ESG Newsletter – June 2026

EU Corporate Sustainability Due Diligence Directive: impact of CSDDD on non-EU companies

The Corporate Sustainability Due Diligence Directive (CSDDD or CS3D), after recent amendments introduced by the Omnibus I Directive, will apply to all in-scope companies from 26 July 2029. This will affect non-EU companies, both directly if they have sufficiently large businesses operating in the EU and indirectly if they form part of the value chain of a company in scope of the CSDDD. Mapping EU exposure, risk hotspots and the impact on growth plans now will help businesses outside the EU avoid last-minute compliance work and protect key EU relationships. In our blog post, we consider how the CSDDD is likely to impact companies outside the EU, and how they can prepare.

Read our blog post

Webinar: Green claims under scrutiny: What the EU’s Directive on “Empowering Consumers for the Green Transition” means for businesses

The EU’s Directive on Empowering Consumers for the Green Transition (EmpCo / ECGT) significantly tightens the rules around environmental claims, the use of broad or generic “green” statements, and product durability information. Join our Litigation and ESG experts - Jessica Radke, Kathrin Bauwens and Iyesogie Igiehon - on Tuesday 9 June 2026 at 12:00-13:00 BST as they discuss what the Directive does, how it fits alongside wider EU and UK action on greenwashing, and where businesses are most likely to feel the impact in practice, from marketing and labelling to customer communications and litigation risk. 

Register here  

Webinar: The intersection of energy security, geopolitics and markets 

Recent developments in the Middle East are driving significant disruption across global energy supply, policy responses and market dynamics. As part of the first instalment of The Global Link Series | Scenarios Shaping the Boardroom, Chris Staples will moderate a discussion on Wednesday 10 June 2026 at 13:00 - 14:00 BST featuring two leading voices as they explore the intersection of energy security, geopolitics and global markets - Meghan O’Sullivan (Jeane Kirkpatrick Professor and Director of the Geopolitics of Energy Project, Harvard Kennedy School) and Stephen D. King (Senior Economic Advisor, HSBC). 

This session will focus on impacts from the Hormuz Strait closure, policy levers and how organisations are navigating volatility and planning for the next 12 - 24 months, with a particular focus on implications on energy supply and critical global supply chains; Government interventions (energy markets, sanctions and allied corridors); knock-on effect (fiscal and monetary policy); and what next for growth, capital allocations and the defence nexus. 

Register here

EU CSRD: revised ESRS and ESRS for voluntary use published for consultation

On 6 May 2026, the European Commission launched two consultations:  (i) the consultation on the revised European Sustainability Reporting Standards (ESRS); and (ii) the consultation on the Sustainability Reporting Standard for Voluntary Use. Both consultations close on 3 June 2026. Commission adoption of both the revised ESRS and voluntary standards is planned for Q2 2026. After the consultations and adoption of both standards by the Commission, they will be subject to scrutiny by the Council and the European Parliament for two months (extendable by two additional months). If neither institution objects within the review period, the revised ESRS will be adopted in final form and will take effect in Member States’ laws. For more information, see our blog post. 

TISFD publishes draft social disclosure framework

The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) was established in 2025 as a global, multi-stakeholder initiative to help businesses and financial institutions understand and report on impacts, dependencies, risks and opportunities related to people. On 26 May 2026, it released for consultation the draft TISFD Framework (see also executive summary). This version includes: (i) conceptual foundations; (ii) proposed general requirements; (iii) draft disclosure recommendations; and (iv) areas for future development. Future editions will include a set of recommended metrics and implementation guidance.

Like the similarly structured Task Force on Climate-related Financial Disclosures (TCFD) and Taskforce on Nature-related Financial Disclosures (TNFD), the TISFD Framework is underpinned by four pillars: governance; strategy; impact and risk management; and metrics and targets. The disclosure recommendations are further underpinned by five general requirements: materiality; system-relevant information; stakeholder engagement; scope; and time horizons. 

Disclosure topics in the TISFD Framework cover areas ranging from human rights, labour rights and well-being to inequality and human and social capital. Reporting recommendations cover impacts on an organisation’s own workforce, workers in the value chain, consumers, end-users, and communities. 

The TISFD Framework is drawn on existing standards including the ISSB Standards, GRI Standards and ESRS, and adopts a building blocks approach, ensuring it can be used as a standalone framework and also to complement existing standards and practices. 

Stakeholders are invited to provide feedback on the draft TISFD Framework by 31 July 2026. A final version of the framework is expected to be announced in 2027. 

