ESG Newsletter – March 2026

How to find our ESG materials

We have produced a guide which brings together our key ESG resources in one dedicated space, helping you stay up to speed with the latest developments. The guide provides easy access to our ESG expertise, ESG Outlook with key trends for 2026, blog, trackers, quick guides and collection pages. See our guide. 
 

Join our half-day conference at our brand-new Linklaters offices in London (20 Ropemaker) on 18 March, where for one of our panels we will be joined by an incredible line-up of speakers to hear about key sustainable finance developments:

• UK FCA's Alicia Kedzierski (Head of Sustainable Finance division)
• Bank of England's Tim Rawlings (Co-head of Climate Hub)
• European Commission's Edoardo Rulli (member of the Cabinet of the Commissioner for Financial Services and the SIU)
• French AMF's Viet Linh Nguyen (Head of Sustainable Finance Unit)

Alongside this sustainable finance panel, we will also be hosting other panels on growth and innovation, technology risk and opportunity, supervision and enforcement. 

The sustainable finance panel will run between 11am - 12 noon (please check here for any updates to timing). Please feel free to join just this one panel discussion, or come for the whole morning.

If you would like to attend, please get in touch at frgevents@linklaters.com.  

EU Omnibus I Directive published in Official Journal of the EU

The Directive (EU) 2026/470 on the changes to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD / CS3D) under the Omnibus I package (usually referred to as the “Omnibus I Directive” or “Requirements proposal”) was published in the Official Journal of the EU on 26 February 2026.  The Omnibus I Directive will enter into force on 18 March 2026. EU Member States are required to transpose the provisions of the Directive into national law by 19 March 2027, except for the provisions related to the CSDDD which shall be transposed by 26 July 2028. The Omnibus I Directive made several substantive changes to the CSRD and CSDDD. For more information, see our blog post. 

EU CSRD: Regulators express views on revised ESRS 

In December 2025, EFRAG published revised European Sustainability Reporting Standards (ESRS) following the European Commission's Omnibus I simplification initiative. As required by the Corporate Sustainability Reporting Directive (CSRD), the European Commission requested opinions on EFRAG's revised ESRS from three key European Union financial regulators: the European Central Bank (ECB), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA). In February 2026, the ECB, EIOPA and ESMA published their respective opinions. The three regulators share a core concern that the package of permanent reliefs, phase-ins and exemptions in the revised ESRS risks undermining the availability of key quantitative data. They also highlight that several reliefs go beyond, or deviate from, the ISSB standards (IFRS S1 and S2), creating interoperability gaps. For more information, see our blog post. 

Energy Omnibus: Call for evidence  

On 12 February 2026, the European Commission launched a call for evidence on an Energy Omnibus - see Omnibus simplification of energy-efficient product legislation. This Omnibus was included in the Commission Work Programme 2026 and will target primarily energy labelling and energy-related products legislation, and tyre labelling. The call for evidence closes on 12 March 2026 and adoption of the proposal is planned  for Q2 2026. 

UK: Government publishes final versions of UK SRS

On 25 February 2026, the Department for Business and Trade published the final versions of the UK Sustainability Reporting Standards (UK SRS). The UK SRS implement into UK law the sustainability disclosure standards developed by the ISSB (IFRS S1 and S2) with some minor changes. The UK SRS are available for voluntary use initially but the government will be consulting in due course to changes to the Companies Act to make disclosure mandatory for certain types of companies and the FCA is already consulting on changes to the UK Listing Rules to make the UK SRS mandatory for listed companies. For more information, see our blog post. 

UK corporate reporting 2025/26: guide for large unlisted companies and LLPs

We have published our annual reporting guide for UK large unlisted companies and LLPs. The guide aims to help large unlisted UK companies and LLPs prepare their 2025/26 annual reports by summarising recent developments and regulatory guidance. It also looks ahead to regulatory developments that are expected to affect annual reports in future years. The guide covers insights from the FRC’s latest thematic reviews on climate‑related financial disclosures and future developments that may influence reporting, including sustainability disclosure standards and transition plan disclosures. We have an equivalent guide for UK listed companies - see here. 

Sustainable Finance Outlook for 2026: UK and EU round-up

We have produced a round-up of key sustainable finance themes for 2026 in the UK and EU, including in respect of corporate sustainability disclosures, product level disclosures, ESG ratings, management of climate- and environment-related financial risks (with a prudential focus), and transition plans. For more information, see our blog post. 

EU: ECB fines French bank for failure to meet deadline to identify and assess material C&E risks

The European Central Bank (ECB) has imposed periodic penalty payments amounting to more than €7.5 million on a French bank as a result of non-compliance with an ECB requirement for the bank to conduct a materiality assessment of its climate-related and environmental (C&E) risks (see ECB press release). The decision required the bank to reinforce its identification of the material C&E risks to which it is or might be exposed, and provided for the accrual of periodic penalty payments in the event of a failure to comply with this requirement by 31 May 2024.  The bank may challenge the ECB’s decision before the Court of Justice of the European Union. This is the second climate-risk related fine imposed by the ECB, following a €187,650 penalty on a Spanish bank in November 2025 for failing to conduct a materiality assessment of its C&E risks (see previous ECB press release). 

