishes end-of-waste criteria and quality management systems to be implemented by producers, is published for public feedback until January 26 before its final adoption.

These measures are part of the upcoming Circular Economy Act, to be proposed in 2026, which will address legal certainty for chemical recycling, the implementation of the Single Use Plastics Directive, and harmonization of rules for the calculation, verification and reporting of chemically recycled plastics.

4- UK regulator bans ads over greenwashing

On December 3, the UK Advertising Standards Authority (ASA) published three rulings banning ads from Nike, Lacoste and Superdry over misleading environmental claims. In each case, the ASA found that companies’ advertising of products as sustainable were likely to mislead consumers and violated the Committees of Advertising Practice (CAP) code, which requires businesses to provide a high level of substantiation for all environmental claims.

Significantly, in the cases of Nike and Lacoste, the sole factor of products containing mainly recycled materials or certified fabrics did not constitute sufficient claim to sustainability, as the companies had not provided evidence that their products had no detrimental environmental effects when taking into account their entire life cycle.

5- Bank of England announces new climate risk policy

On December 3, the Bank of England’s Prudential Regulation Authority published Supervisory statement 5/25 that put forth updated expectations for firms’ climate risk management approaches. The statement outlines the operational and financial risks inherent to climate change and the transition to a net-zero economy, as well as strategies for a strategic management approach. Chapters include new guidelines for governance, risk management, climate scenario analysis, data and disclosures, as well as two sector-specific chapters for banking and insurance firms.

Firms are expected to conduct an internal review of their current status in meeting these expectations by June 2026, as well as to regularly update their risk assessments and climate actions. The new expectations underscore the role of financial institutions in incentivizing and facilitating climate action, not only as social responsibility, but as a long-term investment in resilience and sustainable growth.

- Content prepared with the help of Amanda Alden.

November 2025: EU lowers due diligence and sustainability reporting standards, COP30 updates, big tech and ESG compliance, phasing out PFAs, and more

Key highlights from November 2025 in the sustainability space.

1- European Parliament proposal lowers due diligence and sustainability reporting standards 
On November 13, the European Parliament adopted its negotiation position on the Omnibus Directive amending corporate sustainability reporting and due diligence rules. The proposal raises reporting thresholds to companies with more than 1,750 employees and €450 million in annual turnover, and limits due diligence obligations to firms with over 5,000 employees and €1.5 billion in turnover. 

Among the simplification measures, the revised rules would allow companies to prioritize which risks to assess based on the severity and likelihood of adverse impacts, while also relieving them of the obligation to obtain information directly from business partners across their value chains, permitting reliance on publicly available information. In addition, certain provisions of Directive (EU) 2024/1760 on climate transition would be deferred until 2028 while the Commission develops new due diligence guidelines. 

Negotiations between the European Parliament, the Council, and the European Commission began on 18 November 2025, with the objective of adopting a final text by the end of the year. On the same day, in the spirit of simplification and increasing business competitiveness, expansion and investment, the Parliament also adopted a resolution supporting the BEFIT initiative to harmonise corporate tax rules, citing competitiveness, legal certainty and reduced compliance costs.

The move towards deregulation comes on the heels of trade negotiations with the Trump Administration who has pushed to reduce the burden of the CSRD and CSDDD on U.S. firms. Together, these measures signal a shift towards regulatory simplification and competitiveness, potentially at the cost of sustainability and ESG standards.

2- Federal appeals court enjoins Senate Bill 261 
On November 18, the Ninth Circuit Court of Appeals granted an injunction pending appeal of California's Senate Bill 261, requiring certain companies to disclose climate risks, while staying Senate Bill 253, requiring companies to disclose greenhouse gas emissions.

The plaintiffs, who challenged the legislation on grounds of First Amendment, extraterritoriality and federal preemption, included the U.S. and California Chambers of Commerce. Yet the Ninth Circuit did not limit injunction to members of the plaintiff organisations, effectively suspending enforcement for all covered companies until the appeal is heard in January 2026. 

