ESG newsletter - September 2026

PFAS podcast series

PFAS – per- and polyfluoroalkyl substances, also known as “forever chemicals” – have rapidly emerged as a key legal and commercial risk area for businesses to think about as part of their ongoing operations and during transactions. Across three podcasts, our lawyers explore how PFAS is currently regulated, how it affects M&A deals, and how it is playing out in the courts. Each episode covers different ground, but together they show just how quickly the landscape is evolving. Businesses that get ahead now, rather than waiting for certainty, will be in a much stronger position than those that do not. Click here to listen to our PFAS podcasts. 

Webinar: Preparing for the EU CSDDD, EU Forced Labour Regulation and changes to UK Modern Slavery Act

For multinationals managing intricate global supply chains, navigating the patchwork of obligations arising from the EU Corporate Sustainability Due Diligence Directive (CSDDD), EU Forced Labour Regulation and proposed changes to the UK Modern Slavery Act is a formidable challenge. Join our ESG experts – Guillaume Croisant, James Marlow and Sarah Martin - on Tuesday 29 September 2026 at 11:00 - 11:40 BST as they discuss how businesses can start preparing for the operational reality of engaging more actively with their global value chains. Register here.

Global: GHG Protocol announces key updates

On 29 July 2026, the Greenhouse Gas Protocol  announced a series of updates to its corporate standards, including that it and the International Organization for Standardization (ISO) will combine their corporate carbon accounting standards into a single global accounting standard. The consolidation brings together the GHG Protocol’s Scope 1, Scope 2, Scope 3 and Actions and Market Instruments (AMI) standards with the ISO’s 14064-1 standard. The intention is the publication of a single, co-branded corporate standard and a public consultation on that single standard is planned for Q2 2027. 

The GHG Protocol also published the results of its public consultation on the Scope 2 standard and released preliminary feedback from the Request for Information on its AMI standard development process. The proposal introduces a “multi-statement” reporting approach, enabling companies to report three distinct components: (i) the emissions from their own operations and value chains (physical emissions); (ii) emissions tied to market instruments such as commodity certificates and mitigation-related contractual agreements (market-based emissions); and (iii) the emissions impact of their actions and investment decisions using consequential methods. 

EU CSRD: EFRAG opens consultation on sustainability reporting for non-EU companies

On 23 July 2026, EFRAG launched a public consultation on the Exposure Draft for the European Sustainability Reporting Standard applicable to certain non-EU companies reporting under Article 40a of the Accounting Directive (the ESRS-40a ED). The deadline for comments is 31 October 2026, and EFRAG is due to deliver its technical advice to the European Commission by January 2027.

These reporting standards have been through several labels. They were originally referred to as the ESRS for non-EU companies (the non-EU ESRS or N-ESRS). Immediately before the consultation launch, EFRAG rebranded it as ESRS for Third-Country Groups (ESRS-TC). In the exposure draft released for public consultation, the standard has settled on the name ESRS-40a, tied directly to the enabling article of the Accounting Directive.

ESRS-40a starts from the revised ESRS and keeps their architecture. The four reporting areas (governance; strategy; impact management through policies and actions; and metrics and targets) are also the same. Around that shared architecture, ESRS-40a subtracts, adds and adjusts to reflect the provisions of Article 40a of the Accounting Directive. ESRS-40a ED also introduces one genuinely new feature: the so-called “mixed approach”. As a starting point, reporting remains global. But for topics other than climate, companies would be allowed to report only on “EU-related impacts”. For more information, see our blog post. 

EU: CSRD after the Omnibus: what has actually changed and what has not 

Between the "Stop-the-Clock" Directive and the Omnibus I Directive, the scope, timing and content of reporting under the Corporate Sustainability Reporting Directive (CSRD) have all moved. Our latest blog post separates what has actually changed from what remains the same, so that companies can focus their attention where it matters.

EU CSRD and your supply chain: what you can, and cannot, ask for

If you work in sustainability or procurement at a company caught by the EU’s Corporate Sustainability Reporting Directive (CSRD), you have probably already sent a questionnaire or two down the supply chain asking for emissions data, policies or certifications. The rules on how far you can push those requests have just got a lot clearer, and a lot stricter. For more information on the CSRD value chain cap and what this means in practice, see our blog post. 

Global: LMA publishes updated sustainability-linked loan provisions and accompanying term sheet

On 18 August 2026, the LMA published updated draft provisions for sustainability-linked loans together with an amended accompanying term sheet. The changes were intended to streamline the drafting and reflect developments in market practice. Most significantly, new drafting has been introduced for “sleeping” sustainability-linked loans, where various details are to be agreed between the parties after the loan has been entered into in order to activate the sustainability-linked loan provisions.

Global: LMA, LSTA and APLMA publish Practice Note for the assessment of “pure play companies”

The LMA, LSTA and APLMA have published a Practice Note which is intended to provide a practical framework for identifying and assessing “pure play companies”, whose business activities are primarily focused on environmental or social objectives, in the context of sustainable finance transactions. The Practice Note confirms that it is not intended to create a new loan label or category of sustainable financing.