The French bank has said (see here) that it “acknowledges the ECB’s decision,” but that it “can only express its lack of understanding regarding a purely administrative penalty,” noting that the “decision relates solely to [the bank’s] response time to one of ECB’s requirements,” and that “the ECB itself acknowledged that it was very difficult to respond to this specific and highly granular request according to the imposed schedule.” The bank also said that “the ECB underlined that [the bank] had met all of its requirements” and added that “The Group specifies that this decision does not concern, in any way, its commitments and concrete actions in favor of climate and energy transition.”

For more information on the ECB’s expectations, see our previous blog posts:

• EU: ECB threatens to fine banks that lag behind on managing climate change risks
• Latest ECB assessment finds Banks have increased disclosure of climate and environmental risks but quality of disclosure requires urgent improvement
• ECB sets deadlines for banks to deal with climate risks

EU Prospectus Regulation: Commission draft Delegated Regulation on disclosures for ESG bonds

The EU Listing Act, amending the EU Prospectus Regulation (EU PR), entered into force in December 2024. However, certain amendments which were reliant on delegated acts, were scheduled to be phased in. This includes, in particular, prospectus disclosure requirements for bonds “advertised as taking into account ESG factors or pursuing ESG objectives”, which are intended to take effect from 5 June 2026. On 11 February 2026, the European Commission published its draft Delegated Regulation amending Delegated Regulation (EU) 2019/980 as regards the standardised format and sequence and the streamlined content, scrutiny and approval of the prospectus. This draft regulation is open for comment until 11 March 2026 and represents the near final stage in the legislative process. The provisions of this DR are expected to apply from 5 June 2026 in accordance with the amendments to the EU PR made pursuant to the EU Listing Act in 2024. For more information, see our blog post. 

EU: Updated EIOPA guidelines include sustainability focus for insurance supervisors

On 13 February 2026, the European Insurance and Occupational Pensions Authority (EIOPA) published a set of revised guidelines (together with a final report) on the supervisory review process under the EU’s Solvency II Directive, as part of ongoing work to review and reform the EU’s Solvency II framework. The guidelines, which will become applicable as of 30 January 2027, contain new guidance intended to ensure that supervisory authorities integrate an assessment of climate change and other sustainability risks within their supervisory review processes. The guidelines state that this should involve, amongst other things, an assessment of the actual and potential impact of sustainability risks and verifying whether and how (re)insurance undertakings are integrating such risks within their business models, strategies and the system of governance. 

UK: FCA sets out examples of good and poor practice for using SDR labels

The Financial Conduct Authority (FCA) has published the findings and examples of good and poor practice of firms using sustainability labels under the Sustainability Disclosure Requirements (SDR) regime, which has been in force since July 2024. The examples are to help firms prepare pre-contractual disclosures for use of labels, following the previous pre-contractual disclosure examples published in November 2024. For more information, see our blog post.

Energy & Infrastructure Legal Outlook 2026: Webinar recording 

On 10 February 2026, our panel of experts explored the Energy & Infrastructure Legal Outlook 2026 and what it means for those shaping and investing in the energy transition. This was the third session in our Energy Transition Webinar Series, where we highlighted the legal and regulatory changes to watch in 2026 and beyond. 

Click here to watch the webinar recording. Click here to read our Energy & Infrastructure Legal Outlook 2026 in full. 

Europe: Hamburg Declaration on large-scale offshore wind integration in the North Sea

The Hamburg Declaration, signed in January 2026 by nine North Sea nations, represents an exciting opportunity for cross-border offshore wind development and grid integration in the North Sea. A key commitment in the Declaration is that up to 100GW of the 300GW total offshore wind ambition in the North Sea will be developed through hybrid infrastructure projects that connect electricity grids across multiple countries. This coordinated approach will require unprecedented regulatory, planning and technical cooperation between states, transmission system operators and industry. With energy security and system resilience in mind, this harmonised policy signal is designed to provide the certainty needed to mobilise private capital investment to transform the North Sea into the world's largest clean energy hub. For more information, see our client briefing. 

EU ESPR: Commission adopts final acts on unsold consumer product destruction and disclosure

On 9 February 2026, the European Commission published the final versions of two key implementing acts under the Ecodesign for Sustainable Products Regulation (ESPR) aimed at preventing the destruction of unsold apparel, clothing, accessories and footwear:

• The Implementing Regulation introduces a standardised format for reporting discarded unsold consumer goods;

• The Delegated Regulation defines cases where destruction is allowed, such as for safety reasons or in the event of product damage.

Both acts will now need to be published in the Official Journal of the EU and will enter into force 20 days after such publication. The Delegated Regulation will apply from 19 July 2026, and the Implementing Regulation will start to apply one year after its entry into force. For more information, see our blog post. 

UK: Government publishes UK CBAM policy summary and consultation on draft regulations

On 10 February 2026, the government published a policy summary and a consultation on three sets of draft regulations for the UK Carbon Border Adjustment Mechanism (UK CBAM). The UK CBAM is due to start on 1 January 2027. The policy summary explains the operation of the UK CBAM, including its scope, how CBAM liability is calculated, and how the CBAM will be administered. 

The draft regulations, which will come into effect alongside the CBAM, are the:

• Carbon Border Adjustment Mechanism (Administrative Provisions) Regulations 2026, which provide details on the information required to register and submit returns, reimbursement arrangements, calculating the weight of a CBAM good and other record keeping requirements.
• Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026, which clarify the steps involved in calculating the CBAM rate and provide information on the carbon price relief (CPR), including on claiming, verifying and calculating CPR, and record keeping requirements.
• Carbon Border Adjustment Mechanism (Transitory Provision) Regulations 2026, which modify dates relating to payments, registration, accounting periods and related penalties for the transition period (1 January 2027 to 30 June 2028).

