Horizon - ESG Regulatory News and Trends

Trump Administration actions

US formally submits notification of withdrawal from Paris Agreement. On January 27, 2025, Dorothy Camille Shea, the US acting ambassador to the United Nations, submitted a notification of withdrawal from the Paris Agreement to the UN. That withdrawal, made pursuant to this Executive Order, will become effective on January 27, 2026. Notably, while this action is expected to have a chilling effect on the private sector and actions in some other countries, the notification of withdrawal is limited to the Paris Agreement. At this point, other US commitments to the United Nations Framework Convention on Climate Change remain intact.

Net zero is a “sinister goal,” says US Energy Secretary. Speaking via video link at the Alliance for Responsible Citizenship forum in London on February 17, US Energy Secretary Chris Wright stated, “Net zero 2050 is a sinister goal, it’s a terrible goal” that is “unachievable by any practical means.” Wright continued, “The aggressive pursuit of it – and you’re sitting in a country that has aggressively pursued this goal – has not delivered any benefits, but it’s delivered tremendous costs.” In his remarks, Wright also said that climate action is part of a plot to “grow government power” and “shrink human freedom” and that the dangers of extreme weather are “stories” used for “scaring the children.” “This is not energy transition,” he stated, “This is lunacy. This is impoverishing your own citizens in a delusion.” Wright went on to state that as Energy Secretary he would “get out of the way” of coal, oil, and gas companies and work to “increase the supply of affordable, reliable energy” from hydrocarbons. On February 14, Wright granted the Trump Administration’s first approval of a liquefied natural gas export project, the Commonwealth LNG export terminal, with, Wright said, “many more in the queue.” Before becoming Energy Secretary, Wright was CEO of the hydraulic fracturing services company Liberty Energy and a director of the Western Energy Alliance.

Zeldin recommends striking down the endangerment finding. EPA Administrator Lee Zeldin has reportedly recommended to the White House that the 2009 endangerment finding – which concluded that greenhouse gas emissions are pollutants that endanger the public’s health and welfare – be struck down. The finding, first reported on February 26, is the foundation of the federal government’s work to combat climate change. It paved the way for regulation of GHGs under the Clean Air Act – affecting, for instance, emissions from power plants and vehicles. At this writing, Zeldin’s recommendation has not been made public.

Updates on the Trump Administration’s environmental policy changes. The first month of President Donald Trump’s second term has seen a flurry of Executive Orders impacting a swath of agencies, departments, and legislation. The environmental sector has been a particular focus of these actions. In this alert, we provide an overview of key activities that are set to impact the environmental regulatory landscape, such as US EPA Administrator Lee Zeldin’s agenda for the first 100 days and beyond, a plan called the Five Pillars.

Court issues preliminary injunction against DEI-related Executive Orders. On February 21, the US District Court for the District of Maryland issued a preliminary injunction enjoining the federal government from enforcing certain provisions of President Donald Trump’s January 20, 2025 Executive Orders 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing” and 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EOs). The court found that the plaintiffs - the National Association of Diversity Officers in Higher Education, American Association of University Professors, Restaurant Opportunities Centers United, and the Mayor and City Council of Baltimore - are likely to succeed on the merits that the EOs are unconstitutionally vague and violate First Amendment free speech rights, and that they will suffer irreparable harm. See our alert. In addition, this alert provides background on the Administration’s DEI-related EOs.

Court orders Administration to immediately restore withheld funds appropriated by Congress. Finding that the Trump Administration has continued to freeze some federal funds despite a temporary restraining order (TRO), the US District Court for the District of Rhode Island has ordered the Trump Administration to immediately restore monies it has withheld that were appropriated by Congress under the Inflation Reduction Act and Infrastructure Improvement and Jobs Act, as well as other federal funds. The order enforces the court’s January 31 TRO addressing the funding freeze. At this writing, the Administration has ignored that TRO and filed an appeal of it, leaving billions in federal grants and aid inaccessible. The court stated, “The broad categorical and sweeping freeze of federal funds is, as the Court found, likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country. These pauses in funding violate the plain text of the TRO.” This case was brought by 23 Democratic state attorneys general.

