ESG Newsletter – May 2026

Each year, Linklaters prepares a publication providing practical insights for Boards and GCs on emerging issues that we expect to be topical in the coming months. 

This includes a section on ESG and sustainability issues - with this year's core message: Boards must engage with sustainability from a strategic and financial perspective, asking not just “are we compliant?” but “are we exposed, and are we prepared?”.

To find out more, see our publication. 

Singapore: MAS’ transition planning guidelines: What banks, asset managers and insurers need to know

Join us for a webinar and panel discussion on Thursday, 28 May 2026 as we explore the Monetary Authority of Singapore’s new Guidelines on Environmental Risk Management – Transition Planning for banks, asset managers and insurers (the Guidelines). Our panel of Linklaters and industry experts will discuss the requirements for financial institutions under the Guidelines, key legal issues to bear in mind when implementing the Guidelines; and how financial institutions can take practical steps to prepare for implementation. 

Register here

Global: ISSB to develop practice statement on nature disclosures rather than a new standalone nature standard 

In April 2026, the International Sustainability Standards Board (ISSB) announced that it will not develop a standalone nature standard or amend the existing IFRS S1 or S2 to include nature-related provisions (see ISSB press release). Instead, the ISSB will publish an “IFRS practice statement”, setting out application guidance, related definitions and disclosure datapoints that report preparers can choose to apply if nature-related information is judged to be material. The ISSB intends to consult on an exposure draft in October 2026. Respondents will also be able to indicate their preference for the proposed measure versus developing standalone standards or integrating nature into the existing ISSB framework. The ISSB pointed out that the decision is not indicative of the importance that the ISSB regards nature topics, but to prevent disruption from the implementation of the existing ISSB standards. The ISSB has stressed that the existing standards already require the disclosure of nature-related information. IFRS S1 requires the reporting of material information on all sustainability-related risks and opportunities, and report preparers must also consider the relevance of industry-based SASB standards. And IFRS S2 requires reporting of nature-related material information that is associated with climate-related risks and opportunities. The ISSB’s work will draw on the framework developed by the Taskforce on Nature-related Financial Disclosures (TNFD). For more information on the ISSB and IFRS S1 and S2, see our ISSB Quick Guide. 

EU: EFRAG submits its work programme to the Commission 

EFRAG has submitted its Sustainability Reporting Work Programme 2026 to the European Commission. Article 29b of the Accounting Directive (as amended by the CSRD) requires the Commission to consult, at least once a year, with the Member States’ experts and the European Parliament on EFRAG’s work programme.

According to the programme, EFRAG’s key priorities for 2026 include developing sustainability reporting standards for non‑EU groups, continuing the SME ecosystem, providing implementation support, advancing interoperability with international standards (ISSB/SASB, GRI, GHG Protocol), and accelerating digitalisation, notably through XBRL taxonomy updates and the ESRS Knowledge Hub.

The work programme includes deadlines for the development of sustainability reporting standards. In particular, EFRAG is of the view that, in June 2026, the Commission will adopt the delegated act with the revised ESRS, as well as voluntary standards for out‑of‑scope companies.

The CSRD requires the Commission to adopt tailored ESRS for certain non‑EU companies operating in the EU (N‑ESRS) by 30 June 2026. EFRAG intends to consult on draft N‑ESRS from July 2026 for 100 days, and this will feed into technical advice to be delivered to the Commission by January 2027.

Work on ESRS digital workstreams will start in July 2026. EFRAG plans to release an updated ESRS XBRL taxonomy by December 2026.

EFRAG expects that, in 2026, implementation support activities will focus primarily on process design rather than the immediate issuance of new guidance. EFRAG will consult by the end of June/mid‑July 2026 on the priority topics that should be addressed in future implementation activities. However, it mentioned specifically that implementation support or illustrative material on anticipated financial effects will be prepared at the end of 2026.

EU: EBA supervisory reporting simplification: impact on ESG reporting

On 10 April 2026, the European Banking Authority (EBA) launched a consultation on a comprehensive package of measures aimed at simplifying supervisory reporting requirements for EU banks, including updates to ESG supervisory reporting requirements. The consultation builds on the Pillar 3 ESG disclosure ITS under Article 449a of the Capital Requirement Regulation (CRR3), which the EBA expects to publish in the “coming weeks”. While the CRR3 introduces new requirements that extends the scope of ESG supervisory reporting to all institutions, the EBA states that the framework proposed in the consultation incorporates proportionality measures so that the reporting burden remains proportionate with institutions’ size and complexity. At the same time the reporting requirements for large institutions have been simplified with some being streamlined and others removed. For more information, see our blog post. 

EU: Commission adopts RTS giving further clarity under the ESG Ratings Regulation

On 21 April 2026, the European Commission adopted the two Delegated Regulations supplementing the ESG Ratings Regulation: (i) Delegated Regulation with regard to RTS specifying the measures and safeguards to be implemented by ESG rating providers to separate their ESG rating activities from their other activities and (ii) Delegated Regulation with regard to RTS specifying the elements of ESG rating products to be disclosed to the public and to users of ESG ratings, rated items and issuers of rated items. ESMA consulted on these Regulatory Technical Standards (RTS) in May 2025 (see our previous blog post).