EU: SFDR 2.0 - the key milestones ahead

The European Commission’s legislative proposal to overhaul the EU SFDR is a key regulatory development for asset owners and managers, and the process continues on its anticipated timeline. Important milestones in the coming weeks look set to provide some much-needed clarity on the direction of travel for market participants (for whom preparation for any changes to the existing regime is a priority). On 3 June, the European Parliament’s Economic and Monetary Affairs Committee (ECON) are set to discuss Rapporteur MEP Gerben-Jan Gerbrandy’s proposals (set out in his draft report dated 28 April) on the European Commission’s original position. The European Parliament will then vote on the proposals in a plenary session in Q3 (with the vote currently scheduled for 15 July) with a view to finalising its negotiating position, in readiness for trilogues between the Parliament, Council and Commission to begin. The Council of the EU is also in the process of developing its negotiating position, with the Cypriot Presidency of the Council having indicated that it aims to settle its position by end of June (before the Presidency passes to Ireland). Trilogue negotiations will determine the final text – these are expected to commence in Q4, with final agreement anticipated by the end of the year. For more information on what the Parliamentary draft tell us so far about the direction of travel, see our blog post. 

EU: ESMA encourages regulatory supervisors to adopt a ‘proportionate approach’ to firms implementing MiFID II sustainability requirements

In a statement published on 6 May 2026, ESMA encourages regulatory competent authorities to adopt a “proportionate supervisory approach” to firms implementing their MiFID II sustainability requirements and encourages dialogue to address issues during the transition period, rather than prioritising enforcement actions, unless the case involves clear breaches or mis-selling. The invitation is highlighted in the statement, in which ESMA presents the results of its Common Supervisory Action which took place over the course of 2024 and 2025 looking at the integration of sustainability in firms’ suitability assessment and product governance processes and procedures. For more information, see our blog post. 

EU: ECB updates compendium of good practices for climate and nature-related risk management and stress testing

The ECB has updated its compendium of good practices for climate and nature-related risk management and stress testing.  This takes the form of two separate reports published on 8 May 2026: 

(i) The ECB report on good practices for climate and nature-related risk stress testing presents a collection of good practices observed over five years of supervisory activities concerning the integration of banks’ climate and nature-related risk stress-testing capabilities, in particular in light of the expectations set out in the ECB’s 2020 Guide on climate-related and environmental risks. In particular, the report offers support in addressing Expectation 11 of the Guide, which focuses on the necessity to adequately incorporate climate and nature-related risks into banks’ stress-testing frameworks. The report concludes by acknowledging the progress banks have made in stress testing climate and nature-related risks, but also recognises the increasing materiality of these risks, which necessitates further improvements. 

(ii) The second report, entitled Good practices for climate and nature risk management – observations from the ECB’s five-year climate and nature risk programme (2020-25) comes in the wake of the ECB having set a deadline for the end of 2024 for institutions to achieve full alignment with its expectations on managing climate and nature risks.  The report shares the ECB’s observations on good practices illustrating different ways in which banks could strengthen their management of climate and nature risks. 

For more information, see our blog post. 

EU: ESMA publishes new Q&As providing clarification on ESG Ratings Regulation

On 26 May 2026, ESMA published five new Q&As providing clarification on the ESG Ratings Regulation. The Q&As cover:

• what practical components an ESG rating should feature to demonstrate the existence of a defined ranking system of rating categories (Q&A 2853);

• the different registration pathways for ESG rating providers in advance of the date of application of the ESG Ratings Regulation on 2 July 2026 (Q&A 2854);

• which ESG rating providers established after 1 January 2025 (date of entry into force) can benefit from the transitional regime (Q&A 2855); and

• what is meant by “any material changes” to registration information for ESG rating providers (Q&A 2856) and for external reviewers (Q&A 2857).

EU: Commission adopts Delegated Regulation on ratings provider authorisation and recognition under ESG Ratings Regulation

On 26 May 2026, the European Commission adopted a further Delegated Regulation setting out regulatory technical standards (RTS) supplementing the ESG Ratings Regulation. These RTS specify the information to include in an application for authorisation or recognition to operate in the EU as an ESG rating provider under Articles 6(3) and 12(9) of the ESG Ratings Regulation. The RTS identify the common information required for applications of EU and non-EU entities, and what additional information should be provided by non-EU entities in an application for recognition. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation. Provided that neither objects, the RTS will enter into force on the day following its publication in the Official Journal of the European Union. It will apply from 2 July 2026.

