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.

September 2025: EU Court rules on nuclear and gas, EU Parliament revises waste framework, Chine unveils emissions reduction goal, and More

Key highlights from September 2025 in the sustainability space.

1- EU court rules nuclear and gas can be included in EU Taxonomy

On September 10, the EU’s General Court rejected Austria’s challenge to the European Commission’s decision to classify nuclear energy and fossil gas as potentially sustainable under the EU Taxonomy. The Court found that the Commission was “entitled to take the view” that both could, under specific conditions, contribute substantially to climate mitigation and adaptation objectives. It credited the argument that nuclear power produces near-zero greenhouse gas emissions and that low-carbon alternatives of comparable scale remain limited.

The ruling confirms the EU’s pragmatic stance on transition finance, recognizing the need for a gradual reduction in emissions while maintaining energy security. However, it has renewed debate over the taxonomy’s credibility, with critics warning that including fossil fuels and nuclear power could dilute its environmental integrity. An appeal may still be filed.

2- EU Parliament adopts waste framework revision

The European Parliament approved a revision of the EU Waste Framework Directive that creates new obligations for textile and food producers in the EU. The September 9 revision requires textile producers in the EU, including fashion brands and online retailers, to fund the collection, sorting and recycling of their products. The updated directive also introduces the EU’s first binding food waste reduction targets, requiring a 10% cut in food manufacturing and processing waste and a 30% reduction in waste from households, retail and hospitality by 2030.

The reform, initially introduced in 2023, is aimed at reducing the EU’s textile and food waste. Member states have 30 months to establish Extended Producer Responsibility (EPR) schemes, with microenterprises granted an extra year after their implementation to comply with the rules. The directive is now deemed adopted as the position was already agreed by Council this summer. 

3- China unveils first absolute emissions reduction goal 

On September 24, the Chinese government committed for the first time to an absolute emissions reduction target. China has thus undertaken to cut economy-wide emissions 7–10% from peak levels by 2035. President Xi Jinping announced the goal during a UN Climate Summit that marked the 10th anniversary of the Paris Agreement.

Accordingly, the world’s biggest emitter will expand wind and solar capacity to 3,600 gigawatts and increase the share of non-fossil fuels in total energy consumption to more than 30% in less than 10 years. The move signals Beijing’s intent to lead on climate diplomacy as the U.S. steps back from some environmental commitments, marking a notable milestone in global climate governance.

4- European pension fund pulls €14bn from Blackrock over ESG policy 

On September 3, PFZW, one of Europe’s largest pension funds, stopped investing in stock funds managed by BlackRock citing sustainability concerns. The withdrawn investment amounts to €14bn, and points to the widening gap between European asset managers and US counterparts on issues of sustainability strategy. 

BlackRock’s withdrawal from the Net Zero Asset Managers initiative and lower support for ESG resolutions have frustrated European clients, prompting funds like PFZW to seek managers better aligned with their sustainability priorities. While asset managers face a fragmented regulatory landscape on climate risk, the broader trajectory is clear: climate costs are mounting, and the energy transition is now part of the market’s foundation.

- Content prepared with the help of Defne Fresko Tasci.

August 2025: California climate disclosure rules on track for enforcement, South African court blocks offshore drilling, FTC ends antitrust probe and More

Key highlights from August 2025 in the sustainability space.

1- California’s Climate Disclosure Laws Clear Major Hurdle

On August 13, the U.S. Chamber of Commerce and other business groups lost their bid to pause enforcement of California’s landmark climate disclosure laws (SB 253 and SB 261). A federal judge ruled the plaintiffs had not shown their First Amendment challenge was likely to succeed. 

The ruling clears the way for mandatory reporting to begin in 2026, with the California Air Resources Board (CARB) on track to finalize regulations by the end of 2025. SB 253 will compel companies with over $1 billion in revenue to disclose their greenhouse gas emissions, while SB 261 will require firms generating at least $500 million to report on climate-related financial risks. Although appeals are expected, businesses cannot afford to wait. CARB has signalled initial enforcement may be measured, but California is decisively setting the pace on corporate climate accountability.  

2- German Court Calls Out Apple for “CO2-Neutral” Claims 

On August 26, a Frankfurt court ruled that Apple cannot market its Apple Watch as “CO2 neutral” in Germany. The judges found that Apple’s reliance on carbon offsets—leasing eucalyptus plantations in Paraguay until 2029—fell short of what consumers reasonably expect: climate neutrality lasting through at least 2050 in line with the Paris Agreement. The ruling frames Apple’s claim as greenwashing and raises broader doubts about the credibility of offset-based neutrality pledges.

The case mirrors a class-action lawsuit in the U.S. and comes as regulators in Europe prepare to tighten scrutiny through the revised Green Claims Directive, due in 2026.  Environmental groups, including Umwelthilfe, hailed the decision as a win against greenwashing. Yet, Apple’s approach in this case broadly aligns with prevailing carbon offset practices in the tech sector, raising a deeper question: whether dismantling offset strategies ultimately advances or undermines the path to long-term decarbonization.