Meanwhile, delays in the developing regulations for SB 253, particularly those clarifying revenue thresholds and disclosure requirements, have added to regulatory uncertainty for affected companies. This injunction and pending appeals against both statutes risk undermining California's efforts to counterbalance the deregulatory momentum and rollback of climate policies pursued by the Trump administration.

3- COP30 concludes on renewed pledges but no consensus 
From 17 to 22 November, over 60,000 delegates convened in Belém for the COP30 to assess progress on climate mitigation, adaptation and finance. The final decision calls on public and private actors to increase climate finance to at least 1.3 trillion USD annually by 2035, particularly with respect to mitigation and adaptation for developing countries. 

While no consensus was reached on energy transition, several EU countries including Austria, Belgium, Denmark, the Netherlands and Spain signed the Declaration on the Transition Away from Fossil Fuels, and will participate in the first international conference dedicated to fossil fuels in April 2026. Negotiations also focused on contention related to the EU Carbon Border Adjustment Mechanisms and the Deforestation Regulation, signaling potential changes in the regulatory landscape and carbon pricing mechanisms. 

With few binding commitments and no new technical guidance, COP30 confirms a trend of uneven climate transition, led by coalitions of willing states rather than a unified global framework. Fragmented global governance further underscores the relevance of private finance and market-based instruments in driving climate action. 

4- U.S. Attorney Generals warn big tech against ESG compliance 
A coalition of sixteen U.S. state attorneys general has issued formal warnings to Microsoft, Google, and Meta, cautioning against compliance with EU sustainability reporting and due diligence rules on the grounds that adherence could violate domestic legal standards.

The letters accuse the EU of attempting to impose compliance with the Paris Agreement and specifically criticize existing DEI or sustainability initiatives, including Meta’s and Google’s ESG disclosure programs. 

This development underscores the growing compliance dilemma facing multinationals based in the US, which must balance adherence to international sustainability standards against the risk of domestic legal and political backlash, while also managing potential scrutiny from EU regulators in cases of curtailed reporting. 

5- Child rights advocates call for stronger safeguards in African trade integration
Following the release of a  multinational study  on child rights mainstreaming in Africa, the Institute for Human Rights and Development in Africa (IHRDA) urged governments to address child labour and harmful industrial practices as negotiations around the African Continental Free Trade Area (AfCFTA) advance. 

The statement highlights the ongoing lead-poisoning crisis in Kabwe, Zambia, which has affected over 95% of children living and working near former mines, a crisis reflecting not only unsafe environmental practices, but a critical lack of governmental oversight. With the informal sector accounting for over 80% of employment in certain countries, the lack of compliance oversight as well as low entry barriers render youth particularly vulnerable to exploitative practices. Advocates warn that without a robust, enforceable mechanism for child rights at the continental level, deregulated cross-border trade would leave women and children further exposed to exploitation, trafficking and harassment. 

6- Chemical companies move to eliminate PFAS 
BASF, the world's largest chemicals group, has pledged to phase out per- and polyfluoroalkyl substances (PFAS) by 2028, joining a list of major companies renouncing highly persistent "forever chemicals." Citing the need to maintain high safety and environmental standards, the German conglomerate will phase out products formulated with PFAS and substitute with safer alternatives.

This move responds to growing concern among investors concerned about regulatory tightening, compliance obligations and potential litigation exposure, in addition to the impact on ecosystems and public health. According to the ChemSec press release, one third of the world's top 40 chemical companies have indicated they are willing to phase out, reduce or avoid persistent chemicals. 

- Content prepared with the help of Amanda Alden.

October 2025: EU delays CSRD reporting for non-EU companies, French court delivers greenwashing judgment against TotalEnergies, ExxonMobil sues California over climate disclosure laws, and More

Key highlights from October 2025 in the sustainability space.