EU Prospectus Regulation: New ESG bond disclosure requirements - what issuers need to know

The EU Listing Act, amending the EU Prospectus Regulation (PR), entered into force in December 2024. However, certain amendments which were reliant on delegated acts, were scheduled to be phased in over the following 18 months. This includes, in particular, prospectus disclosure requirements for bonds “advertised as taking into account ESG factors or pursuing ESG objectives”, which apply from 5 June 2026. On 7 May 2026, the Commission published its adopted Delegated Regulation (the DR) amending Delegated Regulation (EU) 2019/980 as regards the standardised format and sequence and the streamlined content, scrutiny and approval of the prospectus. This contains the detailed disclosure requirements for prospectuses under the PR and, in particular, the new disclosure requirements for prospectuses which reference ESG Bonds. The DR has been delayed and is subject to a scrutiny period by the European Parliament and Council of the EU which has not yet concluded. This presents a legislative gap. To address this gap, ESMA issued a statement on 7 May 2026 providing non-binding guidance about the legal requirements for prospectuses during this interim period. In particular, ESMA noted that from 5 June 2026, stakeholders should use the provisions in the DR as adopted by the Commission on 7 May 2026 in determining what more granular disclosure is necessary to satisfy the PR requirements. See our blog post for an overview of the disclosures applicable to ESG Bonds under the PR from 5 June 2026 pursuant to the DR (as adopted by the Commission on 7 May 2026). 

UK: FCA’s Transition Finance Pilot and the future of UK climate finance

On 21 May 2026, the Financial Conduct Authority (FCA) published the findings from its Transition Finance Pilot, which was a market engagement exercise to examine barriers to scaling finance for climate solutions and to identify practical actions to address them. The FCA has found the barriers to transition finance as systemic rather than limited to any single regulatory constraint. The FCA did not identify material barriers within its own regulatory remit and does not consider there to be a need for new rules or changes to existing rules as a result of this work. Despite this, the FCA report identifies a set of system-level challenges that are holding back the efficient flow of capital to climate solutions, and it sets out a clear direction of travel for market participants. With the UK competing globally to be the leading hub for transition finance, the FCA report is relevant to capital providers, climate solutions companies, and insurers in the UK and further afield. For more information, see our blog post.

EU Directive on Empowering Consumers for the Green Transition: Commission updates its FAQs

The Empowering Consumers for the Green Transition Directive (also known as the EmpCo or ECGT Directive) will start applying from 27 September 2026. From that date, companies must ensure that their commercial practices (including green claims and use of sustainability labels) comply with the requirements introduced by the new rules, including for products already on the market. Against that backdrop, on 18 May 2026, the European Commission published an updated version of its FAQs. The first edition of that document, published in November 2025, provided the preliminary views of the Commission on the practical application of the new framework. While the updated version is, at first glance, almost identical, it provides clarifications relating to environmental claims in brand, product and company names. For more information, see our blog post. 

New Zealand plans legislative change to shield polluters from climate litigation

The New Zealand government has announced plans to amend the Climate Change Response Act to prevent findings of tortious liability for harm caused by greenhouse gas emissions, citing the uncertainty that ongoing litigation has created for business confidence and investment. The proposed changes will apply to both current and future proceedings, including a claim brought by climate campaigner Mike Smith against several major companies (including Fonterra, Genesis Energy, Z Energy, and New Zealand Steel) alleging public nuisance arising from their emissions, which is due to be heard in the High Court next year. The government's position is that climate change is best addressed through the regulatory framework Parliament has already enacted, and that tort law is ill-suited to resolving claims involving the complex environmental, economic, and social factors inherent in climate-related harm.

Hong Kong’s Cross-Agency Steering Group releases first sector-specific transition finance operational guide for the tech sector 

On 15 May 2026, the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group (the Cross-Agency Steering Group) published the first sector-specific Transition Finance Operational Reference Guide (the Guide) focused on the information and communications technology (ICT) sector. The publication is the first in a series of sector-specific guides. The first-phase Guide focuses on entity-level financing and investment, looking at how financial institutions can support a company’s climate transition strategy through general corporate purpose financing. The Guide provides a toolkit for financial institutions and corporates to operationalise global frameworks and principles, highlighting commonalities across international frameworks and identifying a core set of entity level transition related information and metrics that are material and relevant to the ICT sector. For the ICT sector, the Guide references metrics such as total energy consumption, power usage effectiveness, carbon usage effectiveness, and water usage effectiveness as material to financiers and investors to evaluate and monitor. The Guide includes case studies from Alibaba Cloud, Lenovo and Tencents that illustrate how ICT companies in Asia can translate international principles into practice. 

