[co-author: Semhal Gebrekirstos]
Welcome to Horizon, DLA Piper’s monthly bulletin reporting on late-breaking legislative and policy developments in ESG. Our aim is to scan the litigation, enforcement, and regulatory horizon to help inform business decisions.
Deadline alert
- California: Under SB 261, the Climate-Related Financial Risk Act, covered entities are required to post their first biennial climate-related financial risk report to CARB’s public docket by January 1, 2026. For SB 253, the Climate Corporate Data Accountability Act, CARB has proposed June 30, 2026 as the initial deadline for Scope 1 and 2 reporting.
- California: for SB 54, the Extended Producer Responsibility Law, register with the Circular Action Alliance (CAA) by September 5, 2025, and report data for covered material sold or distributed in California in 2023 to CAA by November 15, 2025.
- Canada: Phase 1 of reporting to the Federal Plastics Registry is due by September 29, 2025.
Please also see our ESG calendar for information about key reporting deadlines around the world.
Disclosures and voluntary reporting
Key points from CARB’s August 21 virtual public workshop on the California Corporate Greenhouse Gas Reporting Program. In 2023, California passed SB 253, requiring large companies doing business in California to annually disclose their GHG emissions, and SB 261, requiring disclosure of material climate-related financial risks. Reporting requirements under those laws begin in 2026. The August 21 California Air Resources Board (CARB) workshop on the proposed fee regulation and implementation guidance for both bills featured a regulatory update from CARB staff outlining key aspects of the proposed regulations governing upcoming climate disclosure requirements, followed by an extensive public comment session with participation from various stakeholders. CARB staff opened the workshop with an overview of the regulatory process and key requirements under both measures, emphasizing that for the initial reporting cycle, good faith efforts and use of best available data will be accepted. Regarding potential fee structures, CARB is proposing a flat annual fee for each covered entity of $3,106 under SB 253 and $1,403 for SB 261. Entities subject to both laws pay both fees.
The public comment period was highly active, with over 90 stakeholders raising a range of questions and concerns in a tight timeframe. Commenters particularly sought clarification on parent vs. subsidiary liability; the feasibility of reporting deadlines; the definitions of “doing business in California” and “revenue” (earlier in the meeting, staff stated that CARB is already working to clarify the regulatory definition of the former); the frequency of fee assessment and how fees would apply to entities near the revenue threshold or with changing business status; whether existing sustainability or SEC filings could satisfy SB 261 requirements if they align with TCFD or IFRS standards; and whether only CARB-accredited verifiers could provide assurance. Going forward, CARB stated, it will continue refining regulatory definitions, fee structures, and reporting templates based on stakeholder feedback. Written comments are strongly encouraged and will be accepted through the newly opened public docket. Additional guidance and draft materials are expected in the coming months, with formal rulemaking and board consideration scheduled for late 2025.
Initiative launched to preserve, advance carbon accounting models that are widely used in disclosure reporting. On August 11, Stanford University’s Stanford Sustainable Solutions Lab and sustainability data provider Watershed announced Cornerstone, an initiative that will provide open access to the US Environmentally-Extended Input-Output model (USEEIO), EPA’s popular environmental-economic carbon accounting model of US goods and services, and Watershed’s own Comprehensive Environmental Data Archive (CEDA). Those two models are used by businesses around the world to calculate their Scope 3 emissions in order to comply with EU and California reporting requirements and to understand the impact of their operations – the USEEIO database is reportedly the third most viewed of more than 281,000 federal data sets on data.gov. EPA announced on August 8 that, starting in September, it would no longer update the USEEIO models. Watershed stated of Cornerstone that in the coming months the USEEIO and CEDA models will be merged into “a single global open multi-regional input output model” to “drive significant improvements in scope 3 measurements and expand beyond greenhouse gas pollution to assess regional air and water quality, water use, and waste generation” and “offer a durable common standard for companies, governments, and researchers.” Serving as Cornerstone’s technical director is Dr. Wesley Ingwersen, the architect of the USEEIO model, who joined Stanford after being suspended from EPA in June. Two other leading experts in emissions measurement, Dr. Steven Wright and Dr. Sangwon Suh, will serve as Cornerstone’s technical advisors.