How IRA and BIL grantees may prepare for termination of the Green New Deal. The federal government has been actively reviewing, suspending, and terminating certain contracts and grants that are not aligned with the Trump Administration’s policy goals. Recipients of energy and infrastructure grants under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act, also referred to as the Bipartisan Infrastructure Law (BIL), may soon see similar suspension and termination actions. Our alert discusses the EO directing federal agencies to take such action, as well as the steps that recipients of IRA and BIL grants may consider taking in the interim.

New Trump Administration tariffs on Canada, Mexico, and China. On February 1, President Trump signed three EOs instituting sweeping new tariffs on all goods imported from Canada, Mexico, and China. The tariffs were enacted pursuant to the International Emergency Economic Powers Act, based on his determination that illegal immigration and drug trafficking, particularly fentanyl, constitute an extraordinary threat and national emergency under the National Emergencies Act. The EOs impose an additional 25-percent duty on all imports from Mexico, an additional 25-percent duty on all imports from Canada – except energy and energy resources from Canada, which will be subject to a lower 10-percent additional duty – and an additional 10-percent duty on all imports from China. These tariffs were slated to take effect February 4, 2025 and to continue indefinitely; however, on February 3, 2025, the Trump Administration announced it would delay the imposition of tariffs on Mexico and Canada for one month. See our alert  as well as our recent coverage of Canada’s response to US tariffs on Canadian food products.

SEC leadership of Trump Administration rescinds Biden-era SEC guidance on ESG-related stockholder proposals. The new Staff Legal Bulletin 14M (SLB 14M), published February 12, 2025, rescinds SEC’s Biden-era November 2021 Staff Legal Bulletin 14L, which limited a company’s ability to exclude ESG-related stockholder proposals (those with “broad societal impact”) from proxy statements. New SLB 14M reinstates pre-November 2021 SEC guidance on the scope of the “economic relevance” and “ordinary business” exclusions under Exchange Act Rule 14a-8. Under the reinstated guidance of SLB 14M, companies receiving ESG-related Rule 14a-8 shareholder proposals have a better chance of successfully obtaining no action relief permitting the company to exclude these proposals from inclusion in the proxy statement. Learn more by contacting Era Anagnosti.

Visit our hub. For updates on breaking developments, see our hub, Navigating the presidential transition: Legal and regulatory insights.

Disclosures and voluntary reporting

US states move to introduce climate disclosure bills. A number of US states are moving to fill the regulatory gaps left by the federal government’s rapid move away from climate and environmental regulation. Legislators in Colorado (HB 25-1119), Illinois (HB 3673), Maine (LR 1853), New Jersey (S 4117), and New York (S 3456 and A 4282) have proposed legislation in their states that is highly similar to California’s pair of climate disclosure laws. Generally, these climate disclosure bills affect companies that do business in their states and have total revenues in excess of $1 billion in the preceding fiscal year, and all would require reporting entities to annually disclose all Scope 1, 2, and 3 emissions. Should any of these measures be enacted, affected businesses that already report to California will likely not find their compliance burden appreciably greater.

The two measures reintroduced in the New York senate are SB 3456, the Climate Corporate Data Accountability Act, and SB 3697, on climate-related financial risk reporting. Under SB 3456, the first reports, for Scope 1 and 2 emissions data, would be submitted in 2027 for the prior fiscal year, and the first reports for Scope 3 emissions data would be required in 2028. Under SB 3697, a covered entity would be required to prepare a report disclosing its climate-related financial risk, as well as the steps it has taken to reduce that risk. Reporting requirements would be satisfied by a publicly accessible report that includes climate-related financial risk disclosure information pursuant to a consistent law, regulation, or listing requirement, such as the IFRS Foundation Sustainability Disclosure Standards. All these measures are in the earliest legislative stages.

State-level “anti-ESG bills” to be considered in the next legislative session. To date, a number of “anti-ESG” bills – which would restrict the consideration of environmental, social, and governance factors in state investments – have been introduced for consideration in the upcoming legislative sessions. In New Hampshire, JD Bernardy (R- Rockingham 36) introduced HCR 9, which urges the United States to reject compliance with the EU’s CSDDD. In Minnesota (S 851), lawmakers have introduced legislation to prohibit the state from investing in companies that boycott certain industries, such as energy production, mining, agriculture, or lumber. In Montana (D 2864), lawmakers are drafting legislation regarding the use of ESG “credit scores.”