3- South African court blocks offshore drilling over environmental risks

On August 14, South Africa’s Western Cape High Court overturned an environmental authorization that had been granted to TotalEnergies and Shell for offshore oil exploration along the country’s Cape coast. The court sided with civil society groups, finding that the project’s Environmental Impact Assessment had failed to address crucial risks, including the socio-economic fallout of potential oil spills on small-scale fishers and coastal communities, as well as the omission of climate change impacts, coastal protection requirements, and cross-border harms. The judges also criticized the lack of transparency, noting that emergency spill response plans had been withheld from public scrutiny.

TotalEnergies must now submit new studies, release contingency plans, and engage in additional consultation before drilling can even be reconsidered. For many observers, the judgment represents a major victory for communities whose livelihoods depend on the region’s marine resources, and it adds momentum to a broader movement resisting offshore oil and gas exploration in South African waters. By placing environmental justice and community voices at the center of the decision, the court strengthened the case for aligning energy development with both ecological protection and long-term climate goals.

4- FTC ends antitrust probe as truckmakers sue California

On August 12, the U.S. Federal Trade Commission (FTC) announced the closure of its investigation into Volvo, Daimler, International Motors and PACCAR over their 2023 “Clean Truck Partnership” with California’s Air Resources Board (CARB).

Regulators had raised concerns that the agreement to phase out internal combustion engines and accelerate the rollout of zero-emissions trucks could amount to collusion, restricting output and limiting competition. To resolve those concerns, the companies and their trade association pledged not to enforce the agreement against one another, committed to acting independently in the future, and accepted ongoing disclosure obligations to the FTC.

Yet, the resolution of the antitrust probe quickly  gave way to a new legal clash. The truckmakers have filed suit against CARB and Governor Gavin Newsom, arguing that California’s requirements place them in an impossible position by forcing compliance with state-level standards that may conflict with federal law. The case underscores the way litigation has become a central weapon in America’s climate and ESG battles: regulators view aggressive state rules as necessary to drive industry transformation, while companies increasingly turn to the courts to contest what they see as inconsistent or unlawful mandates.

- Content prepared with the help of Defne Fresko Tasci.

July 2025: ICJ rules on climate change, EU publishes voluntary sustainability reporting standard for SMEs, White House unveils AI Action plan and More

Key highlights from July 2025 in the sustainability space.

1- International Court of Justice rules on countries’ climate change obligations

On July 23, the International Court of Justice (ICJ) issued a landmark advisory opinion on the obligations of states regarding climate change, following a 2023 request by the UN General Assembly.

According to the opinion, all states have binding obligations under climate treaties, customary international law, other environmental conventions, and human rights law to prevent significant harm to the climate system. This includes duties to reduce greenhouse gas emissions, cooperate internationally, regulate private sector activities, and provide adaptation support. Even subsidising fossil fuel production could be considered in breach of these obligations, which are considered owed to the international community as a whole.

As such, countries can be held legally accountable for climate harms, potentially including historic emissions and fossil fuel subsidies. While this decision is purely advisory, it is expected to strengthen the legal foundation for climate accountability claims, leading to more climate-vulnerable nations pursuing compensation for climate-related damages from high emitting countries. 

2- EU Commission publishes voluntary sustainability reporting standard for SMEs

On July 30, the European Commission unveiled a voluntary sustainability reporting standard for small and medium-sized enterprises (SMEs), designed to ease their compliance burdens and improve their access to sustainable finance. The Voluntary SME Standard (VSME) is an interim measure that has been introduced ahead of a formal delegated act that will form part of the Omnibus I simplification package. 

Developed by EFRAG, the VSME is intended to help smaller companies respond to growing sustainability information requests from large corporates and financial institutions, while also supporting their own monitoring of sustainability performance and competitiveness. The Commission is encouraging larger entities to base their data requests on this framework wherever possible.

3- White House unveils AI Action Plan 

On July 23, the White House unveiled Winning the AI Race: America’s AI Action Plan in line with President Trump’s January 2025 executive order on Removing Barriers to American Leadership in AI.

The plan sets out more than 90 federal policy actions across three pillars: accelerating AI innovation, building American AI infrastructure, and leading in international AI diplomacy and security. The plan underscores an urgency to scale infrastructure, expand skilled AI-related trades, and set global standards that keep American technology at the forefront of the AI race.

In addition to its structural pillars, the AI Action Plan is said to be guided by the principles of “empowering American workers, ensuring ideological neutrality and protection against misuse.” Ensuring ideological neutrality in this context is intended to guarantee that only "unbiased" large language models considered free from "ideological dogmas such as DEI" and other "partisan or ideological judgments" are eligible for government use.

4- EFRAG launches live portal tracking ESRS implementation 

On July 23, EFRAG launched its “State of Play 2025” portal, providing the first comprehensive snapshot of early compliance with the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). 

Drawing on 656 sustainability statements issued between 1 January and 20 April 2025, the platform offers an interactive statistics dashboard, a full repository of reports, and an accompanying analysis of key trends. It finds that only 10% of companies identified all ten topical ESRS standards as material, with climate change, workforce, and governance being most frequently reported. 