The European Parliament and the Council will now scrutinise the Delegated Regulations. If neither object, both will be published in the Official Journal of the EU and enter into force 20 days thereafter. They will both apply from 2 July 2026 to align with the ESG Ratings Regulation application date. For more information, see our blog post. 

EU: ESMA consults on ESG Ratings endorsement guidelines

The European Securities and Markets Authority (ESMA) has launched a consultation on draft guidelines of its proposed approach for the endorsement of ESG ratings developed outside of the EU under Article 11 of the ESG Ratings Regulation. The aim of the guidelines is to clarify what information and documents firms would need to submit when applying to endorse external ESG ratings. The endorsement provisions are designed to balance access to global ESG data with safeguarding market integrity and investor protection.

Under ESMA’s proposed approach, endorsed ESG ratings would need to meet requirements broadly equivalent to those applied to EU-authorised providers, including governance, methodology, and disclosure standards. ESMA explains that applications for authorisation to endorse ESG ratings can be submitted either as part of the initial application for authorisation or later following the authorisation. For more information, see our blog post. 

UK: call to join an FCA ESG ratings reporting pilot

The FCA has invited ESG rating providers to participate in a pilot scheme for its newly proposed reporting regime. This follows the FCA's publication of draft ESG rating provider requirements in December 2025 and the UK government's enactment of legislation in October 2025, which will place ESG rating providers under FCA supervision. 

The FCA states that the pilot aims to avoid unnecessary reporting burdens by assessing whether the proposed metrics are clear, feasible, proportionate, and suitable for supervisory purposes. For more information, see our blog post. 

EU: “One Europe, one Market” roadmap sets deadlines for key ESG and energy legislative files

President of the European Commission Ursula von der Leyen, Parliament President Roberta Metsola and Cypriot President Nikos Christodoulides, as head of the EU Council, signed a “One Europe, one Market” roadmap on 24 April 2026. The document sets a series of deadlines for adopting and agreeing key ESG and energy-related files.

The roadmap provides, in particular, that all Omnibus simplification packages put forward in 2025 should be agreed by the end of 2026. The Energy Omnibus proposal is scheduled to be published by the Commission in the third quarter of 2026, with political agreement targeted by the end of 2027.

The Industrial Accelerator Act should be agreed by the end of 2026. 

The Circular Economy Act proposal is still expected to be published in the third quarter of 2026, with final agreement by the third quarter of 2027.

A proposal for the review of the EU Emissions Trading System (EU ETS) is still expected to be published in the third quarter of 2026, with final agreement by the first quarter of 2027. Amendments to the Market Stability Reserve should be finalised by the end of 2026.

Proposals for the energy efficiency and renewable energy frameworks are scheduled for the third quarter of 2026, with final agreement pencilled in by the end of 2027.

AccelerateEU: Commission publishes key measures to achieve affordable and secure energy supply amidst global energy crisis 

On 22 April 2026, the European Commission published a Communication entitled “AccelerateEU – Energy Union: Affordable and Secure Energy through Accelerated Action”, which sets out the Commission’s crisis response to the conflict in the Middle East and the closure of the Strait of Hormuz. AccelerateEU combines short-term emergency tools and structural longer-term measures aimed at reducing dependency on volatile fossil fuel markets and building Europe’s resilience through homegrown clean energy and electrification. 

It includes the following measures:

• publication, by summer 2026, of an Electrification Action Plan, including a new electrification target, initiatives to increase the uptake of geothermal energy, biomethane and renewable hydrogen, measures addressing barriers for the electrification of the industrial, transport and building sectors, and the phasing out of fossil fuel subsidies. 

• presentation, on 13 May 2026, of a set of replicable measures to deliver energy savings and system efficiency gains, and to substitute fossil fuels with homegrown clean energy.

• a new legislative proposal on network charges and taxation in May 2026.

For more information, see our blog post. 

EU: Commission review confirms current EUDR text and sets out implementation measures

On 4 May 2026, the European Commission published a report on the simplification of the revised EU Deforestation Regulation (EUDR) and a set of further measures for its effective implementation. The package includes: (i) a report to the European Parliament and the Council; (ii) an updated guidance document and Frequently Asked Questions; and (iii) draft delegated act on the product scope of the EUDR. The Commission has decided to keep the existing wording of the EUDR unchanged in order to provide regulatory stability, instead of putting forward any further amendments. In addition, the Commission is presenting an updated implementing act on the Information System to Member States.

In December 2025, the European Parliament and Council adopted the revised text of the EUDR. The Regulation will apply from 30 December 2026 for large and medium companies, as well as for micro and small enterprises from the timber sector, and from 30 June 2027 for other micro and small enterprises. For more information on EUDR, see our Quick Guide. 

The report to the European Parliament and Council describes the simplification measures implemented since the EUDR entered into force in June 2023 and estimates that the cumulative measures will reduce annual compliance costs for companies subject to EUDR obligations by about 75% compared to the original Regulation. The Commission therefore concludes that the existing legal framework is now sufficiently streamlined and that the emphasis should shift from further simplification to facilitation and support. 

The updated guidance and FAQs address the topics most frequently raised by stakeholders, providing further clarification on obligations for the downstream supply chain and the simplified regime applicable to micro and small primary operators, covering topics such as e-commerce and geolocation. 