European Commission announces Omnibus I, proposing significant rollbacks to sustainability reporting requirements. On February 26, the European Commission (EC) announced Omnibus I, a set of proposed “simplification measures” that would roll back key reporting requirements of the Green New Deal – the Corporate Sustainability Reporting Directive (CSRD); the Corporate Sustainability Due Diligence Directive (CSDDD); the EU Green Taxonomy, and the Carbon Border Adjustment Mechanism. The EC calls the proposal “a major step forward” that aims “to simplify EU rules, boost competitiveness, and unlock additional investment capacity,” and it estimates the changes would save €6.3 billion in administrative costs while mobilizing €50 billion in investment capacity. Under the proposal, CSRD and Taxonomy reporting would be delayed by two years. Only the largest companies, defined as those which have 1,0000 employees (up from 250) and at least €50 million in turnover or a balance sheet of more than €25 million in assets, would be required to report – dramatically cutting the number of affected businesses. Among other changes, the proposal contains significant cutbacks to supply chain reporting requirements; would make operating expenditures (OpEx) reporting under the EU Taxonomy voluntary for in-scope undertakings that generate less than €450 million in turnover; and would exempt around 90 percent of importers from the Carbon Border Adjustment Mechanism. Next, Omnibus I heads to the European Parliament and the Council of the EU for the legislative negotiation process.

Phase 1 Reporting for Canada’s Federal Plastics Registry is due September 2025. Canada’s plan to move toward the goal of zero plastic waste by 2030 includes the establishment of the Federal Plastics Registry. In April 2024, the Notice with respect to reporting of plastic resins and certain plastic products for the Federal Plastics Registry for 2024, 2025 and 2026 was given pursuant to s. 46(1) of the Canadian Environmental Protection Act, 1999. The information from the Notice is intended to populate the Federal Plastics Registry database and will inform Canada’s extended producer responsibility policy, improving waste reduction and recycling activities by extending a producer’s physical and financial responsibility. Information relating to the 2024 calendar year is due no later than September 29, 2025. Information relating to the 2025 and 2026 calendar years will be due no later than September 29 in 2026 and 2027, respectively. Schedule 3 to the Notice describes the criteria for reporting. Many entities will have requirements for reporting, including certain manufacturers, importers, those who place plastic resins, producers of plastic packaging or particular plastic products, generators of packaging and plastic waste at their facilities, and service providers who manage certain plastic products. Certain exemptions from reporting apply. Going forward, we will provide further information about Plastics Registry compliance for those entities doing business in Canada. Find out more about the Federal Plastics Registry reporting requirements and what compliance means for your business by contacting Amy Pressman.

Most countries have missed UNFCC’s reporting deadline for Nationally Determined Contributions. NDCs – Nationally Determined Contributions – are the building blocks of the Paris Agreement; they are important to businesses as guidelines to help them understand the climate action goals of the countries where they operate. February 10 was the deadline for countries worldwide to report their 2035 Nationally Determined Contributions (NDCs) to the UN Framework Convention on Climate Change (UNFCCC), in which they would pledge their intended climate actions through 2035. At this writing, only 16 of the 195 countries that are signatories to the Paris Agreement have submitted their 2035 NDCs: Andorra, Brazil, Canada, Ecuador, Japan, the Marshall Islands, Montenegro, New Zealand, Saint Lucia, Singapore, Switzerland, United Arab Emirates, United Kingdom, United States, Uruguay, and Zimbabwe. (See our coverage of the US and UAE NDCs in our January issue.) On February 12, the European Commission confirmed that it will propose a joint EU target of 90 percent emissions reductions from 1990 levels by 2040. That target will also be used to determine its NDC. China has not confirmed when its climate plan will be released.

This is the third round of NDCs, with expectations for tougher standards that address the Paris Agreement’s requirement that they "represent a progression over time." UNFCC Executive Secretary Simon Stiell described the 2025 NDCs as “among the most important policy documents governments will produce this century,” adding that “taking a bit more time to ensure these plans are first rate makes sense.” Countries have until September to submit their NDCs for inclusion in the UNFCC’s assessment of the Paris Agreement’s progress. Stiell also pointed to the UK’s ambitious plan, with a 2035 emissions reduction goal of 81 percent below 1990 levels, as a model for the world.