Omnibus I in the news. The EU continues to advance Omnibus I, the set of proposed simplification measures that will streamline key reporting and compliance requirements of the bloc’s Green Deal – the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), EU Green Taxonomy, and Carbon Border Adjustment Mechanism. Here are the latest developments:
- The European Financial Reporting Advisory Group (EFRAG) on July 31 released revised and simplified exposure drafts of the European Sustainability Reporting Standards (ESRS). The standards set out in the ESRS are foundational to the CSRD. Among the revisions, mandatory datapoints as well as mandatory and voluntary disclosures have been greatly reduced, and the double materiality assessment has been refined, removing all voluntary disclosures and clarifying language. Overall, the revised ESRS are less than half the length of the originals. The public consultation on the simplified ESRA is open through September 29.
- As it awaits the outcome of the Omnibus I reforms, on August 11 the European Banking Authority (EBA) released a no action letter recommending that regulators not prioritize the enforcement of new ESG Pillar 3 disclosure requirements for banks for now. The steady advance of the Omnibus I reforms has created, for the moment, an uncertain regulatory environment which, EBA stated, could place a “disproportionate compliance burden” on smaller financial institutions could face; banks in general could be subject to conflicting disclosure requirements. In July, the EBA proposed amendments that would simplify its guidelines on product oversight and governance arrangements for retail banking products. Its virtual public hearing on the proposed amendments takes place on September 21. Register for it here by September 8.
- The European Commission has officially adopted the VSME Standard – a streamlined, updated version of reporting standards that will allow small and medium-sized enterprises that fall outside the scope of the Corporate Sustainability Reporting Directive (CSRD) to voluntarily report their disclosures. The VSME Standard is regarded as particularly useful for small businesses that are part of the value chain of larger entities, providing them with a compatible reporting format. The VSME Standard was developed by EFRAG.
- Eight EU countries have adopted legislation to implement the “stop the clock” directive, which delays the implementation of key sustainability reporting and due diligence requirements set out in the EU’s Green New Deal as Omnibus I proceeds. The eight are Cyprus, Estonia, France, Hungary, Ireland, Lithuania, Norway, and Poland. Ten others – Austria, Denmark, Finland, Germany, Italy, Latvia, Liechtenstein, Luxembourg, Slovenia, and Sweden – have drafted but not yet adopted implementing legislation.
UK: FCA sustainability reporting framework to be “streamlined and enhanced.” In the UK, the Financial Conduct Authority (FCA) is set to streamline and enhance its sustainability reporting framework after reviewing how firms have implemented climate-related disclosure rules. The review found that while the rules have improved firms’ consideration of climate risks and increased transparency, challenges remain, including the complexity and volume of disclosures, data limitations, and the need to make reports more useful for different types of investors. The FCA plans to simplify disclosure requirements, align reporting timelines across regimes like TCFD and SDR, and promote international consistency, all while maintaining high standards to prevent greenwashing and support investor trust. Additionally, the FCA is focusing on improving the sustainability-linked loans market by encouraging better-structured deals, stronger governance, and clearer standards, aiming to position the UK as a leader in sustainable and transition finance. Our alert tells you more.
ISS will update ESQS methodology in Q4. ISS Sustainability Solutions has announced that in Q4 2025 it will release updates to its Environmental & Social Disclosure QualityScore (ESQS) methodology. Companies and investors use the ESQS methodology to evaluate corporate governance practices in four areas: board structure, shareholder rights, compensation, and audit and risk oversight. An ISS press release states that among the changes being introduced, 35 new factors will be added to the ESQS, “including more detailed data points regarding Scope 3 GHG emissions, business ethics, as well as health and safety.” Nine other factors will be removed entirely, and two will be removed for certain industries “due to their decreasing relevance.” ISS will release more granular details about the updates in September.