The draft delegated act proposes additions to the product scope, including soluble (instant) coffee and certain palm oil derivatives. It also proposes several exclusions of the scope, such as leather or retreaded tyres, as well as exemptions such as product samples, certain packing materials, used and second-hand products, and waste. It will be open for public feedback until 1 June 2026, although the feedback link has not yet been published. 

According to the press release, the Commission is updating the Information System to reflect the changes introduced by the revised EUDR. The updated draft implementing act on the Information System will be submitted to Member States before its adoption. Key developments include a simplified declaration form for micro and small primary operators, updated specifications for automated application interfaces, a contingency plan for unplanned unavailability, and a voluntary grouping feature introduced in response to requests from the business sector. The Information System is scheduled to reopen in June 2026.

EU: ECHA published SEAC and RAC opinions on universal PFAS restriction

For several years, EU Member States and EU institutions have been working on an EU-wide so-called universal restriction for PFAS (per- and polyfluoroalkyl substances) under the EU REACH Regulation. Review of the formal restriction proposal (or ‘restriction dossier’) by the European Chemicals Agency (ECHA) has been ongoing since the original restriction proposal was made. In March 2026, the ECHA published:

• the draft opinion of its Committee for Socio-Economic Analysis (SEAC) on the restriction proposal and opened a 60-day public consultation on its opinion. SEAC’s role has been to assess the proportionality of the restriction proposal by focusing on alternatives, costs, transition periods and sector.‑specific socio‑economic impacts. 

• the final opinion of the Committee for Risk Assessment (RAC) (already dating from 2 March 2026), which is the final-stage scientific assessment within the restriction process. It is RAC’s task to evaluate hazards, emissions and risks of a substance subjected to a restriction proposal, and RAC has now confirmed that PFAS warrant a group. 

Both RAC and SEAC agree that a broad PFAS restriction is necessary. While RAC favours a stricter approach (i.e., a full ban) from a scientific viewpoint, SEAC considers a ban with use-specific derogations as most appropriate, taking socio-economic proportionality into account.

SEAC and RAC are independent scientific bodies attached to ECHA, and are required to formulate opinions on restriction proposals which then serve as the basis for the European Commission’s final decision on adopting a restriction (which, in this case, would be by way of a legislative act amending Annex XVII REACH). For more information, see our blog post. 

EU: Directive on groundwater and surface waters pollution published in the Official Journal

On 20 April 2026, Directive (EU) 2026/805 of the European Parliament and of the Council of 30 March 2026, amending Directive 2000/60/EC establishing a framework for Community action in the field of water policy, Directive 2006/118/EC on the protection of groundwater against pollution and deterioration, and Directive 2008/105/EC on environmental quality standards in the field of water policy, was published in the Official Journal of the EU.

The Directive adds 25 new substances to the EU-wide priority substances list, including per- and polyfluoroalkyl substances (PFAS), pharmaceuticals and Bisphenol A, which is designated a priority hazardous substance. Neonicotinoids, pyrethroid pesticides, antibiotics and estrogenic hormones are also newly regulated. From 22 December 2027, stricter environmental quality standards will apply to 14 existing substances, and new groundwater quality standards for PFAS and pharmaceuticals will also apply. Compliance with the groundwater standards is required by 22 December 2039.

Member States are required to prioritise source-control measures when addressing chemical water pollution, placing greater pressure on companies to tackle pollution at the product design and manufacturing stage, including through reviews of existing permits and authorisations.

A new access to justice framework entitles members of the public, including non-governmental organisations (NGOs), to challenge court decisions related to water quality objectives and programmes of measures. The European Commission is also required to report by May 2029 on the feasibility of an extended producer responsibility mechanism, which could oblige manufacturers to contribute to the cost of water monitoring programmes where their products contain listed substances.

The Directive will enter into force on 10 May 2026 and must be transposed by Member States by 21 December 2027.

EU: Commission consults on implementation arrangements for the digital product passport registry

The European Commission has launched a public consultation on the implementation arrangements for the digital product passport (DPP) registry established under the Ecodesign for Sustainable Products Regulation (ESPR). The consultation is open until 27 May 2026.

DPPs must store detailed and up-to-date information about each product's environmental attributes, including its manufacturing process, materials used, energy efficiency, and disposal guidelines to boost transparency and enable consumers to make more informed purchasing decisions based on sustainability credentials. The ESPR requires the Commission to establish a secure digital registry for DPPs, storing at least the unique identifiers linked to each passport.

Each economic operator placing products on the market must complete an identity verification process before registering any DPP in the registry. Verified status lasts until the electronic identification means used by the operator expire, and in any event no longer than three years, after which a new verification must be carried out. Other value chain actors, such as repairers, refurbishers, remanufacturers and recyclers, must also obtain verified status before accessing the registry.

The registry will include a semantic repository, an API, a verification platform, a log system and an identification and authorisation scheme for users. The rules will apply to products covered by ESPR delegated acts, as well as batteries under the EU Sustainable Batteries Regulation, toys under the EU Toy Safety Regulation; construction products under the Regulation on marketing of construction products and detergents under the Regulation on detergents and surfactants. 