Latest guide from IFRS Foundation addresses reporting only climate-related disclosures. On January 31, the IFRS Foundation released its latest guide, Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2, to explain how entities may apply its inaugural standards set out in IFRS S2 when reporting only climate-related information. The guide, issued in response to investors’ calls for consistent, globally comparable information, was crafted for businesses that are using the temporary relief that allows them to disclose only information on climate-related risks and opportunities in the first annual IFRS S1 reporting period. See the guide here.

The Taskforce on Nature-related Financial Disclosures (TNFD) publishes final sector guidance. On January 23, 2025, the TNFD released a second tranche of sector guidance to support the assessment, management and disclosure of nature-related by companies globally. Final sector guidance has been released for apparel, textile, and footwear, beverages, construction materials and engineering, construction and real estate. The TNFC is a market-led, science-based, government-backed initiative whose goal, its website states, is to “provide decision makers in business and capital markets with better quality information through corporate reporting on nature that improves enterprise and portfolio risk management.”

Greenwashing

Navigating greenwashing claims: trends shaping 2025 litigation risks. Greenwashing class action claims continue to rise in the US and internationally, with increased threats across industries ranging from consumer goods to financial services. Our January 29 webinar explored such litigation claims and discussed DLA Piper’s Greenwashing Litigation Tracker. For those interested in receiving information regarding the presentation, please reach out to Carolyn Hennessey.

IAASB guidance for auditors on assessing ESG claims, avoiding greenwashing. The International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) have issued new guidance for international auditors on assessing firms' ESG claims. The tighter rules are part of wider efforts to increase rigor and improve transparency in such financial reporting. The guidance, ESBA Chair Gabriela Figueiredo Dias said, aims to help ensure trust in disclosures and to provide clarity for auditors as they “approach many dilemmas, decisions and judgments” - for instance, how to respond when pressured to manipulate information and how to avoid greenwashing such information. The new standards are set out the IAASB's International Standard on Sustainability Assurance 5000 and IESBA's International Ethics Standards for Sustainability Assurance. IESBA's guidelines for financial reporting are already reflected by about 130 countries, and it is likely these new sustainability guidelines will also be widely adopted.

Climate change: Regulatory

Acting SEC Chair Uyeda calls Climate Rule “deeply flawed.” On February 11, Mark Uyeda, acting chair of the SEC, asked the US Court of Appeals for the Eighth Circuit not to schedule any oral arguments in State of Iowa v. SEC, consolidated litigation seeking to overturn the SEC’s Climate Disclosure Rule, until he has had time “to deliberate and determine the appropriate next steps” the SEC may take in the case. In his statement, Uyeda called the Rule “deeply flawed” and said it “could inflict significant harm on the capital markets and our economy.” The briefs the agency had previously submitted to the court “do not reflect my views” or changing circumstances in the federal government and the agency. After quickly summing up his past opposition to the rule, he stated, “I continue to question the statutory authority of the Commission to adopt the Rule, the need for the Rule, and the evaluation of costs and benefits.” Of those factors, the most weighty, Uyeda said, is “the lack of statutory authority.” Going forward, the SEC will provide a “status report” to the court “no later than 45 days from the date of this letter” and, Uyeda concluded, “will promptly notify the Court of its determination about its positions in the litigation.” The Climate Disclosure Rule faces an uncertain future, and our alert examines the potential pathways by which the Administration may address the Rule.

Fashion Environmental Accountability Act introduced in California legislature. AB 405, the Fashion Environmental Accountability Act, has been introduced in the California legislature. The bill would mandate fashion brands and retailers selling in California with over $100 million in gross receipts to set and achieve climate targets in line with the Paris Agreement, including disclosing their carbon emissions, environmental impact, water use, and waste. Under the Act, fashion sellers would be required to publicly, annually disclose their scope 1 and scope 2 GHG emissions and their scope 3 GHG emissions, starting in 2027. Brands would also be required to submit an annual environmental due diligence report detailing risks, adverse impacts, and mitigation measures throughout its supply chain, with the first such report due in July 2027. That report must include wastewater and water usage information from any significant providers of dyeing, finishing, printing, and garment washing in the supply chain. Fashion sellers violating these provisions would be subject to civil penalties of up to 2% their annual revenue, to be deposited into a new state Fashion Environmental Remediation Fund. Exempt from AB 405 are retailers that sell used fashion goods; multibrand retailers, like department stores, would also be exempt unless the total annual gross receipts of all of their private labels exceed $100 million. AB 405 was introduced to the legislature on February 4 and at this writing is awaiting referral to its first policy committee. California has already addressed other aspects of sustainability in the fashion industry in its Responsible Textile Recovery Act, an extended producer responsibility law enacted in September 2024 to curb waste and encourage textile recovery and recycling.