The Hong Kong Monetary Authority issues its Sustainability Report 2025 

The Hong Kong Monetary Authority (HKMA) published its Annual Report 2025 and Sustainability Report 2025 on 30 April 2026. The Sustainability Report sets out HKMA’s key priority actions for 2026 which include: 

• continuing to monitor banks’ climate risk management through targeted thematic examinations and other supervisory exercises; 

• enhancing the supervisor-driven stress testing framework by incorporating a new scenario that integrates both macroeconomic and climate-related shocks; 

• keeping the Supervisory Review Process under review to take into account banks’ effective management of climate-related risks; 

• providing further guidance and sharing good practices to help banks enhance their climate risk management capabilities; 

• working towards aligning regulatory sustainability disclosure requirements with international standards, including the ISSB Standards and the Basel Committee on Banking Supervision’s disclosure framework for climate-related financial risks, while ensuring appropriate tailoring to Hong Kong’s market context; and 

• finalising a new Supervisory Policy Manual module GS-2 on “Transition Planning” to provide banks with guidance on managing risks associated with the economy’s net-zero transition development. 

The Sustainability Report also referenced the development of Phase 2B of the Hong Kong Taxonomy which aims to broaden the coverage of the taxonomy by introducing additional green and transition activities and expanding on adaptation-related measures. The Sustainability Report also outlines HKMA’s role in supporting the sustainable and transition finance markets, including continuing to support the Government in implementing the Government Sustainable Bond Programme in 2026 and provide subsidies through the Green and Sustainable Finance Grant Scheme. 

Separately, in April, the Hong Kong Institute for Monetary and Financial Research (HKIMR) published a report entitled “Navigating the Green Shift: Opportunities and the Evolving Landscape of Transition Finance” which examines the evolving opportunities and challenges in the transition finance landscape, drawing on a survey and in-depth interviews with financial institutions and multilateral organisations (see HKMA’s press release).

APLMA publishes guidance to improve SME access to sustainability-linked loans

On 15 May 2026, the Asia Pacific Loan Market Association (APLMA) released a practice note on how to enhance the accessibility of sustainability-linked loans (SLLs) for SMEs (the Practice Note).  This Practice Note seeks to address challenges facing lenders when financing SMEs under the Sustainability-Linked Loan Principles (SLLP) and provides guidance around the application of these standards in an SME context.  Recognising that SMEs often face a high burden in meeting some of the core components of the SLLP, this Practice Note aims to bridge the gap between global standards and the practical operational realities of SMEs (see APLMA’s press release).

Singapore enters into carbon credit agreement with Philippines

On 30 April 2026, Singapore signed its 11th implementation agreement for carbon trading, with the Philippines becoming its third South-east Asian partner under the bilateral pact. The agreement allows the Singapore Government and carbon tax-liable firms to purchase eligible carbon credits from the Philippines to offset a portion of their emissions, while channelling climate finance towards sustainable development projects in the Philippines.

Singapore allows roll over of unutilised International Carbon Credit (ICC) offset quota for emissions year 2025

The Ministry of Sustainability and the Environment announced that Singapore's carbon tax-liable companies may carry forward any unutilised International Carbon Credit (ICC) offset quota from emissions year 2025 to 2026, as a transitional measure to allow international carbon markets more time to mature and for eligible credit supply to build up. A credit conversion formula will apply to account for the increased carbon tax rate of $45 per tonne in 2026, and any quota previously rolled over from emissions year 2024 to 2025 will expire and cannot be carried forward. 

Singapore launches new one-stop SME Sustainability Hub and PSG carbon management solutions category

Enterprise Singapore (supported by various other agencies) has launched the SME Sustainability Hub, a one-stop platform consolidating materials relating to government support, financial schemes, and training resources to help SMEs kickstart their sustainability journey. SMEs can also now access new carbon management solutions under the Productivity Solutions Grant to build carbon accounting capabilities and track emissions across Scopes 1, 2, and 3.

Federal Agency Actions

On 21 May 2026, the U.S. Environmental Protection Agency (EPA) announced two actions under the American Innovation and Manufacturing Act addressing hydrofluorocarbon (HFC) refrigerant regulations. The first, a final rule, revises the 2023 Technology Transitions Rule by extending compliance deadlines for HFC use and broadening the range of refrigerant options available to businesses - with projected cost savings estimated in hundreds of millions of dollars across sectors including supermarkets, home air conditioning, semiconductor manufacturing, and the transportation of medical supplies. The second, a proposed rule, would exempt all road refrigerant transport appliances from the HFC leak repair requirements established in the 2024 Emissions Reduction and Reclamation Rule (ER&R Rule), on the basis that the transportation sector presents a low risk to human health, with estimated savings in the billions if finalized; the EPA also indicated it intends to reconsider the remainder of the 2024 ER&R Rule at a future date.