Thailand: SEC publishes consultation on regulatory framework for transition bonds and Thailand amber bonds 

On 10 April 2026, the Securities and Exchange Commission (SEC) published a consultation setting out a proposed regulatory framework covering requirements to support the issuance and offering of debt instruments with proceeds earmarked for promoting transition (the Proposed Framework). The Proposed Framework cover two types of debt instruments: (i) “Thailand Amber Bonds”, being debt instruments whose proceeds are designated for investment in “amber” activities, as defined under the Thailand Taxonomy; and (ii) “Transition Bonds”, being debt instruments whose proceeds are designated for investment in projects aligned with an issuer’s transition strategy or transition plan. The Proposed Framework also covers enhancements to ESG bond regulations to elevate disclosure standards, requiring issuers to prepare and disclose a bond framework and, in certain circumstances, appoint an external review provider to provide an opinion or assurance that the framework is aligned with the referenced standards, guidelines, or taxonomy recognised at the international or national level. The consultation closes on 11 May 2026. 

The Hong Kong Monetary Authority updates its Guideline on the Green and Sustainable Finance Grant Scheme

The Hong Kong Monetary Authority (the HKMA) has updated its Guideline on the Green and Sustainable Finance Grant Scheme (the Updated Guideline). The Green and Sustainable Finance Grant Scheme (the GSF Grant Scheme), which was originally launched in 2021, provides subsidies for the costs of eligible green and sustainable bond and loan issuances in Hong Kong. The guideline for the GSF Grant Scheme was previously updated in May 2024 with various enhancements, including an expanded scope to cover transition bonds and loans. In April 2026, the HKMA announced the Updated Guideline which took effect from 24 April 2026, and applies to all formal applications submitted on or after 24 April 2026 (irrespective of when the bonds are issued). 

The Hong Kong Monetary Authority issues circular on good practices on integrating climate-related risks into internal capital adequacy assessment process and capital planning

On 9 April 2026, the Hong Kong Monetary Authority (HKMA) issued a circular and annex entitled “Good practices on integrating climate-related risks into internal capital adequacy assessment process and capital planning”. As set out in the circular, the enhanced Supervisory Policy Manual module CA-G-5 on “Supervisory Review Process” set out HKMA’s expectation for authorised institutions (AIs) to incorporate climate-related considerations into their internal capital adequacy assessment process (ICAAP) and capital planning by 1 January 2026. In connection with this, a round of supervisory reviews was conducted by the HKMA on AIs’ implementation progress. The HKMA noted that many AIs have already begun integrating climate-related risks into their ICAAP and capital planning. The annex summarises the good practices and approaches that the HKMA observed from the recent supervisory reviews, for example, around identification of material climate-related risks; assessment of capital adequacy and needs; and use of ICAAP results. 

The Hong Kong Monetary Authority issues revised supervisory policy manual (SPM) Module IC-5 on “Stress-testing” including climate elements

On 13 April 2026, the Hong Kong Monetary Authority (HKMA) issued a revised version of the SPM module IC-5 on “Stress-testing”, as announced in a circular (the Updated Module).  The Updated Module requires banks to incorporate climate-related financial risks - covering both physical and transition risks - and scenarios into their programmes. The Updated Module makes it an explicit requirement (rather than a supervisory expectation) that AIs incorporate climate-related financial risks into their internal stress-testing programmes. This formalises what had previously been addressed largely through the separate GS-1 (Climate Risk Management) module and the two rounds of the sector-wide Climate Risk Stress Test (CRST). 

China publishes first comprehensive regulations on supply chain security 

On 7 April 2026, China’s State Council published the Regulations on Industrial and Supply Chain Security (the Regulations). The Regulations took effect immediately upon publication with no transition period. These mark China’s first comprehensive regulations on supply chain security. According to the Regulations, the relevant State Council departments will formulate and maintain a key sectors list. Raw materials, technology, equipment and products within those key sectors will be subject to stricter oversight, including information sharing, risk surveillance, risk prevention and emergency response measures. 

The Regulations also expressly stipulate that any supply-chain-related information collection activities, if in violation of Chinese laws and regulations, shall be subject to corresponding measures taken by the relevant authorities in accordance with the relevant provisions. Third-party due diligence and ESG audits are likely to be captured by this provision, which means that any foreign enterprise or its PRC subsidiaries conducting such activities within China must strictly comply with China’s laws, particularly those on personal information protection and cybersecurity.

Beyond information collection, the Regulations also equip Chinese authorities with tools to address foreign conduct that more directly threatens supply chain security. Where a foreign business violates normal market trading principles by interrupting customary transactions with Chinese counterparties, imposing discriminatory measures, or otherwise engaging in conduct that poses a substantial threat to China’s supply chain security, the relevant State Council departments may initiate a supply chain security investigation. Based on the outcome of the investigation, authorities may impose a range of measures against the foreign entity, including restricting its import and export activities relating to China, prohibiting its investment within China, barring domestic organisations and individuals from cooperating with it, and restricting its personnel from entering, working in or residing in China. Notably, these measures may also extend to PRC entities actually controlled by, or established and operated with the participation of, the foreign entity, such as joint ventures and wholly-owned subsidiaries. This gives the Regulation a potentially significant reach for multinational groups with China operations or exposure.

China issues opinion on advancing energy conservation and carbon reduction

On 11 April 2026, the General Office of the CCP Central Committee and the General Office of the State Council jointly issued the Opinion on Advancing Energy Conservation and Carbon Reduction at a Higher Level and with Higher Quality (the Opinion). The Opinion forms part of China’s broader efforts to advance its carbon peaking and carbon neutrality goals. Rather than introducing new headline targets, it emphasises improved policy execution, regulatory oversight and consistency across sectors and regions.