Navigating EPR compliance: Register for our CLE webinar. State regulators across the country are implementing new extended producer responsibility (EPR) laws that place the onus of product life cycle management on producers, creating significant compliance challenges and opportunities. Key deadlines are rapidly approaching in Oregon, California, and Colorado – see our ESG calendar below for more information. We take a close look at these requirements and the implications of this evolving legal landscape in our Tuesday, March 4 CLE webinar, Navigating EPR compliance: Legal strategies for consumer goods, food, and retail companies. Register here.

Two states’ bills would create private course of action for those harmed by climate disasters. The legislatures in California and Illinois are each considering measures that would create a private course of action for those harmed by climate disasters. Each bill specifically points to the connection between climate change and fossil fuel products. Each would establish a legal mechanism for individuals, businesses, and associations who have suffered at least $10,000 in damages caused by climate disaster or extreme weather attributable to climate change to sue a responsible party. The Illinois Extreme Weather Recovery Act (HB 3594), introduced on February 17, defines a “responsible party” as an entity that emitted or caused to be emitted through the “extracting, storing, transporting, refining, importing, exporting, producing, manufacturing, distributing, compounding, marketing, or offering for wholesale or retail sale,” a product with total GHG emissions of at least 1 billion metric tons of CO2 equivalent during the covered period. California’s SB 222, introduced on January 27, would authorize individuals to bring a civil course of action “against a party responsible for a climate disaster or extreme weather or other events attributable to climate change due to the responsible partys [sic] misleading and deceptive practices or the provision of misinformation or disinformation about the connection between its fossil fuel products and climate change and extreme weather or other events attributable to climate change.”

EU lawmakers reach agreement that would extend mandatory EPRs to textiles, food waste. European Parliament and Council legislators on February 18 reached a provisional agreement on new measures to reduce and prevent waste in the textile and food sectors. Under the rules, which amend the EU’s Waste Framework Directive, fashion brands would pay for the collection and recycling of their products. Fees would be determined by the particular products’ sustainability and circularity. EU members are already required to establish extended producer responsibility (EPR) programs, which at present address electric and electronic equipment, packaging waste, and batteries. The new measure would require each EU country to establish an EPR program for fashion brands and textile manufacturers whose products – such as clothing, footwear, and home fabrics – are sold in that country. It also allows countries to create EPRs for mattresses. The amendments would also establish union-wide food waste targets; compared to 2021 – 2023 levels, the revisions aim to cut food processing and manufacturing waste by 10 percent and restaurant, retail, and household food waste by 30 percent.

Climate change: Litigation

District court dismisses two claims in Chamber of Commerce v. CARB, and business group plaintiffs seek to enjoin enforcement of SB 253 and SB 261. The US District Court for the Central District of California has dismissed two claims brought by the US Chamber of Commerce and other business groups in ongoing litigation targeting California’s landmark climate disclosure laws. On February 25, the plaintiffs requested a preliminary injunction based on the remaining claim, which alleges First Amendment violations. An injunction could stay enforcement of both laws, including next year’s emissions and climate risk reporting obligations, until that claim is resolved.

At the heart of Chamber of Commerce v. California Air Resource Board are SB 253 and SB 261, which require large companies that do business in California to disclose their GHG emissions and climate-related risks, respectively, starting in 2026. The Chamber alleged that the laws violate the First Amendment, are invalid extraterritorial regulations, and are preempted by the federal Clean Air Act. The litigation seeks to overturn both laws.

On February 5, the court granted California’s motion to dismiss the latter two claims. The court noted that SB 253 imposed no direct obligations on businesses but instead requires the California Air Resources Board to develop implementing regulations governing corporate GHG disclosures, and that these regulations that have not yet been issued. But the court went further, stating that “[i]t is not clear to the court that any possible regulations CARB issues would impermissibly burden interstate commerce or violate the Supremacy Clause.” The court deemed the matter not ripe for adjudication.