Greenwashing
Italian regulator fines Shein website provider €1 million over greenwashing. The Autorità Garante della Concorrenza e del Mercato (AGCM), Italy’s competition and market regulator, has imposed a fine of €1 million (USD$1.16 million) on Infinite Styles Services Co. Ltd, a Dublin-based company that operates the website and app for the fast-fashion e-commerce giant Shein, over environmental claims on Shein's platforms. The fine, AGCM stated on August 4, “is for the use of misleading and deceptive environmental messages and claims – known as greenwashing.” As we reported in October, the AGCM’s investigation looked at statements on Shein's website that "convey an image of production and commercial sustainability of its garments through generic, vague, confusing and/or misleading environmental claims" as well as statements emphasizing Shein’s commitment to decarbonization, sustainability, and recyclability. AGCM concluded this month that such statements were "false or at least confusing.” Statements Shein made about its goal of reducing its GHG emissions, AGCM also found, were vague and misleading “and were even contradicted by an actual increase in Shein’s greenhouse gas emissions in 2023 and 2024.” Also on August 4, Shein announced it “is implementing targeted improvements across its supply chain” as part of its “ongoing work to address the environmental impact of its operations and reduce greenhouse gas emissions where feasible.” That plan, the company stated, will include replacing some diesel trucks in its operations in China with 130 custom-designed electric vehicles as well as implementing measures to enhance its logistics.
Putative class action alleges a premium water brand’s claims of purity are false and deceptive. A putative class action case filed on August 11 charges that Mountain Valley Spring Water’s premium products are being falsely advertised as “purely sourced,” “Free of pollutants,” and “exceptionally healthful.” The complaint, brought by Florida consumer Jeffrey Nadel against Mountain Valley, Primo Water Corporation, and Primo North America, states that independent laboratory testing of Mountain Valley Waters in July 2025 “detected arsenic, uranium, and bromoform – all substances with EPA Maximum Contaminant Level Goals of zero, meaning there is no safe level for human consumption,” as well as “multiple contaminants for which the EPA has established Maximum Contaminant Level Goals.” Nadel stated that he has purchased Mountain Valley Spring water for years, paying its premium price because he believed the company’s statement that he was purchasing “the very best bottled water you can drink.” Instead, his complaint states, consumers of the premium waters were purchasing “water containing detectable carcinogens and disinfection byproducts.” Nadel is seeking class certification as well as a judgment against the defendants “for violations of the Florida Deceptive and Unfair Trade Practices Act and all applicable state consumer protection statutes.” This case is in its earliest stages.
India: Parliamentary committee urges creation of ESG oversight body to combat greenwashing. In India, the parliamentary Standing Committee on Finance has called on the Ministry of Corporate Affairs to create an ESG oversight body “for actively combating greenwashing through specialised forensic expertise.” Among the committee’s other recommendations, it also called for India’s Companies Act, 2013 to be amended to add ESG objectives to the fiduciary responsibilities of company directors. The committee’s report was tabled on August 4.
Sustainability: Regulatory
US rejects IMO’s net zero framework and global pricing mechanism for carbon emissions from ships. As we've previously reported, in April International Maritime Organization (IMO) member nations agreed to implement a global pricing mechanism for carbon emissions from ships and to legally binding targets for such emissions: a 20 to 30 percent reduction in GHG emissions by 2030, a 70 percent reduction by 2040, and net-zero “by or around” 2050. The US did not take part in that agreement, leaving the negotiations before the vote occurred. This month, the US formally rejected the agreement. The August 11 joint statement from Secretary of State Marco Rubio, Commerce Secretary Howard Lutnick, Energy Secretary Chris Wright, and Transportation Secretary Sean Duffy stated that “the proposed framework is effectively a global carbon tax on Americans levied by an unaccountable UN organization,” then went on to warn any IMO members that persist in supporting the net-zero framework that the US will ”not hesitate to retaliate” against them. The draft regulations amending the International Convention for the Prevention of Pollution from Ships’ Annex VI are set to be adopted in October during an extraordinary session of the Marine Environment Protection Committee. Detailed implementation guidelines are expected to be approved in spring 2026, and the regulations are expected to enter into force in early 2027. Reuters report that many large shipping companies have already committed to achieving net-zero operations by 2050.