The government also published draft notices which will have the force of law to support understanding of the UK CBAM legislation. The consultation closes on 24 March 2026. The government will consult on a further set of draft secondary legislation in spring 2026 and will lay the final secondary legislation later in the year. 

UK: 2026 AGM guide for UK listed companies 

We have published a guide that summarises and comments on major developments relevant to UK listed companies preparing for AGMs in 2026 - see AGMs Update 2026: A guide for UK-listed companies. The guide includes analysis of various ESG issues, including climate and other sustainability-related resolutions and “say on climate” votes. 

EU Forced Labour Regulation: Commission seeks feedback on implementation guidelines and rules on regulators’ information system

The EU Forced Labour Regulation (FLR) is entering into application on 14 December 2027. The European Commission is required to publish implementation guidelines by 14 June 2026 (i.e. 18 months before the FLR starts to apply).  On 6 February 2026, the Commission launched a call for evidence to gather stakeholder feedback on the guidelines.  A few days earlier, the Commission also published a draft Implementing Regulation on the use of the Information and Communication System for Market Surveillance (ICSMS), which is the information technology platform used to facilitate communication between regulators in EU and EFTA countries. For more information, see our blog post. 

UK: FTSE Women Leaders Review 2025

On 24 February 2026, the FTSE Women Leaders Review published its 2025 report - the final report in a five-year cycle that has fundamentally shaped the conversation around gender diversity at the highest levels of UK business. The latest report showcases both modest and transformational progress. Whilst female board representation across the FTSE 350 is strong, female executive balance has a long way to go. As a general theme, the report finds that commitment to gender equality at the most senior levels of UK business remains strong, with transformational progress in some sectors and companies. However, there are still areas needing improvement. For more information, see our blog post.

Japan’s FSA finalises rules mandating sustainability disclosures

Japan’s Financial Services Agency (FSA) has finalised amendments to the Cabinet Office Ordinance on Disclosure of Corporate Affairs that will introduce mandatory sustainability reporting for large-cap issuers on the Tokyo Stock Exchange (TSE) Prime Market and significantly expand human capital disclosure obligations (see our December 2025 ESG Newsletter). Under the new rules, companies on the TSE Prime Market with an average market capitalisation of JPY 1 trillion or more as of the end of the preceding five fiscal years (or less, if listed within such period) will be required to include sustainability-related information in their annual securities reports in accordance with the Sustainability Disclosure Standards issued by the Sustainability Standards Board of Japan (SSBJ). Companies with an average market capitalisation of JPY 3 trillion or more must apply the rules for financial years ending on or after 31 March 2027, with companies between JPY 1 trillion and JPY 3 trillion following for financial years ending on or after 31 March 2028. To facilitate implementation, within the initial two years following implementation, a “two-stage disclosure” mechanism will permit companies to file annual reports on schedule and submit the mandatory sustainability information later via an amendment report, no later than the deadline for the subsequent semi-annual report. In addition, the FSA has introduced safe harbour protection for forward-looking information relating to Scope 3 greenhouse gas emissions, provided that companies explain the assumptions and methodologies used in a reasonable and detailed manner, and has clarified that foreign issuers may use sustainability standards that the FSA deems equivalent, including the standards of the International Sustainability Standards Board (ISSB). 

Thailand revises sustainability-related disclosure principles to align with ISSB Standards

Following the public hearing on the draft amendment to sustainability-related information disclosure requirements, the Securities and Exchange Commission of Thailand (SEC) has announced its plan to proceed with the proposed sustainability-related information disclosure requirements aligned with the International Sustainability Standards Board (ISSB) Standards for listed companies in the Stock Exchange of Thailand. The revised principles were approved by the Capital Market Supervisory Board in November 2025. However, the SEC has not yet issued the formal regulations or finalised the amendments to implement these changes.

The SEC has confirmed that it will maintain the core framework requiring companies to disclose information in accordance with IFRS S1 and S2, with a climate-first reporting approach in the initial phase. Companies will be required to disclose Scope 1 and Scope 2 greenhouse gas emissions data with proper verification.

However, the SEC has revised the principles relating to the effective timeline to provide companies with sufficient preparation time. The implementation will follow a phased-in approach with transitional relief measures:

• SET50 companies (based on the December 2026 review): effective from 2027, with reports to be submitted in 2028
• SET100 companies (based on the December 2027 review): effective from 2028, with reports to be submitted in 2029
• All other SET-listed companies (including IPO entities): effective from 2029, with reports to be submitted in 2030
• All MAI companies, REITs, Infrastructure Trusts (IFT), Infrastructure Funds (IFF), and Property Funds (PF) (including IPO entities): effective from 2030, with reports to be submitted in 2031
• LiVEx-listed entities will remain excluded from these requirements

Companies will be required to engage qualified assurance providers to verify their Scope 1 and Scope 2 greenhouse gas emission data in accordance with international standards. Qualified providers include verifiers registered with the Thailand Greenhouse Gas Management Organization (TGO) or other verifiers operating in accordance with internationally accepted standards.