Regarding SB 261, the court said, “Plaintiffs allege that ‘California lacks the authority to regulate greenhouse-gas emissions outside of its own borders’ under the Clean Air Act and ‘principles of federalism inherent in the structure of’ the Constitution.” The court concluded that the law “imposes no liability for failure to reduce emissions; only for failure to disclose climate-related financial risk.” The court rejected the plaintiffs’ view that a disclosure regime intended to facilitate public pressure “is a de facto regulatory scheme subject to preemption.”

The plaintiffs’ remaining constitutional claim, that SB 253 and SB 261 violate the First Amendment by compelling speech on climate change, remains in play – the court earlier denied the plaintiffs summary judgment on it, finding a factual record was required to evaluate the merits. As the case enters discovery around that claim, the plaintiffs moved on February 25 for a preliminary injunction to prevent the state from enforcing both laws on the basis that reporting – which the plaintiffs argue constitutes unconstitutionally compelled speech – will be required before the litigation is resolved. The plaintiffs requested a hearing on the injunction on May 5, 2025.

Lawsuit filed against two states’ climate superfund laws. In January, the American Petroleum Institute and the US Chamber of Commerce filed suit in the US District Court for the District of Vermont seeking to overturn Vermont’s Act 122, the Climate Superfund Act. Enacted in May 2024, the Vermont measure was the first state-level climate superfund law in the US and, like New York’s (enacted in December), is based on the polluter-pays model found in the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the Superfund Law. Vermont’s policy view is that the law allows it “to recover financial damages from fossil fuel companies for the impacts of climate change to Vermont. Those funds would support climate adaption projects.” The plaintiffs charge that the Vermont law is preempted by the federal Clean Air Act, violates the Constitution’s dormant and Foreign Commerce Clauses as well as Eighth Amendment protections against excessive fines, and that the law would harm other states through higher energy costs: “Although Vermont would reap the benefits of millions of dollars to fund its preferred climate change adaptation projects, citizens of other States would receive no benefits, only costs.”

Then, on February 6, 22 Republican state attorneys general, led by West Virginia Attorney General JB McCuskey and joined by two energy trade groups, sued New York state to overturn its Climate Change Superfund Act. The law requires companies that are collectively responsible for the largest proportions of historical global GHG emissions to pay about $75 billion in 25 annual payments. McCuskey stated they sued “to ensure that these misguided policies, being forced from one state onto the entire nation, will not lead America into the doldrums of an energy crisis, allowing China, India and Russia to overtake our energy independence.” The plaintiffs believe New York is “usurp[ing] the federal government, who has the sole authority to regulate the emissions that are being targeted in the Superfund bill.” Whether such laws set emissions standards rather than seek damages for the consequences of past emissions is emerging as a key legal distinction in similar litigation elsewhere.

Both lawsuits are in their earliest stages. Find out more about them by contacting Jesse Medlong.

Supply chain integrity

Commerce secretary nominee says he may use “trade tools” to respond to the “unreasonable burdens” imposed by the CSDDD and EUDR. In remarks sent to the Senate Committee on Commerce, Science, and Transportation during his January confirmation hearings, Commerce secretary nominee Howard Lutnick stated that the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) “will impose significant costs on thousands of U.S. companies doing business in Europe.” Lutnick particularly focused on US exports of natural gas to the EU, stating, “U.S. exports of natural gas are keeping the heat on in Europe this winter because the regulatory structure there has caused companies to flee. Yet the EU is attempting to harm the competitive advantages of U.S. companies by forcing them to comply.” Lutnick expressed similar concerns about the EU’s Deforestation Regulation (EUDR), stating, “Upon confirmation, I will direct my staff to review the impact of the EUDR as part of the reports and reviews the Department will conduct pursuant to the President Trump’s America First Trade Policy Presidential Memorandum” and noting that the Department of Commerce will engage with the US forest products industry about problems posed by the EUDR. Lutnick concluded by asserting, that under his leadership of Commerce, “I will consider using all available trade tools at the Department’s disposal, as appropriate, to respond to any actions by foreign governments, including the EU, that harm the American economy and impose unreasonable burdens on our companies.” Also of note: when asked during his confirmation hearings if he would support recommendations to break up the National Oceanic and Atmospheric Administration, Lutnick stated, “No.” He also stated that he would oppose attempts to move certain NOAA functions to other departments. On February 5, the Senate Commerce Committee voted 16-12 to advance Lutnick’s nomination. At this writing, he has not been confirmed.