Plans to terminate Orbiting Carbon Observatories. The Trump Administration has reportedly asked NASA to formulate plans to terminate the Orbiting Carbon Observatories (OCO), the only federal satellite missions created specifically to monitor greenhouse gases. NASA reports that the termination of the OCOs is "to align with the President's agenda and budget priorities" in the proposed budget for FY2026. The equipment on the two OCO satellites is regarded as state of the art; the data the OCOs gather is extensively used by energy companies, businesses, the USDA, farmers, and private agricultural consulting companies both to understand the global distribution of CO2 and to measure plant growth and track crop yields. The OCOs have been funded by Congress through the 2025 fiscal year, which ends September 30. On August 8, NASA announced Research Opportunities for International Space Station Utilization “seeking submissions for partnerships for the continued operations and data collection of three Earth science missions” attached to the International Space Station – among them one of the OCO missions. The other OCO is free-flying; if that mission is terminated, the satellite would be abandoned to burn up in the atmosphere.
New White House AI Action Plan and EO aim to streamline environmental review and data center permitting. An Executive Order and accompanying Action Plan issued in late July aim to support AI development and the digital transformation by streamlining federal permitting and environmental review of new data centers that constitute “Qualifying Projects.” The Action Plan and EO specifically call for reducing or eliminating regulatory barriers to increasing US semiconductor manufacturing and electricity generation capacity, as well as modernizing electricity transmission. See our alert.
California legislator proposes reauthorization, some reforms to cap-and-trade program. As we reported in April, California Governor Gavin Newsom has urged the state legislature to extend the long-running cap-and-trade emissions program, a measure proposed and then signed into law by Governor Arnold Schwarzenegger in 2006. Without further action, the program will expire in 2030. On August 19, Assemblymember Jacqui Irwin (D-Thousand Oaks) announced a proposal that would reauthorize the program and reform certain aspects of it. For instance, under the current program, free allowances are allocated to some participants in industries that are both energy intensive and trade exposed and thus at risk of leaving the state. Under Irwin’s proposal, the regulatory formula used to award free allowances would be redesigned to reflect more up-to-date trade data. Her proposal would also expand the use of purchased offsets. At this writing, whether Irwin’s proposal will be addressed in this year’s legislative session, which ends September 12, is unclear. In the decade leading up to 2024, California funded $28 billion in “climate investments” through the cap-and-trade program, broadly ranging from wildfire prevention and environmental restoration to low-carbon transit and electric vehicle rebates. The program also funds the California Climate Credit, which is applied to state residents’ electric and gas bills. Irwin’s proposal would alter the timing of that refund, too, moving it to the time of year when utility bills are highest.
SB 54 Advisory Board provides updates on implementing California’s EPR law for packaging. On August 15, the SB 54 Advisory Board met to update stakeholders on the progress of implementing California’s SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act. The meeting included a detailed presentation on SB 54’s ongoing Source Reduction & Material Design Needs Assessment. The timeline for the assessment is aggressive: draft and final reports are due throughout the fall of 2025. The Advisory Board went on to provide an update on the status of rulemaking, recent regulatory changes, and the upcoming formal public comment period. Notably, proposed regulatory changes would clarify that only components of FDA/USDA-regulated materials with irreconcilable conflicts are excluded, not entire packages. Compostable plastics standards would also require full biological decomposition with no toxic residues. Local jurisdictions may now apply for exemptions or extensions at any time, even after a notice of violation, and penalties are paused during that review. Furthermore, the Covered Material Categories list and producer reporting guidance are being updated, with new versions expected soon.
Finally, the Circular Action Alliance (CAA), the producer responsibility organization tasked with overseeing industry compliance with SB 54, presented its plans for stakeholder engagement and program development, focusing on transparency and inclusivity. CAA is encouraging early producer engagement for data reporting and is finalizing interim agreements to facilitate compliance ahead of final regulations. Elements of the draft program plan, CAA said, will be brought to the Advisory Board for review and discussion before the full plan is submitted in June 2026, rather than presenting the entire plan at once.