The SEC is currently in the process of revising the relevant rules and related documents. Once completed, the SEC will communicate the final requirements to stakeholders and will provide ongoing implementation support through training programs and guidance materials developed in cooperation with domestic and international partner organizations to build capacity and understanding among the private sectors.

China sets out a roadmap for a unified national electricity market 

On 8 February 2026, China’s General Office of the State Council issued the Implementation Opinions on Improving the National Unified Electricity Market System (Chinese language) (the Opinions), which set out 19 key tasks in five areas to optimise the allocation of electricity, improve market functions, expand participation and strengthen policy coordination. The Opinions call for a gradual shift from separate local trades to more unified regional bidding, with improved cross‑provincial and cross‑regional electricity trading systems especially for clean energy. The Opinions also support piloting capacity markets and compensation mechanisms for supporting power sources, opening clearer market pathways for new energy and green power, widening direct market access for small and medium‑sized consumers, and creating a more diversified governance system for the electricity market involving government, electricity regulators, market committees and market operators. According to the Opinions, the national unified electricity market system is expected to be largely in place by 2030 and fully established by 2035.

China requires petrochemicals plants, copper smelters, airlines and other heavy polluters to report their emissions

China’s Ministry of Ecology and Environment (MEE) has taken a further step towards expanding the scope of the national emissions trading scheme (ETS), by requiring a broader group of high‑emitting enterprises to report their greenhouse gas emissions. On 9 February 2026, MEE issued a notice (Chinese language) stating that enterprises with annual emissions of at least 26,000 tonnes of carbon dioxide equivalent must submit verified emissions data for 2025 by the end of March 2026. The obligation applies across a range of energy‑intensive and trade‑exposed sectors, including petrochemicals, non‑ferrous metals (including copper smelting), aviation, chemicals, glass, and paper. These reporting requirements are intended to prepare for the inclusion of these sectors in the national ETS, which the Chinese government aims to extend to a “new batch” of industries by 2027. The MEE has not yet confirmed the date on which the additional industries subject to the new reporting obligation will start compliance trading.

Shanghai, Shenzhen and Beijing stock exchanges release revised sustainability reporting guidelines

On 30 January 2026, the Shanghai Stock Exchange (SSE), Shenzhen Stock Exchange (SZSE), and Beijing Stock Exchange (BSE) revised their respective Guides on Compilation of Sustainability Reports and added three application guidelines on “Pollutant Discharge”, “Energy Utilisation”, and “Water Resources Utilisation” (the Technical Guidelines). The Technical Guidelines, issued for consultation in September, are intended to help listed companies implement the mandatory sustainability reporting guidelines that came into effect on 1 May 2024 (see our October 2025 ESG Newsletter). 

China publishes sustainability assurance standards

On 9 January 2026, China’s Ministry of Finance issued the Sustainability Information Assurance Services Standards No. 6101 - Basic Standards (Trial) (Chinese language) (the Assurance Standards). The Assurance Standards establish a unified regulatory framework for sustainability assurance in China. The Assurance Standards apply to all third-party institutions (including accounting firms, certification bodies, and consulting firms) conducting sustainability assurance engagements. The Assurance Standards draw on the International Auditing and Assurance Standards Board’s (IAASB) ISSA 5000, which provides a global benchmark for sustainability assurance engagements while also reflecting local green development priorities and regulatory requirements. Currently, the Assurance Standards are issued on a trial basis and can be applied voluntarily.

Hong Kong SAR Budget 2026: Accelerating Green Development 

The 2026-2027 Budget addressed a number of green and sustainability matters. On green finance, to support Hong Kong's status as an international green finance centre, the Government will continue issuing sustainable bonds, establishing an enabling regulatory environment and strengthening cross-sectoral collaboration, including taking forward the implementation of the Hong Kong Sustainability Disclosure Standards. The Hong Kong Monetary Authority (HKMA) is refining the Hong Kong Taxonomy for Sustainable Finance and “will strive to develop green transition planning guidance for banks within the year”. The Government will also support the exploration of establishing a Hong Kong-based Green Technology Projects Accelerator to provide incubation, acceleration, and empowerment services for green technology projects in Belt and Road regions. It will also explore facilitating financial institutions to access enterprise public utility usage data to enhance the efficiency of green financing and risk assessment.

Singapore Budget 2026: Supporting the green transition and energy infrastructure

The FY2026 Budget set out measures to fund Singapore's long-term energy infrastructure needs. The Government will extend the Energy Efficiency Grant and support for green loans under the Enterprise Financing Scheme to help firms invest in energy-efficient and sustainable solutions. The Government has also set aside resources for critical infrastructure investments for Singapore's energy transition and coastal protection. The budget also noted that a key pillar of Singapore's climate strategy is the carbon tax, which has been increased recently. 

Singapore and Rwanda invite applications for carbon credit projects under bilateral Implementation Agreement

Singapore and Rwanda have launched an application call for carbon credit projects under their bilateral Implementation Agreement, Singapore’s fourth such call following earlier agreements with Ghana, Peru, and Bhutan (see our February 2026 ESG Newsletter). Authorised projects in Rwanda will be permitted to generate carbon credits aligned with Article 6 of the Paris Agreement, which Singapore carbon tax-liable companies may use to offset up to 5% of their taxable emissions. Singapore has additionally committed to cancel 2% of authorised credits at first issuance to reduce global emissions and to channel 5% of the value from the authorised carbon credits towards adaptation measures in Rwanda. 