ICC issues Policy on Slavery Crimes. The International Criminal Court’s (ICC) Office of the Prosecutor has issued a landmark Policy on Slavery Crimes setting out clear guidance on the prosecution of modern slavery crimes under the Rome Statute, the treaty that established the ICC and the legal framework for prosecuting international crimes. The policy was designed to work together with other Rome Statute policies, such as the 2023 Policy on Children. The ICC states that the policy “contributes to the progressive development of the international jurisprudence and best practices regarding accountability, redress and non-repetition of slavery crimes.” Under the Rome Statute, the ICC can only investigate and prosecute international crimes when a signatory is "unable" or "unwilling" to do so itself. Currently, 125 countries are signatories to the Rome Statute. Read the policy here.

ESG in financial services

When could shareholder engagement on matters, including ESG, trigger Schedule 13D filing? New guidance from SEC. On February 11, the SEC issued a revision of the Exchange Act’s Question 103.11 and published a new Question 103.12 in its Compliance and Disclosure Interpretations on Section 13(d) and Section 13(g) of the Exchange Act. The changes explain when investors engaging with issuers, including on ESG matters, may file a short-form Schedule 13G, as a passive or institutional investor, rather than a long-form Schedule 13D, used when an investor intends to potentially influence or exert control over the company. The new guidance states that “a shareholder who discusses with management its views on a particular topic and how its views may inform its voting decisions, without more, would not be disqualified from reporting on a Schedule 13G.” However, Schedule 13G may not be available for a shareholder who then “exerts pressure on management to implement specific measures or changes to a policy” that “may be ‘influencing’ control over the issuer.”

California Legislative Analysis Office releases report on Prop 4 climate bond spending plan. California Governor Gavin Newsom’s plan to distribute climate bond funds from Proposition 4 has merit but should include more legislative oversight, the state Legislative Analysis Office said in its report on the plan, released on February 12. Proposition 4 is a $10 billion bond measure passed by voters in November 2024 that aims to increase California’s resilience to the impacts of climate change. The LAO praised the Proposition 4 Spending Plan for striking a balance “between quick distribution of funds and thoughtful implementation of programs.” However, while the plan’s multiyear approach offers many benefits, it also brings tradeoffs, the LAO stated: a coordinated, strategic approach and funding certainty on the one hand versus potential procedural burdens should future legislatures want to modify the plan. The LAO’s report concludes with a set of recommendations to the legislature as it considers the spending plan, stating, “While the overall approach the Governor proposes appears sound, the Legislature may want to consider providing statutory guidance on how these new programs should be administered, particularly if it had certain components in mind when drafting the bond. Adding statutory guidance now would ensure that these new programs are implemented in a way that aligns with legislative priorities and policy objectives. “

North Carolina considers prohibiting ESG-based “financial discrimination” against farmers. The North Carolina legislature is considering HB 62, the Farmers Protection Act, which would prohibit financial discrimination based on ESG investment policies. HB 62 would make it “unlawful for a bank to deny or cancel its service to an agriculture producer based, in whole or in part, upon the agriculture producer’s greenhouse gas emissions, use of fossil-fuel derived fertilizer, or use of fossil-fuel powered machinery.” The bill states, “If a bank has made any ESG commitment related to agriculture, there is a rebuttable presumption that the bank's denial or restriction of a service to an agriculture producer violates” the law. HB 62 also would require banks, annually by January 1, to “attest, under penalty of perjury,” that they are in compliance. Agriculture is North Carolina’s leading industry. Agriculture is North Carolina’s leading industry.