Also on 21 May 2026, the Federal Energy Regulatory Commission (FERC) published a proposed rule which includes significant revisions to its blanket certificate program, the regulatory pathway that allows interstate natural gas pipelines to construct, modify, or abandon facilities without case-specific FERC authorization. FERC proposes to expand the scope and scale of projects that interstate natural gas pipelines may construct without a case-specific authorization order and to increase the cost limits for such projects, among other changes.

On 18 May 2026, the EPA proposed two rules under the Safe Drinking Water Act addressing per- and polyfluoroalkyl substances (PFAS) in drinking water. The first would maintain enforceable federal drinking water standards for PFOA and PFOS while extending their compliance deadlines, and the second would rescind the regulatory determinations for PFHxS, PFNA, HFPO-DA (commonly known as GenX chemicals), and a related hazard index mixture, framing the rescission as correcting a procedurally unlawful prior rulemaking. The EPA has indicated that following rescission it intends to re-evaluate those compounds for potential future regulation. The public comment period closes on 20 July 2026; the EPA has argued that the Safe Drinking Water Act’s anti-backsliding prohibition does not apply because the rescission corrects an unlawfully promulgated rule rather than revising a lawfully promulgated one.

On 11 May 2026, the Bureau of Land Management (BLM) rescinded the Conservation and Landscape Health Rule, also known as the Public Lands Rule, which was put in place in May 2024. The Public Lands Rule acknowledged conservation as one of many possible uses of public land, called for the application of land health standards to public lands controlled by BLM, and set out the framework and tools that BLM used to implement its conservation strategies. The rescission of the rule comes after the U.S. Department of the Interior (DOI) proposed the action in September 2025, arguing that the rule placed too much emphasis on conservation at the expense of agriculture, mining, and energy development, and exceeded BLM’s authority.

On 6 May 2026, the DOI conveyed 1.4 million acres of land in the Dalton Utility Corridor from the BLM to the state of Alaska. The DOI transferred this land as part of the Alaska Statehood Act, a 1959 law that established the state of Alaska and granted it 105 million acres of land to be transferred over time. The Dalton Utility Corridor is home to several key transportation and energy infrastructure assets, including parts of the Trans-Alaska Pipeline system corridor as well as proposed routes for the Ambler Road and the Alaska Liquefied Natural Gas project, and the land conveyance is expected to increase access to these assets. The conveyance follows a February 2026 order that made 2.1 million acres of land within the Corridor available for state land selection and use in energy projects.

As of May 2026, it is reported that the Pentagon has effectively halted its national security reviews of more than 250 onshore wind projects across more than 30 states, totaling at least 30 gigawatts of potential generation capacity. Federal law requires any structure 200 feet or taller to be reviewed first by the Federal Aviation Administration (FAA) and then by the Pentagon, which must determine within 60 days whether the structure may interfere with military airspace or operations. Industry groups have characterized the delays - which began in mid-2025 and escalated through early 2026 with the suspension of draft mitigation agreements and the cancellation of developer meetings - as a de facto moratorium on new land-based wind energy development. The Pentagon has stated that its siting clearinghouse is actively evaluating projects in accordance with statutory and regulatory requirements but has not addressed why approval wait times have exceeded the federally mandated 60-day review deadline.

On 6 April 2026, the EPA published a draft Sixth Contaminant Candidate List (CCL 6) in the Federal Register for public review and comment, identifying 88 unregulated contaminants - 75 individual chemicals, four chemical groups (disinfection byproducts, microplastics, PFAS, and pharmaceuticals), and nine microbial contaminants - that the agency is considering for possible future drinking water regulation under the Safe Drinking Water Act. The draft CCL 6 does not impose any obligations on regulated entities and does not constitute a proposed rule; it is intended to prioritize research and data collection and to inform future EPA regulatory determinations on whether to regulate at least five listed contaminants, a finding the Agency must make every five years before any formal rulemaking can proceed. Inclusion on the list signals where EPA focus may shift next, and the public comment period closes on 5 June 2026.

On 31 March 2026, a senior EPA official, speaking at the Environmental Council of the States’ spring meeting, confirmed that the EPA is considering reclassifying large on-site power generators at data centers - including combustion turbines and diesel generators - as mobile rather than stationary sources under the Clean Air Act, a change that would substantially reduce permitting burdens on data center developers. The EPA acknowledged stakeholder interest in treating portable combustion turbines as mobile nonroad engines in its January 2026 final New Source Performance Standards (NSPS) rule but concluded at the time that the matter required further investigation. If adopted, the reclassification would represent a significant departure from the current Clean Air Act framework, under which stationary combustion turbines and stationary engines serving as primary and backup power for data centers are subject to various NSPS and National Emission Standards for Hazardous Air Pollutants.