South Korea’s Financial Services Commission publishes ESG disclosure roadmap and transition finance guidelines

On 25 February 2026, South Korea’s Financial Services Commission (FSC) published an ESG disclosure roadmap (Korean language) (the Roadmap) for public consultation setting out a roadmap for mandatory ESG disclosures (see FSC press release). The new ESG disclosure standards are based on the IFRS Foundation's International Sustainability Standards Board (ISSB) standards with certain jurisdictional modifications (for example, the disclosure of certain industry-based information (including metrics) is optional). According to the Roadmap, mandatory disclosure obligations will apply to KOSPI-listed companies that have consolidated assets of KRW 30 trillion (or more) starting in 2028 (for FY 2027), with the scope of application expanding to other KOSPI-listed companies in phases — for example, expanding to KOSPI-listed companies with consolidated assets of KRW 10 trillion (or more) starting in 2029 (for FY 2028), with further expansion to be discussed taking into account international developments and market readiness. For companies first disclosing in 2028, there is a three-year grace period from reporting on their Scope 3 greenhouse gas emissions. Alongside the Roadmap, the government also published transition finance guidelines which are intended to support the scaling of transition finance for the decarbonisation of hard-to-abate sectors, such as steel, chemical and cement. The public consultation period runs until 31 March 2026, with the FSC planning to finalise and publish the Roadmap in April 2026.  (** This newsletter is intended merely to highlight issues and is not intended to provide Korean law advice.)

Federal Agency Actions 

On 24 February 2026, the Bureau of Ocean Energy Management published a proposed rule in the Federal Register that would revise the agency’s existing regulations for hard mineral prospecting, leasing, and operations on the U.S. Outer Continental Shelf (OCS). The proposed rule has nine discrete regulatory changes that fall into four general categories: (1) a shortened leasing review period; (2) elimination of redundant and superfluous provisions; (3) removal of jurisdictional controversy provisions; and (4) changes to environmental and NEPA-related provisions. The proposal is the first meaningful update to a regulatory framework that has remained largely unchanged since the late 1980s. 

This action is part of the Trump administrations push to establish critical minerals and energy independence and facilitate the extraction of OCS critical minerals.

On 18 February 2026, a coalition of 13 state attorneys general filed a lawsuit in the US District Court for the Northern District of California against the US Department of Energy (DOE) Secretary Chris Wright and the Office of Management and Budget (OMB) Director Russell Vought, challenging the termination of billions of dollars in federally funded energy and infrastructure awards under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act (IIJA). The lawsuit alleges that the DOE Secretary and OMB Director specifically targeted states with Democratic leadership, terminating over $7.5 billion in funding across more than 300 awards in 16 states. The complaint alleges that the agencies' actions violated the constitutional separation of powers and the Administrative Procedure Act, because the programs were created by statute and federal agencies have a duty to faithfully execute those laws. In the complaint, the coalition asked the court to declare the agencies’ actions unlawful and permanently enjoin them from interfering with these congressionally- mandated programs. This follows a separate ruling from the US District Court for the District of Columbia in January deeming the same agency actions cutting funding illegal, citing violations of the Fifth Amendment’s guarantee of equal protection.

On 12 February 2026, the US Environmental Protection Agency (EPA) issued a final rule repealing the 2009 Greenhouse Gas Emissions Endangerment Finding (the 2009 Endangerment Finding), making the following six key greenhouse gases no longer legally required to be regulated under the Clean Air Act: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. In the same package, the Trump administration repealed emission standards for light-, medium-, and heavy-duty vehicles. The Final Rule, which the Trump administration has identified as the “single largest deregulatory action in American history,” will have implications across multiple sectors, including consumer vehicles, commercial vehicles, and heavy-duty trucks, as well as coal-fired and natural gas power plants. Less than a week after the repeal, multiple environmental and health groups filed a joint petition for review with the US Court of Appeals for the District of Columbia Circuit on 18 February 2026, challenging EPA’s recission of the GHG finding and the subsequent repeal of vehicle emissions standards pursuant to the CAA. You can read more about the final rule and its potential implications in our client alert.

That same day, the Department of the Treasury (the Treasury) and the Internal Revenue Service (IRS) issued a notice providing interim guidance for determining whether certain clean energy facilities and manufacturers would be ineligible for energy tax credits based on possibly receiving material assistance from a “prohibited foreign entity” (PFE). The One Big Beautiful Bill Act (OBBB) added new restrictions to clean electricity credits and the advanced manufacturing production credit when there is material assistance from a PFE. The notice also includes the intention of the Treasury and IRS to propose regulations that would apply to “material assistance” from entities controlled by or subject to the jurisdiction of China, Russia, Iran, and North Korea. This new guidance offers interim safe harbor guidance for calculating a project or component’s material assistance cost ratio and provides relevant material assistance cost ratio thresholds.

On 10 February 2026, the US Court of Appeals for the District of Columbia Circuit upheld a Federal Energy Regulatory Commission (FERC) order approving a regional transmission operator’s restriction on “energy efficient resources” (EERs) from bidding in future transmission capacity auctions. The challenged FERC order was based on a PJM Interconnection, LLC, (PJM) tariff amendment barring EERs from participating in future capacity auctions for the 2026–27 delivery year. The court held that the FERC order was not unlawfully retroactive or arbitrary and capricious since the PJM amendment would only apply to future capacity auctions and found that PJM’s data and reasoning for the amendment were reliable and reasonable.