ESG in the marketplace

Proposal to limit NYC building owners’ use of renewable energy credits to meet LL 97 requirements. Two members of the New York City Council say that this month they will introduce legislation aiming to tighten decarbonization rules for owners of city properties. The largest emitters of GHGs in New York City are its buildings, which release more than two-thirds of the city’s emissions. New York City’s Local Law 97 of 2019, which went into effect in 2024, addresses this, placing carbon emissions limits on most city buildings over 25,000 SF. The carbon caps become tighter over time; by 2050, all covered New York City buildings will be required to meet zero emissions requirements. LL97 allows property owners to meet annual carbon limits in various ways – for instance, by adding more efficient lighting, improving a building’s insulation, or installing heat pumps. It also allows building owners to offset their emissions by purchasing renewable energy credits. Legislation slated to be introduced this month would amend LL 97 to restrict the purchase of renewable energy credits to no more than 10 percent of a building’s excess emissions. Councilwoman Carmen De La Rosa, one of the sponsors of the measure, stated, “You should not have a buyout of the requirements of Local Law 97.” Christopher Santarelli, a spokesperson for the Reat Estate Board of New York, said the proposed limits would be economically damaging and would “disincentivize support for efforts to decarbonize our built environment.”

Report: Most CEOs intend to move forward with sustainability and climate reporting strategies. A study from business data solutions provider Workiva concludes that the vast majority of companies intend to move forward with their sustainability and climate reporting strategies, even in the face of changing regulatory requirements. The report, Executive Benchmark on Integrated Reporting 2025, surveyed more than 1,600 C-suite executives and vice presidents at companies with more than $250 million in revenue across North America, South America, Europe, and Asia, as well as 222 institutional investors with more than $250 million in assets under management. The researchers found that, regardless of political changes within their countries, fully 85 percent of the surveyed executives said they intend to move forward with their existing plans to disclose GHG emissions; 77 percent said their approach to sustainability reporting remains unchanged. Interestingly, among executives whose companies are not subject to the EU's CSRD reporting requirements, 75 percent stated they will at least partially align their company’s reporting with its requirements. Among companies that would have been subject to the SEC's Climate Rule, 81 percent of executives said they plan to at least partially disclose Scope 1 and 2 emissions. Workiva also found that almost all the business leaders (97 percent) say a strong sustainability reporting program will confer them with a competitive advantage in the near term, and the same percentage said that integrating sustainability factors into their financial data helps them identify performance gaps and thus enhance opportunity. Read the survey here.

New Columbia program: MS in Climate Finance. Columbia University is introducing a new Master of Science program in climate finance – an interdisciplinary degree offered through the Columbia Climate School in collaboration with the Columbia Business School. The one-year program aims to train business professionals to apply climate knowledge to financial decision-making. The Columbia Climate School website states that the program addresses “a growing market need within banking, asset management, insurance, consulting, and other financial industries” as well as within “global multilateral institutions, intergovernmental organizations, and the public sector, all of which are mobilizing the trillions of dollars needed for climate mitigation and adaptation.” It is the first such degree program in the US.

Day-to-day corporate compliance in a time of federal deregulation. The federal pullback from environmental regulation “will have minimal impact on most corporate environmental activities and programs,” a prominent ESG information platform predicts. Writing for PracticalESG.com, technical environmental consultant Lawrence Heim observed, “Most environmental regulatory programs were delegated to state agencies decades ago,” and at least 48 US states have obtained “primacy” or “delegation” over federal environmental laws governing such areas as water quality, site remediation, and air emissions. While some programs, like the Toxic Substances Control Act, are still managed at the federal level, for the most part regulatory responsibility lies with individual states. Heim said, “While new federal environmental regulation development and enforcement of existing mandates may slow or retreat, day-to-day environmental compliance management won’t see much change.” Urging that companies remain vigilant, he concluded, “Even if there was an opening for companies to lift up off the compliance pedal, significant financial risks remain of third party lawsuits along with violations of previous settlements and financing covenants, contract terms and insurance coverage terms.”

ESG calendar

Key global reporting deadlines

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Coming events

• DLA Piper’s CLE webinar, Navigating EPR compliance: Legal strategies for consumer goods, food, and retail companies, takes place Tuesday, March 4. Register here.
• SF Climate Week will take place April 19-27 in San Francisco.
• The US Climate Action Summit will take place April 21-27 in Washington, DC.
• The 2025 UN Ocean Conference will be held June 9-13, 2025 in Nice.
• The 13th International Conference on Sustainable Development will take place September 10-11, 2025 in Rome.
• Climate Week NYC will take place September 21-28, 2025 in New York City.
• The 2025 United Nations Climate Change Conference (COP 30) will be held November 10-21, 2025 in Belém.