Plastics treaty talks fail. Negotiations this month in Geneva to agree on an international legally binding instrument on plastic pollution have collapsed. As we reported last month, the UN’s Intergovernmental Negotiating Committee on Plastic Pollution (INC) had convened this session in hopes of finalizing an agreement after the prior session, in Busan in December 2024, failed. As the World Economic Forum reported, “No agreement to reach stricter, enforceable rules to reduce plastic pollution was achieved after 10 days of negotiations by nations” because “consensus could not be reached on key issues, such as whether the treaty should impose caps on new plastic production or put its focus instead on waste management, reuse and improved design.” This is not the end for the treaty, however; negotiations are expected to resume in the future, although a date has not been set. DLA Piper was present at the Geneva meeting to represent the Environmental Law Institute, which has observer status in the negotiations.
European Commission opens public consultation for Circular Economy Act. On August 1, the European Commission (EC) opened a public consultation and call for evidence in support of the forthcoming Circular Economy Act. The EC states that the act, due for adoption in 2026, “aims to establish a Single Market for secondary raw materials, increase the supply of high-quality recycled materials and stimulate demand for these materials in the EU.” The consultation is part of the larger impact assessment process for the act, through which the EC is seeking a better understanding of “the bottlenecks and opportunities for the wider deployment of a circular economy.” The public consultation period is open until November 6, 2025, via the Have Your Say portal.
Sustainability: Litigation
Federal Court denies preliminary injunction against California’s SB 253 and SB 261. On August 13, the US District Court for the Central District of California issued an order in Chamber of Commerce of the United States of America et al. v. California Air Resources Board denying the plaintiffs’ motion for a preliminary injunction seeking to halt enforcement of California Senate Bills 253 (the Climate Corporate Data Accountability Act) and 261 (the Climate-Related Financial Risk Disclosure Program). The challenge, on First Amendment grounds, argued that the two laws’ disclosure requirements amount to compelled speech and are unconstitutional. The court’s analysis focused on several key issues. Applying different standards of review, the court found that SB 253 was reasonably related to substantial government interests, and that SB 261 was sufficiently tailored to the state’s objectives. The court also determined that the plaintiffs had not demonstrated a likelihood of success on their First Amendment claims against either law. Additionally, the court found that the balance of equities and the public interest weighed against granting an injunction, as enjoining the laws would delay California’s efforts to advance its climate and investor protection goals. The court’s order allows the state to move forward with implementation while this litigation proceeds. The plaintiffs have already filed a notice of appeal to the Ninth Circuit, and the court has set a briefing schedule for plaintiffs’ motion for an injunction pending resolution of the appeal. That motion will be heard on September 15, 2025. See some of our earlier coverage of this litigation here.
Vermont moves to dismiss Climate Superfund Law challenges. On August 15, the state of Vermont asked the US District Court for the District of Vermont to dismiss three lawsuits that seek to overturn Vermont’s Act 122, the Climate Superfund Act. One of the suits, brought in January by the US Chamber of Commerce and the American Petroleum Institute, charges that the Vermont law is preempted by the federal Clean Air Act (CAA), 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. That suit was joined by a coalition of 24 states led by West Virginia on May 1. The third suit, brought in May by the Department of Justice, points to President Donald Trump’s April Executive Order, Protecting American Energy From State Overreach, and alleges that the Vermont law is preempted by the CAA and the foreign affairs doctrine. Vermont’s motion to dismiss addresses these charges, arguing that Act 122 “does not conflict with federal law or policy, regulate fossil fuel emissions, or punish fossil fuel producers” and that it is a “valid exercise of Vermont’s traditional authority to raise revenue, protect the health, safety, and welfare of its citizens, and mitigate environmental harms inside its borders.”
Administration’s lawsuit against New York Climate Superfund law will stay in the SDNY. The US District Court for the Southern District of New York (SDNY) has denied the state of New York’s request to move USA and EPA v. New York – the Administration’s constitutional challenge to New York’s Climate Superfund law – to a different venue. New York had sought to move the case to the Northern District of New York, which is already hearing a separate challenge to the law brought by 22 Republican-led states and two trade groups. On August 4, the court ruled that the case would remain in the SDNY for a number of reasons, most notably the government's right to proceed in its preferred jurisdiction. “The United States has selected this forum,” the court stated, “and on these facts, its choice is entitled to great deference.”