That same day, the Department of Transportation issued a notice proposing a requirement that only electric vehicle (EV) charging stations built with 100% American-made parts, manufactured domestically, would be eligible for the Buy America public interest waiver to access funding from the Federal Highway Administration. Currently, and based on the IIJA, EV chargers manufactured on or after 1 July 2024 are required to have at least 55% of the cost of all components manufactured in the US to be eligible for the waiver. These proposed adjustments would change both the components content threshold and require final assembly to take place within the US.

On 6 February 2026, EPA issued a final rule extending certain deadlines for coal combustion residual (CCR) facilities, including additional time to complete facility evaluations to identify CCR management units and to comply with groundwater monitoring requirements. The rule also adjusts related compliance dates for remaining CCR management unit obligations so that timelines are consistent across the program. EPA stated that these extensions and conforming amendments are intended to give CCR facilities sufficient time and flexibility to meet the applicable regulatory standards effectively.

On 4 February 2026, the US Secretary of State announced the creation of the Forum on Resource Geostrategic Engagement (FORGE), a new global partnership intended to create a “preferential trading zone for critical minerals” within the signatory nations. The FORGE partnership came on the heels of the 2 February 2026 announcement by President Trump of “Project Vault”, an initiative to create a critical minerals stockpile for use by domestic manufacturers, including the tech sector. It will combine $10 billion in financing from the US Export-Import Bank with $2 billion in raised private capital to fulfill the stockpile. Both of these initiatives are meant to strengthen what the Trump administration is calling the “Pax Silica” partnership, intended to reduce reliance on China for rare earth elements.

On 3 February 2026, IRS proposed regulations providing clarity to domestic producers as to the determination of the amount of the Section 45Z Clean Fuel Production Credit, including applicable emissions rates, as well as certification and registration requirements. The Section 45Z Clean Fuel Production Credit provides a significant tax incentive for domestic production of low-carbon transportation fuels. Under the One Big Beautiful Bill Act (OBBBA), the credit, although extended through 2029, was amended to impose greater restrictions around prohibited foreign entities, eliminate aviation fuel’s special rate, and expand the definition of “qualified sale”, among other things.

On 2 February 2026, the US District Court for the District of Columbia lifted the Trump administration’s suspension order on the Sunrise Wind offshore wind (OSW) project, representing the final of five OSW projects previously halted by the administration to have its stop-work order lifted. Located off the coast of New York, the Sunrise Wind project is expected to provide over 900 megawatts (MW) of energy by the end of 2027. The order granted Sunrise Wind’s request for a preliminary injunction against the suspension order, which allows the project to resume  construction.

On 30 January 2026, the US District Court for the District of Massachusetts declared that a “climate advisory panel” newly formed by DOE—the “Climate Working Group” (CWG)—was unlawful. The creation of the Climate Working Group was held to be a violation of the Federal Advisory Committee Act (FACA) by the Trump administration due to the secretive nature of the CWG’s creation and operation. The court held that the CWG was not exempt from FACA requirements and that CWG was not merely assembled to exchange facts or information but rather to provide policy advice and recommendations to DOE. FACA requires that federal government advisory committees cannot form or operate in secret and requires fairly balanced membership. Before the CWG was dissolved, it created a climate-related report that was used to justify the Trump administration’s overturning of EPA’s 2009 Endangerment Finding.

On 28 January 2026, the State of Colorado filed an appeal with DOE seeking a stay of DOE’s order to keep open a coal plant that was set to retire on 31 December 2025. On 30 December 2025, DOE issued an emergency order directing the co-owners of Craig Station to take all measures necessary to ensure that Unit 1, a coal-fired generation unit at Craig Station, is available to operate. DOE cited, among other things, a shortage of and sudden increase in demand for electric energy along with President Trump’s “Declaring a National Energy Emergency” and “Strengthening the Reliability and Security of the United States Electric Grid” executive orders as reasons for the emergency order. This emergency order is the latest in the recent slew of federal emergency orders issued to keep coal plants running past planned retirement dates. Colorado lawmakers subsequently introduced House Bill 1226 on 18 February 2026, which aims to adopt measures to mitigate the cost of and reduce emissions from certain electric generating units in the state.

On 20 February 2026, the US Forest Service (USFS) issued a final rule revising its regulations that govern the occupancy and use of National Forest System lands for locatable mineral exploration and production. The revisions are designed to modernize regulations that have remained largely unchanged since 1974, improve efficiency, transparency, and consistency — including closer alignment with BLM’s surface-management rules — and better minimize adverse impacts on surface resources while supporting federal policy to secure domestic supplies of strategic and critical minerals.

Presidential Actions

On 11 February 2026, President Trump issued an executive order directing the US Department of War (DOW) to prioritize coal-fired power for the electric grid serving military and other mission-critical facilities. The order specifically identifies coal as essential to national and economic security and instructs the Secretary of War, in coordination with the Secretary of Energy, to enter into long-term power purchase agreements with coal plants to serve DOW installation and other mission-critical facilities. 