Congressional Actions

On 18 May 2026, Senator Adam Schiff of California introduced the Energy Cost Fairness and Reliability Act, proposed legislation that would require the FERC to issue a rule governing the interconnection of large load facilities, including data centers with a peak demand exceeding 50 megawatts. The rule would require these facilities to pay for their own energy infrastructure, network upgrades, and interconnection studies, prohibit companies from shifting those costs onto customers, and require the facilities to maintain flexibility in their energy demands.

State Actions

On 28 May 2026, New York State enacted its Fiscal Year 2026-27 State Budget, which includes a package of energy affordability, utility regulatory reform, and environmental measures. The budget provides $1 billion in one-time energy rebates for qualifying households and, on utility regulation, requires utility companies to file budget-constrained rate-increase proposals capped at the rate of inflation, subject to limited exceptions for safety, reliability, and critical upgrades; explicitly prohibits the recovery of lobbying, political, and public relations expenses from ratepayers; extends the rate case review period to 15 months; and provides that utilities will not automatically receive a proposed rate increase if the Public Service Commission rejects it and no alternative plan is approved. On clean energy, the budget allocates $1 billion through the Sustainable Futures Fund, including $200 million for the NY SUN solar program, $300 million for renewable energy projects, $500 million for building greenhouse gas emissions reductions, and no less than $50 million for methane and greenhouse gas mitigation programs. The budget also sets a record-high investment in the Environmental Protection Fund of $450 million - an increase of $25 million over the prior year - and commits $750 million in clean water funding for the current year as part of a five-year, $3.75 billion commitment.

On 12 May 2026, Maryland enacted two pieces of legislation addressing the state’s electricity regulatory framework. The primary measure, House Bill 1532, the Utility RELIEF (Reducing Energy Load Inflation for Everyday Families) Act, makes comprehensive amendments covering rate schedules, energy efficiency programs, solar permitting and interconnection, net energy metering, and large-load customer obligations - establishing a framework under which large-load customers, generally defined as those with aggregate monthly demand of 25 megawatts or more and a load factor exceeding 60 percent, are required to fund grid infrastructure upgrades necessitated by their interconnection and are prohibited from shifting those costs to residential ratepayers. The Act also sunsets traditional net energy metering at the earlier of reaching 3,000 megawatts statewide or 1 July 2027 and directs the Public Service Commission to approve a successor framework by 1 February 2027. The second measure, the DECADE Act, strengthens economic development tools with the stated aim of attracting businesses in emerging industries, including clean energy.

On 1 May 2026, California’s Plastic Pollution Prevention and Packaging Responsibility Act went into effect. The law requires producers of single-use plastic packaging to reduce their production of plastic and meet certain recycling rate targets. Producers must engage with a Producer Responsibility Organization, which is responsible for developing and implementing plans for the reduction, collection, processing, and recycling of single-use plastics and packaging materials.

Climate Disclosure Legislation and Regulations

On 29 May 2026, the U.S. Securities and Exchange Commission (SEC) announced and published a proposed rule titled “Rescission of Climate-Related Disclosure Rules” for public comment. This follows the SEC’s notification, on 7 May 2026, to the U.S. Court of Appeals for the Eighth Circuit—in consolidated proceedings challenging the agency’s March 2024 climate-related disclosure final rules—that the Commission is pursuing notice-and-comment rulemaking to reconsider the rules and does not intend to renew its defense of them in the pending litigation. Both announcements arise amid an extended period of legal challenge to the SEC’s climate disclosure framework, which would have required large filers to begin disclosing material climate-related risks and, in certain circumstances, greenhouse gas emissions.

ESG Litigation

On 21 May 2026, a Ninth Circuit panel vacated and remanded a Northern District of California ruling, in which the trial court found, following two bench trials, that water fluoridation at 0.7 mg/L presents an unreasonable risk to human health under the Toxic Substances Control Act and ordered the EPA to manage that risk. The panel held that the district court violated the party presentation principle by holding the case in abeyance to await a National Toxicology Program monograph that both parties had stipulated not to present at trial, then insisting on its introduction and conducting a second bench trial over the parties’ objection, and remanded with instructions to rule based solely on the first trial record. The underlying action was brought after the EPA denied a 2016 petition seeking a ban on the addition of fluoride to drinking water.

On 20 May 2026, the attorneys general of Iowa, Nebraska, Texas, and West Virginia filed lawsuits against a proxy advisory firm, seeking permanent injunctions, civil penalties, restitution, and attorneys’ fees. The suits allege the firm promoted a political environmental, social, and governance (ESG) agenda under the guise of objective advice. Additionally, the states allege that the firm failed to adequately disclose a material conflict of interest arising from its parallel ESG consulting business, which sold services to the very companies covered in the firm’s research reports.