The Opinion sets out a range of measures affecting industrial activity, energy use and infrastructure development. The measures include tighter controls on high energy‑consuming and high‑emission projects, enhanced energy and carbon assessment requirements at the project approval stage, and more structured mechanisms for managing outdated or inefficient production capacity. On the energy system side, it reaffirms the commitment to reducing reliance on coal and oil whilst accelerating the development of non‑fossil energy, energy storage and new power system models. Sector‑specific measures are outlined for heavy industry, buildings, transport and digital infrastructure, covering energy efficiency upgrades, facility modernisation, and tighter monitoring and reporting of energy consumption and emissions.

More broadly, the Opinion signals a regulatory environment where energy efficiency and carbon performance are increasingly factored into permitting, pricing, procurement and certain financial support policies. This is particularly relevant for energy-intensive sectors and large infrastructure operators, such as industrial parks and data centres, and may affect the planning and assessment of new projects and expansions. Taken together, the measures reinforce energy consumption and emissions management as established components of the regulatory framework for entities operating in, or with exposure to, the China market.

Japan: FSA publishes roadmap for mandatory sustainability disclosures

On 9 April 2026, Japan’s Financial Services Agency (FSA) published a definitive roadmap establishing a framework for mandatory sustainability disclosures for companies listed on the Prime Market of the Tokyo Stock Exchange (TSE). Disclosures must be prepared in accordance with standards developed by the Sustainability Standards Board of Japan (SSBJ), which are based on those of the International Sustainability Standards Board (ISSB) (for more information, see our Quick Guide). Implementation is phased by market capitalisation: companies with a market capitalisation of JPY3 trillion or more are required to begin mandatory disclosure from the fiscal year ending March 2027; those with a market capitalisation of between JPY1 trillion and JPY3 trillion will follow from March 2028; and those in the JPY500 billion to JPY1 trillion range from March 2029. Mandatory third-party assurance will apply one year after the disclosure requirement takes effect for each respective cohort. The framework adopts a “profession-agnostic” approach to third-party assurance, permitting both audit firms and specialised providers to register as assurance providers, subject to registration, quality control, and independence requirements. The framework also introduced a comprehensive set of rules and oversight mechanisms to ensure effective inspection and supervision of assurance providers by the FSA. Separately, on 31 March 2026,  the SSBJ published a mapping of the divergences between its standards and those of the ISSB, following investor feedback during consultation on earlier draft standards which urged greater consistency between the two frameworks.

Japan: Draft revisions to Corporate Governance Code open for consultation

Japan’s Financial Services Agency (FSA) and the Tokyo Stock Exchange (TSE) have released draft revisions to Japan’s Corporate Governance Code for public consultation, being the first update since June 2021. The revised code shifts focus from short-term shareholder returns to long-term value creation, with boards required to adopt a “growth-oriented governance” approach encompassing investment in research and development, human capital, and intangible assets. Prime Market companies must appoint at least one-third of their directors as independent directors, rising to a majority where a controlling shareholder exists. New requirements include the publication of a board skills matrix and enhanced diversity standards covering gender, international experience, age, and cultural background. The code retains its “comply or explain” basis, with the FSA cautioning against boilerplate explanations of non-compliance. The consultation closes on 15 May 2026, with the final version expected by summer 2026 and listed companies required to submit their first governance reports under the revised code by July 2027. 

Federal Agency Actions

• On 17 April 2026, the U.S. Department of the Interior (DOI) and the Bureau of Reclamation announced emergency actions to stabilize the Colorado River system, which long-term drought has reduced to approximately 36 percent of storage capacity, threatening water and power supplies for more than 40 million people. The Bureau of Reclamation will release between 660,000 acre-feet and one million acre-feet from Flaming Gorge Reservoir over the following year and reduce annual releases from Lake Powell to Lake Mead through September 2026. The announcement coincides with the expiration of the existing Colorado River operating agreements at the end of 2026; in the absence of consensus among the seven basin states on a successor framework, DOI has indicated it will determine post-2026 operations following completion of the applicable environmental review process.

• On 16 April 2026, the U.S. Environmental Protection Agency (EPA) launched the Water Reuse Action Plan 2.0, a second iteration of the initiative first established in 2020, designed to accelerate water reuse across key economic sectors including auto manufacturing, food and beverage production, agriculture, component fabrication, microchip fabrication, data center cooling, electricity generation, and energy development. The plan is characterized not as a federal regulatory mandate but as a collaborative framework under which the EPA and its federal partners support states, local communities, private industry, and the water sector in advancing water reuse strategies. The stated goal of the plan is to lower water costs and improve the reliability and predictability of water supply as an input for sectors that depend heavily on water access, with particular emphasis on microchip fabrication and data centers.

