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.