On 15 May 2026, the U.S. Court of Appeals for the Fourth Circuit reversed in part a lower court decision, issuing instructions to the lower court to enter a preliminary injunction against Maryland’s restriction on “green power” marketing. The court remanded a related compelled-disclosure issue to the district court for evaluation in light of newly promulgated disclosure language issued by the Maryland Public Service Commission following the lower court’s ruling. The decision engages ongoing questions regarding the intersection of state clean energy marketing regulations and First Amendment protections for commercial speech.

On 13 May 2026, eighteen named plaintiffs filed a Second Amended Class Action Complaint in the US District Court for the District of Delaware, seeking to certify a consumer class comprising purchasers of proprietary waterproof fabric products across ten jurisdictions for the period January 2018 through December 2024. Plaintiffs allege that the company marketed its products as environmentally responsible while incorporating PFAS into its expanded polytetrafluoroethylene (ePTFE) membrane fabrics and water repellent coatings, without disclosing that those substances shed during normal product use. The complaint further contends that the company’s “PFC* Free Laminate” hang tag was misleading because the company adopted a definition of “PFC” that excluded ePTFE, thereby concealing the presence of PFAS in finished goods. Plaintiffs additionally raise claims relating to alleged contamination of land, waterways, and groundwater surrounding the company’s PFAS manufacturing facilities in Maryland. Claims are asserted under the Maryland Consumer Protection Act and equivalent statutes in nine other jurisdictions, together with fraudulent concealment claims.

On 12 May 2026, an offshore wind developer filed a motion for summary judgment seeking a permanent injunction in the U.S. District Court for the District of Columbia challenging the Bureau of Ocean Energy Management’s December 2025 order suspending work on its offshore wind project Empire Wind on purported national security grounds. The developer argued the suspension was unlawful under the Outer Continental Shelf Lands Act, violated due process, and was arbitrary and capricious under the Administrative Procedure Act. The project is one of five large-scale offshore wind projects frozen by the Trump administration in its December 2025 stop-work order. The developers of the four others, Revolution Wind, Sunrise Wind, Coastal Virginia Offshore Wind, and Vineyard Wind, have launched their own challenges to the orders affecting their projects.

On 5 May 2026, the U.S. District Court for the District of South Dakota issued a temporary restraining order halting the Rochford Mineral Exploratory Drilling Project, a graphite exploration project approved by the U.S. Forest Service in February 2026 on Black Hills National Forest lands near Pe’Sla, a site sacred to the Lakota, Nakota, and Dakota tribes of the Great Sioux Nation. The court found that plaintiffs - three conservation nonprofits in one case and nine federally recognized tribes in a companion case - are likely to succeed on their claim that the U.S. Forest Service acted arbitrarily by invoking Categorical Exclusion CE-8, which applies only to short-term mineral investigations of one year or less, when the agency’s own documentation contemplated up to three years of activity. The court also found irreparable harm from ongoing damage to sacred cultural practices and risk to water quality and scheduled an evidentiary hearing on the preliminary injunction motions for 20 - 21 May 2026.

On 4 May 2026, the U.S. Department of Justice (DOJ) filed a complaint in the U.S. District Court for the District of Minnesota against the State of Minnesota and the Minnesota Attorney General to prevent the state from pursuing a state-court climate change lawsuit against fossil fuel producers. The federal complaint asserts that Minnesota’s state-court action seeks a “global remedy for a global issue,” and that such a suit is preempted by federal law and powers - including the Clean Air Act and the foreign affairs doctrine - and constitutes an unconstitutional attempt by a single state to regulate global greenhouse gas emissions. The DOJ seeks declaratory relief and preliminary and permanent injunctive relief to bar Minnesota from pursuing the state-court climate litigation.

On 30 April 2026, a US Magistrate Judge in the Northern District of California ruled that the core greenwashing claims in pending class action litigation could proceed to the next stage. The proposed class action alleges that the company deceptively marketed its sugar products using the phrases “Farming to Help Save the Planet” and “our farms help fight climate change & build healthy soil,” leading purchasers to believe the products were produced using environmentally beneficial farming practices. The court found that the plaintiff had raised sufficient allegations to advance those claims and declined to dismiss on the basis that the packaging statements could lead a reasonable consumer to conclude the company actively employs environmentally responsible agricultural practices. The court did, however, dismiss certain components of the complaint, including restitution claims under California’s Unfair Competition Law and requests for punitive damages on several causes of action.