State Actions

On 26 February 2026, the California Air Resources Board (CARB) approved the first implementing regulation for California’s climate disclosure rules, commonly referred to as “SB 253” - the Climate Corporate Data Accountability Act - and “SB 261” - the Climate-Related Financial Risk Act. However, pursuant to a court order, CARB is not currently enforcing SB 261 while litigation seeking to block the rule continues in the US Court of Appeals for the Ninth Circuit. CARB noted that the regulation is limited to establishing a fee structure, defining key terms, and implementing a deadline for first-year reporting under SB 253. SB 253 requires US-based entities with a total annual revenue above $1 billion to report Scope 1 and 2 GHG emissions. CARB estimated fees to be between $2,000 and $7,000 per entity. The regulation’s definitions for the key terms “revenue”, “doing business in California”, “parent”, and “subsidiary” reflect those from the proposed regulation issued in December 2025. The regulation sets a compliance deadline of 10 August 2026 for the first year of reporting requirements under SB 253, for which CARB has exercised its enforcement discretion to not take enforcement action against entities that make a “good faith” effort to comply. For the regulation to become effective, CARB will need to respond to public comments in a Final Statement of Reasons and submit for approval a final rulemaking package to the California Office of Administrative Law, which will then need to file the regulation with the California Secretary of State. CARB is expected to issue subsequent rulemakings to establish reporting requirements for SB 253, including Scope 3 reporting for 2027 and onward as well as data assurance. For more information on California’s climate disclosure rules, see our Quick Guide.

On 10 February 2026, the New York Senate passed the New York Climate Corporate Data Accountability Act (CCDAA), which would mandate GHG disclosures for US-based companies with revenues greater than $1 billion. If enacted into law, the CCDAA would require companies to annually report Scope 1, 2, and 3 emissions, with reporting obligations for Scope 1 and 2 beginning in 2028 and Scope 3 beginning in 2029. The CCDAA would require the New York Department of Environment and Conservation to adopt implementing regulations by the end of 2027. The bill has now been introduced in the New York Assembly, where it will need to be passed before it can be signed into law by the Governor of New York.

On 6 February 2026, New York lawmakers introduced legislation aimed at preventing construction of new data centers for three years. The bill would prevent state and local governments from issuing permits for new data centers and retroactively target facilities designed to use at least 20 MW of electricity for at least three years and 90 days. The bill comes after a year of scrutiny of data centers and the rise of artificial intelligence infrastructure.

On 27 January 2026, Illinois lawmakers introduced the state’s first climate superfund bill, which would make emitters responsible for damage caused by their greenhouse gas emissions from 2020 to 2024. Funds from this bill would then be used to, in part, aid disadvantaged communities impacted by climate change. Currently, only two states—New York and Vermont—have passed similar laws, while California, Maryland, Massachusetts, New Jersey, and Oregon have also proposed similar bills in recent years.

Climate Change Litigation

On 23 February 2026, the Supreme Court of the US (SCOTUS) granted a petition to hear an appeal by two major oil companies alleging that the Supreme Court of Colorado ruled that the city and county of Boulder could sue and seek damages from the oil companies “for the physical and economic effects of climate change” under state law. Boulder claimed that the oil companies misled the public regarding the impacts of climate change while knowingly contributing to climate change by producing and promoting fossil fuels. SCOTUS will address (i) whether federal law precludes state law claims seeking relief for injuries allegedly caused by the effects of interstate and international GHG emissions on the global climate and (ii) whether SCOTUS has jurisdiction under both statutes and Article III to hear the case.

On 9 February 2026, a shareholder sued a multinational investment company and asset manager in the US District Court for the Eastern District of Texas, accusing its CEO and others of damaging the company’s reputation by participating in a scheme to raise coal prices. Specifically, the suit alleges that the company’s directors: (i) used the firm’s large coordinated coal holdings and climate initiatives to pressure coal companies to cut output while secretly applying environmental, social, and governance (ESG) voting to “non‑ESG” funds; (ii) ignored clear legal red flags despite their committee oversight roles; (iii) failed to disclose a major antitrust case and related risks to shareholders; and thereby (iv) breached their fiduciary and disclosure duties and enriched themselves through higher fees and compensation. The complaint seeks—among other things—damages for the company from its directors, disgorgement of the directors’ allegedly ill‑gotten compensation, and court‑ordered reforms to the company’s governance and compliance systems.

On 3 February 2026, the US District Court for the Western District of Texas held that the state cannot bar public entities from investing in or contracting with companies that “boycott” energy companies, stating doing so violates both the First and Fourteenth Amendments. The lawsuit challenged Senate Bill 13, a 2021 statute that imposes such a ban. The court stated that the law “permits the State to penalize companies for all manner of protected expression concerning fossil fuels”.

On 23 January 2026, the Michigan Attorney General filed a lawsuit in US District Court Western District of Michigan against major oil and gas companies, alleging that the companies acted as a “cartel” to hinder renewable energy and maintain dominance in the energy market. The complaint accuses the companies of conspiring to stall competition from renewable energy companies by abandoning renewable energy projects, using patent litigation to hinder rivals, suppressing information concerning the hidden costs of fossil fuels and viability of alternatives, infiltrating and knowingly misdirecting information-producing institutions, surveilling and intimidating watchdogs and public officials, and using trade associations to coordinate market-wide efforts to divert capital expenditures away from renewable energy. The claims are brought under Section 1 of the Sherman Act and Section 2 of the Michigan Antitrust Reform Act.