• On 15 April 2026, health and environmental groups filed a petition with the EPA, challenging the agency’s rule issued on 18 February 2026, titled “Rescission of the Greenhouse Gas Endangerment Finding and Motor Vehicle Greenhouse Gas Emission Standards Under the Clean Air Act.” Through the rule, the EPA made six key greenhouse gases no longer legally required to be regulated under the Clean Air Act and repealed emission standards for light-, medium-, and heavy-duty vehicles. The petition challenges both rescissions, alleging that the EPA relied on flawed methodology and committed technical errors in reaching them.
• On 15 April 2026, Energy Secretary Chris Wright testified during a budget hearing that the U.S. Department of Energy (DOE) had completed its review of 2,271 projects granted funding under the Biden Administration and it intends to retain or modify 1,951 (or 85 percent) of them. The DOE’s project review follows its October cancellation of more than 321 financial awards for 223 projects.
• On 6 April 2026, the EPA finalized discrete technical amendments to the 2024 methane rule for the oil and gas sector in response to petitions for reconsideration. The amendments extend the default temporary flaring window from 24 to 72 hours for situations including malfunctions, safety incidents, and repair and maintenance activities, with a backstop requirement obligating operators to cease flaring as soon as the precipitating incident is resolved. The amendments also include technical updates to the rule’s net heating value monitoring and testing requirements, which industry groups had sought.

• On 3 April 2026, DOI announced the start of a phased plan to establish the Marine Minerals Administration, bringing together the functions of the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement under a merged, unified structure. The stated purpose of the reorganization is to improve coordination and increase efficiencies across offshore leasing, permitting, inspections, and environmental oversight. All statutory authorities and protections will remain in place throughout the transition.

Congressional Actions

• On 20 April 2026, Senators Ted Cruz, Tom Cotton, Ted Budd, and Mike Lee introduced the Stop Climate Shakedowns Act of 2026 in the U.S. Senate, with companion legislation introduced in the House by Representative Harriet Hageman. The bill prohibits any climate suit - defined broadly to include actions seeking damages, injunctive relief, abatement, or restitution for harms attributed to climate change - from being filed or maintained in any federal or state court, with pending actions to be immediately dismissed upon enactment. The bill additionally voids all state energy penalty laws and establishes federal exclusivity over the regulation of greenhouse gas emissions, on the stated basis that state-level climate liability efforts encroach upon the exclusive jurisdiction of the federal government and that attributing local weather events to individual energy producers lacks scientific credibility.

• On 16 April 2026, the U.S. Senate passed a joint resolution of congressional disapproval overturning a January 2023 Bureau of Land Management rule that had withdrawn approximately 225,504 acres of the Superior National Forest in northern Minnesota from mineral and geothermal leasing for a 20-year period. Pending Presidential signature, areas in the Boundary Waters of northeastern Minnesota are now effectively open to provide federal leases for mining operations. The Biden-era withdrawal had been initiated in response to concerns regarding the potential impacts of mineral development on the Rainy River watershed, including the Boundary Waters Canoe Area Wilderness and lands within the 1854 Ceded Territory of the Chippewa Bands. The resolution, which renders the underlying rule of no force or effect, now proceeds to the President for signature, which is expected given the administration’s previously expressed support for the measure.

State Actions

• On 24 April 2026, Maine Governor Janet Mills vetoed legislation that would have imposed a moratorium on state and municipal permitting of data centers with a load of 20 megawatts or more through November 2027 and established a 13-member council to study data center siting considerations - including impacts on ratepayers, grid reliability, and the environment - with a report due by February 2027. The Governor stated she supports both the moratorium and the study council in principle but vetoed the bill on the ground that it failed to exempt a $550 million data center redevelopment project at the former Androscoggin Mill in the Town of Jay - a brownfield site whose closure had eliminated an estimated 22 percent of the town’s tax base - which has received strong local support and several permits and is expected to generate over 800 construction jobs and at least 100 permanent positions. The Governor announced she will issue an executive order establishing a council to examine the impact of data centers in Maine. The Governor also announced that she has signed legislation prohibiting data center projects from qualifying for the state’s business development tax incentive programs.

• On 21 April 2026, Colorado’s Energy and Carbon Management Commission approved, in a three-to-two vote, the State Sunlight-Long fracking site on land owned by a local ranch in Arapahoe County following a final review hearing on alternative site locations. The initial proposal for 32 horizontal oil and gas drilling wells - since reduced to 24 - was first submitted in 2022 by a large oil and gas company and its subsidiary as part of a comprehensive area plan for the ranch, a 26,000-acre trust that includes the Aurora Reservoir. The proposed site is located approximately half a mile from the reservoir. The approval followed a year-long public engagement process during which community stakeholders raised concerns regarding potential environmental and health risks. Proponents of the site argued that the Sunlight-Long location is the safest of the 11 identified well-pad locations. Those opposing the approval indicated they may pursue further legal or regulatory remedies.

• On 14 April 2026, Virginia Governor Abigail Spanberger signed legislation formally re-enacting the Commonwealth’s participation in the Regional Greenhouse Gas Initiative (RGGI), the multi-state cap-and-trade program covering power sector emissions, following an earlier budget provision signed on 20 February 2026 directing all state agencies to take the steps necessary to rejoin the program. Virginia originally joined RGGI in 2021, until then-Governor Glenn Youngkin issued an executive order withdrawing the state’s participation in 2023. The withdrawal was subsequently ruled unlawful by a court but remained in effect pending appeal. The standalone legislation clarifies that participation in RGGI is and always has been a statutory requirement, closing the legal gap previously used to exit the program and making it more difficult for future administrations to withdraw through regulatory action alone. The state’s Department of Environmental Quality is required to repeal the 2023 exit regulation and reinstate the prior participation regulation within 90 days, with Virginia expected to formally re-enter the program by late May 2026.

