August 2026: Federal Court invalidates New York’s Climate Change Superfund Act, SEC ends review of shareholder-proposal exclusions, and more

Key highlights from August 2026 in the sustainability space.

1- Federal Court invalidates New York’s Climate Change Superfund Act 

On August 31, the District Court for the Northern District of New York found New York’s Climate Change Superfund Act, which would have required major fossil fuel producers to contribute a total of $75 billion towards climate adaptation projects over 25 years, unconstitutional and declared that it cannot be used to impose liability on fossil fuel producers. 

The court found that the Act encroached on an area governed by federal law, conflicted with the Clean Air Act and, insofar as it imposed liability on foreign producers, interfered with the federal government’s foreign-affairs powers. It emphasised the need for a uniform national approach to matters affecting US energy and environmental policy.

The ruling removes a potentially significant source of liability for fossil fuel producers and may influence the pending challenge to Vermont’s Climate Superfund Act. It could also discourage other states from introducing similar climate-cost recovery regimes. 

New York Governer Kathy Hochul’s administration is considering its next steps in response to the judgment, including a potential appeal.

2- New Zealand Parliament blocks corporate climate claims under tort law

On August 18, the New Zealand Parliament passed legislation preventing companies from being held liable in tort for climate-related harm caused by greenhouse gas emissions. The Climate Change Response (Tort Liability) Amendment Act entered into force on August 24 and applies to both current and future proceedings.

The legislation prevents the continuation of a claim brought by Maori climate activist Mike Smith against six major energy and agricultural businesses alleging public nuisance, negligence and a duty to cease contributing to climate change. In 2024, the Supreme Court of New Zealand allowed the claims to proceed to trial without determining whether they would ultimately succeed. The Government’s legislative disclosure statement confirms that the 2026 legislation responds to that pending trial and overrides the effect of the Supreme Court’s decision not to strike out the claim. The Government argued that emissions should be addressed through national legislation and the New Zealand Emissions Trading Scheme rather than through company-specific litigation.

The reform substantially reduces climate-litigation exposure for businesses operating in New Zealand. It also sets a dangerous precedent as the NZ Parliament effectively intervened to end ongoing litigation, undermining the separation of powers and the independence of the NZ judiciary. 

3- SEC ends review of shareholder-proposal exclusions

On August 14, the US Securities and Exchange Commission announced that it would stop responding to companies’ requests for informal guidance on whether shareholder proposals may be excluded from proxy materials under Rule 14a-8 of the Securities Exchange Act of 1934. This rule enables eligible shareholders to require a company to include qualifying proposals in its proxy materials for consideration at a shareholders’ meeting. It also specifies the procedural and substantive grounds on which a company may exclude a proposal. 

Previously, companies could request a “no-action letter” indicating that SEC staff would not recommend enforcement action if a proposal were omitted. The SEC had already significantly restricted this process for the 2025–2026 proxy season but will now decline all such requests until further notice. Companies must nevertheless continue notifying the SEC when they intend to exclude a proposal.

The change may increase litigation and negotiation between companies and shareholders, particularly in relation to proposals concerning climate change, workforce matters and other ESG issues.

4- European Commission publishes CBAM implementation guidance 

On August 14, the European Commission published ten guidance documents to support non-EU operators applying the Carbon Border Adjustment Mechanism during its definitive phase. Further guidance concerning the verification of emissions and the accreditation of verifiers followed on August 24.

The documents explain how to calculate the emissions embedded in imported cement, fertilisers, hydrogen, iron and steel, aluminium and electricity. They are intended to help EU importers and non-EU producers use actual emissions data instead of Commission default values, which will generally result in a higher CBAM liability. Even though the legal obligation to surrender CBAM certificates principally rests with the EU declarant, incomplete or inadequately supported emissions data from a non-EU operator may increase the importer’s default emissions calculation, compliance costs and demands for contractual assurances. 

Companies importing covered goods should now establish processes for collecting and verifying emissions data from their suppliers. The first annual CBAM declarations, covering imports made during 2026, will be due in 2027.

5- London Stock Exchange revises Alternative Investment Market (AIM) corporate governance rules

On 5 August, the London Stock Exchange brought revised AIM Rules for Companies into immediate effect. The accompanying AIM Notice 64 explains the principal changes and their relationship to the Exchange’s earlier consultation.

The revisions remove the former requirement for an AIM company to state which recognised corporate-governance code its board has adopted and explain any departure from that code. In its place, Rule 26 requires more direct website disclosure concerning the company’s board composition, directors’ responsibilities, remuneration arrangements, risk management and internal controls, and engagement with shareholders.

The changes provide AIM companies with greater flexibility over how their governance arrangements are structured and described, but they maintain the need for meaningful governance disclosure. Boards should review their websites and governance statements against the new Rule 26 requirements rather than assuming that removal of the recognised-code requirement amounts to a general relaxation of oversight. The revised rules also make wider changes to admission requirements, transaction thresholds and capital-resources disclosures.

- Content prepared with the help of Defne Fresko Tasci.

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.