Lawsuit targets Oregon’s Plastic Pollution and Recycling Modernization Act. The National Association of Wholesaler-Distributors has sued Oregon’s Department of Environmental Quality, Environmental Quality Commission, and Attorney General, seeking to halt implementation of and invalidate Oregon’s Plastic Pollution and Recycling Modernization Act. The outcome of this litigation could have broad implications for the RMA and similar EPR laws in other states. Our alert explores the background of the case and its potential impacts for producers in the state and beyond.
City of Chicago v BP remanded to lower court. Also on August 4, the US Court of Appeals for the Seventh Circuit denied attempts by the defendants in City of Chicago v BP P.L.C. et al to block the court’s May 2025 order remanding the case to Cook County Circuit Court. In this lawsuit, originally filed in March 2024, Chicago is alleging that, for decades, the fossil fuel industry knowingly concealed the link between fossil fuel use and climate change to drive fossil fuel consumption, violating numerous Chicago laws and leading to “an enormous, foreseeable, and avoidable increase in anthropogenic GHG emissions and accelerated global warming, bringing devastating consequences to the City and its people.” The complaint goes on to ask the court to hold the plaintiffs financially accountable.
Administration asks court to dismiss youth-led lawsuit over energy EOs. Also on August 4, the Trump Administration asked the US District Court for the District of Montana to dismiss Lighthiser v. Trump, a youth-led lawsuit charging that three of the President’s energy-related Executive Orders (EOs) will accelerate climate change, causing “irreversible harm” to the plaintiffs and violating their constitutional rights to life and liberty. As we reported in May, the plaintiffs, among them litigants who prevailed in the landmark Held v. Montana case, charge that the EOs “falsely claim an energy emergency, while the true emergency is that fossil fuel pollution is destroying the foundation of Plaintiffs’ lives.” They are asking the US District Court for the District of Montana to invalidate the EOs and order the President, as well as 11 federal agencies also named as defendants, not to enforce or implement them. The Administration’s August 4 brief argues that the court should dismiss the case because, among other things, the plaintiffs’ claims are nonjusticiable, the plaintiffs lack Article III standing (meaning they must be able to show a concrete, personal stake in the outcome of a case), and the plaintiffs fail to plausibly allege that their climate injuries are traceable to the three challenged executive orders. On August 13, the states of Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Montana, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, Utah, West Virginia, and Wyoming, as well as the Territory of Guam, asked the court to allow them to join the case as defendant-intervenors.
Charleston’s climate accountability suit is dismissed. On August 5, the Court of Common Pleas for South Carolina’s Ninth Judicial Circuit dismissed the City of Charleston’s climate accountability suit, originally filed in 2020, against two dozen energy companies. The court concluded that state tort law cannot be used to hold these multinationals accountable for damages caused by GHG emissions and that it lacked jurisdiction over the defendants. At this writing, the city is considering whether to appeal. The case is City of Charleston v. Brabham Oil Co.
DC Circuit rejects constitutional challenge to AIM Act. The US Court of Appeals for the District of Columbia Circuit has rejected a constitutional challenge to the American Innovation and Manufacturing (AIM) Act. That act requires a substantial phasedown by 2036 in US production and consumption of hydrofluorocarbons (HFCs) – fluorinated gases widely used in refrigeration, air conditioning, and other applications. The Act, the EPA states on its website, facilitates this goal in three ways: by “(1) phasing down HFC production and consumption through an allowance allocation program, (2) facilitating sector-based transitions to next-generation technologies, and (3) issuing certain regulations for purposes of maximizing reclamation and minimizing releases of HFCs from equipment.” The plaintiff argued, among other things, that the AIM Act unconstitutionally delegates legislative power to the EPA. The court noted in its August 1 ruling that to avoid a non-delegation claim, legislation “must contain an ‘intelligible principle’ to guide an agency’s action.” The Aim Act, the court concluded, “easily passes muster.” The case is iGas Holdings, Inc., et al., v. EPA.