• On 25 March 2026, three Delaware state agencies - the Delaware Department of Natural Resources and Environmental Control, the Delaware Health and Social Services, and the Delaware Department of Agriculture - published two strategic environmental plans: the 2026 Strategic Framework for Contaminants of Emerging Concern (Strategic Framework) and the 2026 PFAS Implementation Plan (PFAS Implementation Plan). These plans address contaminants that pose risks to human and environmental health.

  The Strategic Framework establishes monitoring and mitigation goals for contaminants of emerging concern (CECs), which are naturally occurring or synthetic substances known or expected to pose risks to human and environmental health, such as microplastics or pesticides. The Strategic Framework prioritizes the use of emerging technologies for CEC detection in water, air, and wildlife, with emphasis on source reduction, remediation of existing contamination sites, and community engagement. The Strategic Framework reflects Delaware’s interest in expanding its regulatory framework beyond current federal standards.

  The PFAS Implementation Plan, the first implementation plan developed under the Strategic Framework, expands upon the state’s existing efforts to track and reduce perfluoroalkyl and polyfluoroalkyl substances (PFAS) in state drinking water. The PFAS Implementation Plan identifies funding sources for PFAS remediation, including the State Revolving Fund, federal funding, and private funding. The PFAS Implementation Plan also establishes annual reporting requirements and is subject to review every five years.

• On 7 March 2026, the Wyoming legislature enacted legislation creating the Wyoming Energy Dominance Fund, to be administered by the Wyoming Energy Authority, which will provide grants and loans—on a minimum 1:1 matching basis—for applied research, demonstration, and commercial development projects in coal, natural gas, enhanced oil recovery, pipeline infrastructure, uranium conversion and enrichment, fuel fabrication, and rare earth and critical mineral processing. The fund excludes wind and solar projects. The fund is to be capitalized through a reallocation of state severance tax revenues beginning in fiscal year 2027, capped at $105 million in that year, and is set to sunset on 31 December 2028. The legislation builds on an earlier commitment under the same framework: in December 2025, the Wyoming Governor and the Wyoming Energy Authority awarded $100 million in Large Project Energy Matching Funds to BWX Technologies, Inc. (BWXT) to support the development of a tri-structural isotropic nuclear fuel fabrication facility, which, upon completion, would be the first nuclear fuel fabrication facility constructed in the United States in several decades. BWXT is expected to invest more than $400 million in the project, satisfying the statutory minimum 1:1 match requirement.

• On 23 March 2026, Utah governor Spencer Cox signed HB 222, a new law protecting individuals in the state from civil or criminal liability for the climate change effects of greenhouse gas emissions except if they violate a specific greenhouse gas regulation or the terms of a permit. In order to hold a polluter liable under the law, the plaintiff must demonstrate by clear and convincing evidence that the defendant’s actions are or will be a direct cause of unavoidable and identifiable damage. The bill will go into effect on May 6, 2026.

• Throughout late 2025 and the first quarter of 2026, several states moved to accelerate large-scale clean energy development, with a number explicitly targeting renewable energy projects eligible for expiring federal clean energy tax credits. New York directed state agencies to streamline permitting, interconnection, and financing for such projects, and launched a new renewable energy solicitation. Oregon passed legislation exempting solar, wind, geothermal, and marine energy facilities from site certificate requirements for projects attempting to qualify for applicable federal tax credits if construction commences by the end of 2028 and the facility is placed in service by the end of 2030. In Colorado, the state Public Utilities Commission approved up to 4,100 megawatts of new generation capacity - comprising solar, storage, wind, and natural gas - through an expedited proceeding established specifically to capture expiring federal tax credits. In California, the Public Utilities Commission approved a new procurement decision requiring electricity providers to secure 6,000 megawatts of new clean energy and storage capacity in equal tranches by 2030, 2031, and 2032. In New Jersey, executive orders declared a state of emergency on utility costs, froze near-term rate increases, and directed the acceleration of new solar, storage, and nuclear generation.

ESG Litigation

• On 24 April 2026, a coalition of ten states, as well as the District of Columbia, Harris County, Texas, and the City of New York - led by California - filed suit against the EPA, alleging that the EPA missed its statutory deadline to designate areas of the country as meeting or not meeting the 2024 national soot standard, a rule the EPA itself promulgated on the basis that the prior standard was insufficient to protect public health. Without those designations, the coalition argues, states and local governments are left without the regulatory tools Congress intended them to have to reduce soot levels in their communities - and the standard cannot be fully implemented. The coalition is seeking a court order requiring the EPA to issue the overdue designations within 150 days, noting that although the EPA has separately sought to have the 2024 standard vacated in the D.C. Circuit, that court has not granted the request, leaving the standard and the EPA’s obligations under it in place.

• On 21 April 2026, Chief Judge Casper of the U.S. District Court for the District of Massachusetts issued a preliminary injunction blocking five federal agency actions challenged by a coalition of renewable energy industry associations as inconsistent with federal statutes governing energy permitting on federal lands and waters. The enjoined actions include a DOI memorandum imposing an open-ended internal review process for wind and solar permitting, a restriction on developer access to the U.S. Fish and Wildlife Service’s environmental screening platform, the DOI Secretary’s Order No. 3438 directing permits to prioritize land-efficient energy sources, an Army Corps of Engineers memorandum deprioritizing wind and solar permit applications, and a Solicitor’s M-Opinion (a formal memorandum opinion issued by DOI’s Solicitor) reinstating a stricter legal standard for offshore wind projects that superseded the framework under which developers had made substantial prior investment. The court found that the agencies failed to adequately justify the challenged actions and that several conflicted directly with applicable federal statutes. By operation of the injunction, federal agencies must revert to prior permitting procedures.