On 30 April 2026, a proxy advisory firm filed a lawsuit in the U.S. District Court for the Southern District of Indiana seeking to block Indiana H.B. 1273 from taking effect on 1 July 2026. The law would impose disclosure and analysis obligations on proxy advisors whenever they issue anti-management recommendations, including those related to ESG matters. The firm alleges the statute compels speech, discriminates based on viewpoint, and imposes an unconstitutional burden on proxy advisors by requiring them to either prepare state-defined financial analyses or justify why their recommendations are not supported by such analyses.

On 29 April 2026, a proxy advisory firm filed suit in the U.S. District Court for the District of Kansas seeking to enjoin Kansas’s Proxy Advisor Transparency Act before its 1 July 2026 effective date. The firm alleges the statute would require proxy advisors to either prepare state-mandated financial analyses or include multiple compelled warning disclosures, including disclosures the firm characterizes as false or misleading. The firm asserts constitutional challenges on First Amendment viewpoint-discrimination, vagueness, and dormant Commerce Clause grounds, and contends the statute’s extraterritorial application to recommendations concerning companies “anywhere on Earth” would significantly distort the flow of information to investors.

DEI Developments

On 12 May 2026, the U.S. Department of Justice (DOJ) announced a resolution agreement with a large financial technology company, closing a fair lending investigation under the Equal Credit Opportunity Act into the company’s Economic Opportunity Fund - a $530 million commitment announced in June 2020 to support Black and underrepresented minority businesses - without any finding or admission of liability. The DOJ stated that the resolution reflects the administration’s broader enforcement priority of ensuring that corporate programs comply with federal anti-discrimination requirements. Under the agreement, the company will restructure the program on a race- and national origin-neutral basis through a small business initiative providing fee waivers on $1 billion of transactions, available to eligible small businesses in farming, manufacturing, or technology, or those certified through the U.S. Small Business Administration’s Veteran Small Business Certification Program. The company must also designate a dedicated initiative director and submit annual compliance reports to the DOJ for three years.

On 5 May 2026, a former vice president of a global technology company filed a Section 1981 and Title VII of the Civil Rights Act of 1964 (Title VII) complaint against the company in the U.S. District Court for the Southern District of New York, alleging race discrimination in its employment practices. The plaintiff alleges that the company eliminated several senior Black executives following President Trump’s executive orders directing federal contractors to discontinue diversity, equity, and inclusion (DEI) programs, in order to maintain standing with the Department of Defense and other federal agencies holding significant company contracts. The plaintiff seeks $1.15 million in compensatory damages.

Also on 5 May 2026, the U.S. Equal Employment Opportunity Commission (EEOC) filed a complaint against a large news media company in the U.S. District Court for the Southern District of New York, alleging unlawful race and sex discrimination in a promotion decision in violation of Title VII. The EEOC contends that a White male editor with relevant industry experience was excluded from final-stage interviews for a Deputy Real Estate Editor position filled in early 2025, and that the candidate ultimately appointed - a multiracial woman - lacked experience specified as a stated role requirement and received lower panel ratings than competing finalists. The EEOC also alleges that the company’s published diversity objectives provided the backdrop for the decision. The EEOC is seeking injunctive relief, back pay, compensatory and punitive damages, and appointment of the charging party to a deputy editor role that he was allegedly denied.

On 4 May 2026, the U.S. Department of Education’s Office for Civil Rights (OCR) announced its launch of a formal investigation under Title IX of the Education Amendments of 1972 (Title IX) into Smith College, a historically all-women’s institution, concerning its practice of admitting transgender women and permitting the use of certain gender-segregated spaces on campus, including residential halls, restrooms, changing facilities, and varsity athletic teams. OCR will examine whether Smith College’s enrollment and access practices are compatible with Title IX’s statutory carve-out, which permits colleges to maintain a sex-exclusive student body. The Trump administration asserts the carve-out is grounded in biological sex at birth rather than gender identity, and that an institution enrolling transgender women would therefore fall outside the scope of the exemption.

International Developments

On 6 May 2026, at the G7 Trade Ministers’ meeting, ministers from Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union reaffirmed a commitment to cooperative measures to enhance the economic resilience and security of global supply chains, with particular attention to strategic sectors including critical technologies and critical minerals. The communiqué highlighted vulnerabilities arising from concentrated supply, market-distorting practices, and export restrictions affecting critical minerals. The group also contemplated coordinated tools such as quotas and price floors and identified reducing excessive dependencies and preventing technology leakage as priority objectives for intergovernmental cooperation.

• EU: EUDR Simplification Report lands alongside updated Guidance and FAQs
• US: SEC proposes allowing optional semiannual reporting for public companies
• Bigger, Broader, Greener: Hong Kong Raises the Bar on its Green and Sustainable Finance Scheme
• Linklaters advises on the IFC’s first-of-its-kind Hong Kong dollar social bonds issuance