5- PRI publishes framework on Sustainability Value Creation in private markets

On July 23, the Principles for Responsible Investment (PRI) published a guide aimed at helping investors use sustainability to drive financial outcomes in private markets. The guide is the result of a collaboration with Bain & Company and NYU Stern Center for Sustainable Business, which will continue beyond this initial publication through its second phase aimed at quantifying financial impact from sustainability initiatives for specific industries. 

The guide, which was developed with input from more than 400 investment organisations globally, underscores the opportunities for financial value creation through sustainability both at the investment firm and portfolio company levels. It provides practical approaches to sustainability integration, from key activities in strategy and fundraising to organisational enablers. This approach is instructive as it positions sustainability not just as a compliance exercise but as a course of competitive advantage in private markets. 

- Content prepared with the help of Defne Fresko Tasci.

June 2025: EU Green Claims Directive not withdrawn, UK Sustainability Reporting Standards, UN Oceans Conference highlights and More

Key highlights from June 2025 in the sustainability space.

1- The European Commission clarifies the Green Claims Directive is not withdrawn  

On June 20, reports emerged that the European Commission intended to withdraw the Green Claims Directive proposal following opposition from the European People’s Party (EPP). The EPP criticized the proposal for being overly complex and misaligned with the Commission’s broader agenda of regulatory simplification. This news broke just ahead of the scheduled trilogue discussions on June 23, which the Council subsequently cancelled. 

The announcement drew criticism from MEPs on the basis that the directive had already taken simplicity into account, especially as the Parliament had already agreed to a full exclusion of microenterprises from the Directive’s scope. Several political groups went as far as to threaten withdrawal of support for the Commission, warning that the move could jeopardize the institution’s legislative credibility.

In response to mounting criticism, the Commission clarified on June 30 that the proposal had not been formally withdrawn, but reiterated that its future hinges on the continued exclusion of microenterprises from its scope. Critics warned that the Commission’s handling of the matter sets a troubling precedent and could derail two years of progress toward greater consumer protection and recognition for truly sustainable businesses.  

2- UK releases draft Sustainability Reporting Standards

On June 25, the UK government released exposure drafts for the upcoming UK Sustainability Reporting Standards. The proposed standards (UK SRS) are modelled on the IFRS Sustainability Disclosure Standards. Published alongside consultations for mandatory transition plans and assurance of sustainability reporting, the drafts include UK-specific amendments such as a two-year “climate-first” relief period and a requirement for sustainability disclosures to be published in tandem with financial statements. The goal is to shape a reporting regime that is transparent, proportionate, and connected to existing financial reporting.

The consultations will remain open until September 17, 2025. The Government is seeking feedback not only on the proposed amendments in the UK SRS but also on the anticipated costs and benefits of adopting the UK SRS instead of current reporting practices. 

3- Progress made towards international ocean protection at UN Oceans Conference

The UN Oceans Conference in Nice, France, concluded on June 13 with a major breakthrough: enough nations pledged to ratify the High Seas Treaty for it to enter into force by September. The successful push was led by contributions from nations including French Polynesia, Colombia, and Samoa, while the US was notably absent from the conference. 

Earlier in the conference, on June 11, the European Commission announced the adoption of the European Ocean Pact. First agreed on June 5, the Pact commits the EU to restore 20% of marine ecosystems by 2030, including ambitious targets to halve both plastic and nutrient pollution. 

While civil society groups expressed concern over a potential disconnect between commitments and concrete implementation, the conference marked a clear step forward in global efforts to safeguard ocean health and biodiversity. 

4- German prosecutors drop greenwashing probe

On June 17, German prosecutors closed their criminal investigation into former DWS CEO Asoka Wöhrmann concerning greenwashing allegations around his time at Deutche Bank’s asset management arm. The allegations stemmed from a whistleblower complaint by the asset manager’s ex-sustainability chief, who accused DWS of overstating its ESG investments. The firm was fined €25 million by German authorities in April 2025. Regulators found that assertions such as being a “leader” in ESG investing and positioning ESG as an integral part of the firm’s “DNA” did not reflect actual practices. This follows a similar case in the United States, where the firm settled with the SEC in September 2023 for $25 million over comparable allegations.

Despite the broader enforcement actions, prosecutors opted not to pursue charges against former executive Asoka Wöhrmann. Citing his departure from the firm in 2022, lack of prior convictions, and current absence from financial sector roles, authorities closed the case without imposing penalties.

The decision highlights the ongoing challenge of establishing individual accountability in cases involving ESG misrepresentation.

5- Actors urge SAG-Producers Pension Plan to stop investing in fossil fuel companies

In a letter published on June 24, over 200 SAG-AFTRA members urged the SAG - Producers Pension Plan to divest over $100 million from fossil fuels. The pension fund manages over $5 billion and supports more than 65,000 participants.

The campaign, led by Stand.earth under the Retire Big Oil banner, calls for full divestment from fossil fuel companies and reinvestment of at least 10% of the pension into climate-safe, socially responsible funds within five years. The letter argues fossil fuels are financially underperforming and socially harmful, especially to communities of color, and that the fund should reflect the union’s values of justice, sustainability, and long-term security.

- Content prepared with the help of Defne Fresko Tasci.