• On 17 April 2026, the U.S. Supreme Court vacated a Fifth Circuit judgment in a suit alleging that an oil and gas company’s operations caused coastal land loss and environmental degradation in Louisiana. The company invoked the federal officer removal statute to remove the environmental suit brought against it in Louisiana state court to federal court, arguing that the suit was removable because it implicates the company’s crude oil production during the Second World War, when crude oil was also refined into aviation gasoline for the U.S. military. The Fifth Circuit concluded that the suit was not removable based on its conclusion that the suit was not “for or relating to” the company’s performance of federal duties since the aviation gas refining contract did not specify how to acquire crude oil. The Supreme Court ruled that the Fifth Circuit erred in this conclusion and remanded the case for further proceedings.

• On 13 April 2026, a proxy advisory company filed a lawsuit in the U.S. District Court for the Southern District of Indiana challenging Indiana’s recently promulgated statute, H.B. 1273, which is scheduled to take effect on 1 July 2026. The statute imposes a disclosure regime on proxy advisors whenever they issue anti-management recommendations, including those related to ESG, with the specific obligations depending on whether the recommendation is based on a statutorily defined “written financial analysis.” Under the statute, a recommendation qualifies as being based on a “written financial analysis” only if it constitutes a written document that: (1) analyzes the short-term and long-term financial benefits and costs of the proposal; (2) concludes what vote or course of action is most likely to positively affect interest holder value; and (3) explains the method and processes used to prepare the analysis, including the experience and geographic location of the personnel who formed the conclusion. The complaint argues that many issues that generally come up for a shareholder vote do not lend themselves to financial prediction and that different clients have differing views about the “best” way to advance shareholder value. The plaintiff requests both preliminary and permanent injunctive relief enjoining enforcement of the law, alleging that the statute is an unconstitutional exercise of state power.

• On 13 April 2026, environmental and health groups filed suit against the EPA in the U.S. District Court for the Northern District of California. The dispute stems from a final rule issued by the EPA on 7 February 2024, in which the agency strengthened national ambient air quality standards. The plaintiffs allege that under the Clean Air Act, the issuance of that rule triggered a non-discretionary duty requiring the EPA, within two years, to: (1) promulgate designations of all areas in the United States as either meeting or not meeting the new air quality standards; and (2) publish notice of those designations in the Federal Register. The plaintiffs further allege that as of 7 February 2026, the EPA had failed to promulgate the required designations, in violation of the statutory deadline. The plaintiffs seek a declaratory judgment and an order compelling the EPA to complete the mandatory designation process.
• On 7 April 2026, plaintiffs filed a class action complaint in the U.S. District Court for the Southern District of California against Keurig Dr Pepper, Inc. (Keurig), alleging that the company falsely advertises its K-Cup single-use beverage pods as recyclable when most recycling centers in the United States are unable to process them. This is not the first time Keurig has faced scrutiny over these claims. On 10 September 2024, the U.S. Securities and Exchange Commission charged Keurig with making inaccurate statements regarding the recyclability of its K-Cups. Keurig agreed to settle those charges by consenting to a cease-and-desist order and paying a $1.5 million civil penalty. The complaint alleges that Keurig is aware that consumers’ purchasing decisions are influenced by concerns about the environmental impact of the products they buy, and that despite this awareness, the company has continued to market its K-Cups as recyclable even though they are practically non-recyclable.

DEI Developments

• On 10 April 2026, International Business Machines Corporation (IBM) entered into a settlement agreement with the U.S. Department of Justice (DOJ), agreeing to pay over $17 million to resolve allegations that it violated federal anti-discrimination requirements. As a federal contractor, IBM was obligated to comply with anti-discrimination requirements under Title VII of the Civil Rights Act of 1964. The DOJ alleged that IBM engaged in a range of discriminatory employment practices based on employee race, color, national origin, or sex, including modifying or adjusting employee pay in a manner that caused employees to factor in these characteristics; considering these characteristics when making decisions to hire, transfer, or promote employees; setting demographic goals for individual business units; and restricting access to training programs, mentorship opportunities, partnerships, leadership development programs, and other educational resources on the basis of the same criteria. The DOJ further alleged that IBM knowingly submitted false claims and made false statements to the federal government when certifying compliance with anti-discrimination requirements in its federal contracts. IBM agreed to the settlement without admitting liability and denied that it engaged in any of the alleged conduct.
• On 26 March 2026, an Assistant Attorney General for the DOJ announced that the agency had launched investigations into Stanford University, Ohio State University, and the University of California, San Diego for possible discrimination in their admissions practices. The DOJ had signaled this enforcement approach in January 2026 when it joined a lawsuit alleging that the University of California, Los Angeles medical school was engaging in race-based admissions practices in violation of the Equal Protection Clause, as interpreted by the Supreme Court in Students for Fair Admissions v. Harvard. Universities found to be in violation of anti-discrimination law risk being cut off from significant federal funding.

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