1- EU Delays CSRD Reporting for Non-EU Companies

On October 6, The European Commission postponed sustainability reporting standards for non-EU companies under the Corporate Sustainability Reporting Directive (CSRD) until at least October 2027, as part of its broader simplification agenda to ease regulatory burdens. This is part of a larger move deprioritising over 100 “non-essential” regulatory and implementing standards, including standards for listed SMEs (which will fall outside the scope of CSRD under the Omnibus I proposal) or non-EU companies (to be adopted by June 2026 with reporting starting in 2029), and a triennial review of the first non-sector-specific ESRS.

While offering short-term relief to companies, the delay prolongs uncertainty around existing and upcoming sustainability standards. 

2- French Court Finds TotalEnergies Misled Consumers on Climate Claims

In a landmark decision on October 23, a Paris civil court held that TotalEnergies misled consumers with claims about its role in the energy transition. The court found that the company’s claims of achieving carbon neutrality by 2050 and being “a major actor in the energy transition” amounted to misleading commercial practices. 

Other claims, relating to TotalEnergies communications about biofuels and gas being cleaner than other fossil fuels, were dismissed on the grounds that they were not linked to the promotion, sale or provision of energy to consumers. The penalty was relatively modest, with the court ordering TotalEnergies to cease using the contested language, publish the judgment on its website for six months, and pay compensation to the claimants. 

Brought by Greenpeace, Friends of the Earth France, and Notre Affaire à Tous, the case marks the first successful greenwashing action against a major oil company in France. Activists hailed the ruling as a turning point for climate accountability, reinforcing the idea that corporate communications must reflect scientific reality rather than marketing narratives. While the company noted that most of the plaintiffs’ demands were dismissed, the decision signals growing judicial scrutiny of ESG-related claims across Europe.

3- Updates on Net-Zero Financial Alliances 

On October 3, the Net-Zero Banking Alliance (NZBA) ceased operations following the wave of high-profile exits on both sides of the Atlantic. Members voted to transition from a membership-based coalition to a guidance framework for climate target setting, citing growing legal and political challenges in the U.S. The banks have stated they will continue assessing climate risks on an individual basis, and the NZBA’s guidance is still available to banks. 

On the other hand, on October 29, the Net-Zero Asset Managers (NZAM) initiative announced its return after a temporary suspension, unveiling a revised commitment structure that removes references to its previous 2050 net zero target. The suspension had followed several member withdrawals amid scrutiny from U.S. lawmakers mirroring the pressures that led to NZBA’s dissolution. 

The divergent approaches reflect a strategic divide in the financial sector’s efforts to uphold climate ambitions amid intensifying opposition to ESG.

4- California delays climate disclosure regulations 

On October 15, the California Air Resources Board announced a delay in the rulemaking process for its climate disclosure laws, SB 253 and SB 261, moving the expected date for the presentation of implementing regulations to early 2026. We had previously reported here that these had been expected to be finalised before the end of 2025. 

The postponement follows extensive public feedback and challenges in defining covered entities, though reporting timelines remain unchanged. The first climate risk report under SB 261 is due January 1, 2026, while the first GHG emissions report for Scopes 1 and 2 under SB 253 is due in June 2026. 

5- ExxonMobil sues California over climate disclosure laws

On October 24, ExxonMobil filed a federal lawsuit seeking to block California’s climate disclosure laws on the basis of its First Amendment rights. Exxon is urging the court to grant an injunction to prevent the laws from coming into force in 2026 as mentioned above. 

Exxon claims the rules compel ideological speech by forcing companies to adopt frameworks such as the GHG Protocol and Task Force on Climate-related Financial Disclosures, which it says misrepresent emissions and require speculation on climate risks. While the laws have already survived an injunction request under the First Amendment in August 2025, that case is now proceeding to trial. The resilience of the laws are thus being tested on multiple fronts. Their fate will provide an indication of the future of climate disclosure laws in the US. 

- Content prepared with the help of Defne Fresko Tasci.