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.