DEI Developments and Litigation

On 26 February 2026, the Office of the New York City Comptroller announced the settlement of a lawsuit filed eight days prior in the US District Court for the Southern District of New York by four public pension funds against a major telecommunications company for allegedly refusing to let shareholders vote on whether the company should be required to publicly disclose diversity data of its workforce. Specifically, the shareholder proposal centered around whether the company should be required to disclose a breakdown of its employees by race, ethnicity, and gender to the US Equal Employment Opportunity Commission (EEOC). In their complaint, the pension funds alleged that the company had been annually submitting such data to EEOC from 2021 to 2023 before stopping without explanation in 2024. In the settlement, the company agreed to allow the vote on the shareholder proposal in exchange for the dismissal of the lawsuit.

On 16 February 2026, the US District Court for the Eastern District of Pennsylvania granted a preliminary injunction to temporarily restore slavery exhibits removed by DOI and the National Park Service (NPS) from a Philadelphia memorial site and ordered the agencies to prevent any further changes at the site, pending litigation. The decision follows President Trump’s executive order issued in March 2025, directing DOI to take action to ensure that all public memorials do not contain content that “inappropriately disparage[s] Americans . . . and instead focus on the greatness of the achievements and progress of the American people or . . . the beauty, abundance, and grandeur of the [natural features of the] American landscape”. NPS removed 34 educational panels and deactivated their accompanying video presentations that referenced slavery from the memorial on 22 January 2026.

On 9 February 2026, a stipulation of dismissal between law students and EEOC was filed in the US District Court for the District of Columbia, regarding EEOC’s probe into the diversity, equity, and inclusion (DEI)-related employment practices of 20 large firms, where the plaintiff law students either applied or worked. EEOC initiated the probe on 17 March 2025 by sending letters to the firms requesting—among other things—hiring information for all law student or attorney job applications since 2019, including name, sex, race, contact information, academic performance, and compensation. The letters were sent after President Trump’s executive order issued on 21 January 2025, directing agencies to identify discriminatory DEI practitioners in the private sector. In the stipulation of dismissal, EEOC stated that the information provided in response to the letters did not include personally identifying information and that it considers “the matter of responding to those letters closed”. 

On 6 February 2026, the US Court of Appeals for the Fourth Circuit vacated a preliminary injunction enjoining the implementation of certain provisions of President Trump’s anti-DEI executive orders: “Ending Radical and Wasteful Government DEI Programs and Preferencing” and “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”. The provisions direct federal agencies to: (1) terminate DEI-related offices and positions, programs, grants, contracts, and performance requirements; (2) include terms in contract or grant awards requiring that contractual counterparties or grant recipients cannot operate any DEI programs that violate federal anti-discrimination laws and agree that its compliance with such laws are material to the government’s payment decisions. The court held that the plaintiffs did not sufficiently allege an injury-in-fact, as the provisions do not directly terminate contracts and only require compliance actions by federal agencies rather than directly requiring any non-governmental conduct. The decision is limited to a motion for emergency relief and not the underlying merits of the case, which will now be decided in the lower court upon remand.

On 5 February 2026, the US District Court for the Eastern District of Missouri granted a motion to dismiss filed by a multinational coffee company in an employment discrimination lawsuit. The court ruled that the Missouri Attorney General failed to provide evidence that the company violated federal or state anti-bias laws—specifically, evidence of “any actual adverse employment action undertaken as a result of unlawful discrimination”. The court held that allegations that the company adopted DEI policies is not enough to establish a justiciable claim without any evidence of “how those policies were actually enforced in a way that violated any law.” The Missouri Attorney General has appealed the dismissal.

On 4 February 2026, EEOC filed a subpoena enforcement action in the US District Court for the Eastern District of Missouri to compel an American footwear manufacturer to produce information related to allegations that the manufacturer discriminated against white employees. The action targets the manufacturer’s DEI-related targets and objectives in alleging that white employees were discriminated on the basis of their race in employment decisions, internship programs, and career development programs. The information includes: (i) criteria used in selecting employees for layoffs; (ii) information related to the manufacturer’s tracking and use of worker race and ethnicity data; and (iii) information about 16 programs which allegedly provided race-restricted mentoring, leadership, or career development opportunities.

On 30 January 2026, the Federal Trade Commission (FTC) sent letters to 42 law firms expressing antitrust concerns over the law firms’ DEI-related employment practices, specifically the participation in Diversity Lab’s Mansfield Certification program. The FTC stated that the letters are intended to “alert [law firms] to potential for liability under laws that the FTC directly enforces.” Diversity Lab has paused the program after many of its clients paused their work with the company amid federal scrutiny from the Trump administration, which has “substantially depleted” its operating funds.

Greenwashing Litigation

On 2 February 2026, the US District Court for the District of New Jersey dismissed claims by a proposed class of consumers alleging that multinational consumer health and pharmaceutical companies failed to disclose the presence of per- and polyfluoroalkyl substances (more commonly, “PFAS” or “forever chemicals”) in their products. The plaintiffs alleged that the companies’ advertising campaigns created a false impression that these products were PFAS-free. However, the court held that the plaintiffs did not sufficiently allege the presence of PFAS in the products or the harm that would be caused to product users.

• ESG Legal Outlook 2026
• EU Omnibus Tracker
• EU Directive on Empowering Consumers for the Green Transition: Transposition Tracker