Supply chain integrity
DHS adds 5 Chinese industries, including steel and lithium, as high priority sectors for UFLPA border enforcement. On August 19, the Department of Homeland Security announced that it is designating five additional Chinese sectors as high priorities for enforcement under the Uyghur Forced Labor Prevention Act (UFLPA). Enacted in 2021, the UFLPA aims to “ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region [XUAR] of the People’s Republic of China do not enter the United States market.” It creates a rebuttable presumption that goods with any input from the Xinjiang Region in the People’s Republic of China or made by certain entities were manufactured in part or wholly by forced labor and, therefore, are prohibited from entry into the United States. To overcome the rebuttable presumption and receive an exception from US Customs and Border Protection, importers must meet a high evidentiary standard in demonstrating that the goods were not made with forced labor, among other requirements. The five new categories are steel, copper, lithium, caustic soda – which has numerous industrial applications – and red dates.
Australia: Consultation on strengthening the Modern Slavery Act. Australia’s Attorney-General has opened a public consultation process seeking input from the public on ways to strengthen the Modern Slavery Act 2018. The government’s press release on the consultation states that the Act is “a key pillar of Australia’s response to modern slavery. It requires certain large businesses based or operating in Australia to report on how they assess and address modern slavery risks in their operations and supply chains.” The consultation particularly seeks suggestions on enhancing the reporting framework for covered businesses,” to simplify and improve reporting, and address non compliance.” The consultation period closes on September 1. You may also be interested in our reports on modern slavery legislation in Canada and New Zealand.
Energy and natural resources
Wright: EPA is “reviewing” and planning “updated” National Climate Assessments, plus latest developments around the Endangerment Finding. During an August 5 appearance on the CNN program The Source, Energy Secretary Chris Wright stated that the EPA is “reviewing” past versions of the National Climate Assessment (NCA) “and we will come out with updated reports.” The National Climate Assessment is a Congressionally mandated scientific report issued every four to five years summarizing the impacts of climate change on the US. Regarded as a pre-eminent source of scientific information, the NCA supports decision-making by governments, researchers, and businesses. In April, the Administration eliminated funding for the US Global Change Research Program, terminating the hundreds of scientists already working on the 2028 NCA. In July, the purpose-built website housing the 2023 NCA went dark. Relatedly, on July 23, the EPA proposed revoking the Endangerment Finding – the foundation for GHG regulation under the Clean Air Act and the backbone of US climate policy; that same day, the Department of Energy (DOE) released A Critical Review of Impacts of Greenhouse Gas Emissions on the U.S. Climate, a report written by five contributors over two months that questions the severity of climate change.
Hundreds of veteran climate scientists have responded to these developments. Among their actions, during the week of August 4, the National Academy of Sciences announced it is fast-tracking a comprehensive, self-funded review of climate science findings since 2009, the year the Endangerment Finding was originally issued. In September, the American Geophysical Union and the American Meteorological Society will issue a formal call for manuscripts on climate change in the US. Of note, the scientists involved in these and other similar efforts are not claiming their work will be sufficient to replace the National Climate Assessment.
On August 12, the Environmental Defense Fund and the Union of Concerned Scientists filed suit in the US District Court for the District of Massachusetts against Secretary Wright, EPA Administrator Lee Zeldin, the EPA, and the DOE, alleging that they utilized an unlawful advisory committee that worked in secret for months to produce a report for DOE and EPA that would provide justification for their predetermined goal of rescinding the Endangerment Finding, arguing that federal law does not permit agencies to create or rely on such secret, unaccountable groups when engaged in policymaking. That case, in its earliest stages, is Environmental Defense Fund, Inc. v. Wright.
On August 15, Dr. H. Christopher Frey, formerly the EPA’s Deputy Assistant Administrator for Science Policy, filed a “request for correction”– a formal mechanism calling on the DOE to remedy inaccuracies in the July 23 report that violate federal quality guidelines. In an article looking at legal concerns about the report, Dr. Frey noted that in their attempts to rescind the Endangerment Finding, “the Energy Department and the EPA seem to have run afoul of four laws in particular that may be tricky for the administration to get around.”
IEA: Electricity generation from renewables will overtake coal as soon as this year. As the global demand for electricity continues to expand, the International Energy Agency (IEA) states, electricity generation from renewable energy sources is forecast to overtake coal-fired generation as the world’s leading source of electricity as early as 2025 or by 2026. Natural gas and nuclear power will also play increasingly significant roles in electricity generation. The IEA’s forecast is set out in its Electricity Mid-Year Update 2025. The world’s growing demand for electricity, IEA concludes, will primarily be met by wind and solar photovoltaic energy, which it predicts will cover over 90 percent of the increase in global electricity demand in 2025; hydro power will modestly enhance renewables’ reach. Coal’s importance, the IEA states, will continue to slowly decline, while the US, India, and other Asian countries have increased their dependence on coal-fired generation, its use is shrinking in the EU and China. Alongside that shift, nuclear power generation is set to hit a new record in 2025, and will continue to rise in 2026, and multiple regions are switching from coal to gas to generate electricity. See the Electricity Mid-Year Update 2025 here.
Philippines to introduce Carbon Credit Policy. The Department of Energy (DOE) of the Philippines will launch a Carbon Credit Policy for its energy sector. In his announcement on August 18, Energy Undersecretary Felix William B. Fuentebella stated that the policy “will equip our energy sector with the tools to generate and manage carbon credits with integrity, ensuring every ton of reduced carbon dioxide is real and verifiable.” The policy advances the Philippines’ recent moves to advance its commitment to the clean energy transition, among them its 2024 Memorandum of Understanding with Singapore to collaborate on carbon credits under Paris Agreement Article 6, which supports international cooperation to tackle climate change and unlock financial support for developing countries.
Germany: Cabinet approves two draft bills supporting climate goals. On August 6, Germany’s federal cabinet approved two draft bills to support the energy transition. The first, addressing Germany’s goal of eliminating fossil fuel-based heating by 2045, would accelerate the development of geothermal energy projects. The draft bill would streamline the current regulatory process and would classify geothermal plants, heat pumps, thermal storage, and district heating pipelines as of "overriding public interest" – the same classification already applied to wind and solar projects. The second draft bill approved by the cabinet would amend the Carbon Dioxide Storage Act to accelerate planning and approval for CO2 capture, transport, and storage projects. This measure particularly addresses the concerns of companies in hard-to-abate industries – such as cement and lime production – allowing them, with state approval, to store CO2 offshore, under the seabed, or inland. CO2 capture projects would also be reclassified as of “overriding public interest.” Both draft bills now go to the Bundestag.
Sustainability in financial services
Significant decline in banks’ fossil fuel project financing. Financing from Wall Street’s top six banks for fossil fuel projects has significantly declined so far this year compared to the same period in 2024, according to data compiled by BloombergNEF, a research division of Bloomberg LP. Reviewing data on investments made from January 1 to August 1, researchers found that this year the most prominent banks invested $73 billion in oil, gas, and coal projects, a decline of 25 percent over the same time frame last year. Bloomberg reporter Alastair Marsh observed, “The statistics suggest that, despite political headwinds, US banks may now be reducing emissions in response to the forces of capitalism.”
“Fair banking” Executive Order targets politicized debanking and reputational risk. President Donald Trump’s August 7 Executive Order “Guaranteeing Fair Banking for all Americans” broadly prohibits banks and other financial institutions from engaging in politicized or unlawful debanking – essentially, from restricting or denying credit, deposit, or other financial services to customers and potential customers based on political or religious beliefs or lawful business activities. Our alert sets out proactive steps supervised institutions may wish to consider in this evolving landscape.
China updates Green Taxonomy via new Catalog of Green Finance Endorsed Products. Aiming to boost liquidity in green finance, China has announced that it is updating its Green Taxonomy, consolidating formerly separate bond and loan market standards for economic activities into a single Catalog of Green Finance Endorsed Products. That catalog defines the economic activities that qualify as green or environmentally sustainable across a wide swathe of industries. Issued by the People’s Bank of China, the China Securities Regulatory Commission, and the National Financial Regulatory Administration, the catalog goes into effect on October 1.
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