EU: ESAs consult on proposals to simplify EU Taxonomy disclosures

The three European Supervisory Authorities - ESMA, EBA and EIOPA - have launched parallel consultations with proposals designed to reduce sustainability reporting requirements under the Taxonomy Regulation. The proposals focus on making Key Performance Indicators (KPIs) more practical and easier to apply, while preserving transparency for investors.

The consultations build on the Commission’s broader Omnibus I package to streamline sustainability reporting and follow the Commission’s 4 March 2026 request for technical advice on selected KPIs as part of its review of the Disclosures Delegated Act under the Taxonomy Regulation. 

All three consultations closed on 12 August 2026. The Commission intends to complete its review of the Disclosures Delegated Act by Q1 2027 and for the new measures to enter into force in Q3 2027. For more information, see our blog post.  

EU: ESG Ratings Regulation started to apply and ESMA published first list of ESG Ratings providers

On 2 July 2026, the EU ESG Ratings Regulation started to apply, bringing ESG rating providers under the direct supervision of ESMA. ESG rating providers (other than small providers) wishing to continue operating in the EU after 2 July 2026, must have notified ESMA by 2 August 2026 of their intention to apply for authorisation or recognition, and submit their application for authorisation or recognition by 2 November 2026. For more information, see our blog post. ESMA has already published the first List of registered ESG providers. 

On 28 and 30 July 2026, a number of Delegated Regulations on ESG ratings were published in the Official Journal of the EU.  Two Delegated Regulations were approved on 21 April 2026 and supplement the ESG Ratings Regulation with regard to (i) 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, and (ii) RTS specifying the measures and safeguards to be implemented by ESG rating providers to separate their ESG rating activities from their other activities. Two other Delegated Regulations were approved on 24 April 2026 and supplement the ESG Ratings Regulation (i) with regard to rules of procedure on fines and periodic penalty payments imposed to ESG rating providers by ESMA and (ii) with regard to fees charged by ESMA to ESG rating providers. For more information, see our blog posts here and here. 

On 10 July 2026, ESMA published eight new Q&As on the ESG Ratings Regulation, covering consulting activities to investors or undertakings – separation of business, application of two working day notification period, Scope of two working day notification period, access to dataset for factual error review, notifications without a designated contact, obligation to consider issuer feedback, ESG ratings used for internal purposes or in-house financial services and exemption for SPO providers.

EU Prospectus Regulation: delegated acts introducing new ESG bond disclosure requirements now in force

Commission Delegated Regulation (EU) 2026/1061, amending Delegated Regulation (EU) 2019/980 as regards the standardised format and sequence and the streamlined content, scrutiny and approval of prospectuses under the Prospectus Regulation, was published in the Official Journal of the EU on 13 August 2026 and entered into force on 16 August 2026.  The amendments reflect changes to the EU Prospectus Regulation introduced by the EU Listing Act and include new disclosure requirements for prospectuses which reference ESG Bonds. For more information, see our previous blog post. 

UK: FCA publishes guidance on climate adaptation and resilience for property insurance and mortgage markets 

On 4 August 2026, the Financial Conduct Authority (FCA) published guidance for regulated firms on how physical risks from climate change (such as flooding) may impact the property insurance and mortgage markets and how the FCA can help. For financial services teams, the practical message is that the FCA is focussing on how firms are preparing for the real-world physical impacts of climate change, particularly in property insurance and mortgage markets.

Key takeaways from the FCA's climate adaptation and resilience guidance:

• Physical climate risks are now a mainstream financial services risk - The FCA expects firms to actively consider both acute risks (floods, storms, heatwaves, wildfires) and chronic risks (sea-level rise, changing rainfall patterns, sustained temperature increases) because they can affect operations, asset values, insurance availability, lending decisions, and market stability. 

• The FCA is particularly concerned about insurance and mortgage market accessibility - The guidance identifies five key risks, including reduced access to insurance, higher insurance costs, difficulties obtaining mortgages, increased costs for existing homeowners, and potential mispricing of climate risk in financial markets. The FCA sees these as threats to consumer protection, competition, and market integrity. 

• Insurers and lenders should assess whether climate risks are affecting customer outcomes - Insurers should ensure products continue to deliver fair value, provide clear explanations of coverage and exclusions, support customers when policies are not renewed, and handle claims fairly and transparently. Mortgage lenders should monitor how climate-related risks affect lending, property values, insurability, and Consumer Duty outcomes. 

• Climate risk data remains imperfect, but firms are still expected to engage with it - The FCA notes significant differences between climate risk data providers and recognises that risk assessment methodologies are evolving. Nevertheless, firms should be developing their understanding of climate risks, using available tools and guidance (including work from the Climate Financial Risk Forum, or CFRF) to improve their risk assessment and management. 

• Adaptation is not only about risk management, but also about business opportunity - The FCA highlights opportunities arising from adaptation and resilience measures, including new investment opportunities, innovative products, resilience financing, and risk-transfer mechanisms such as catastrophe bonds. Firms that adapt effectively may be better positioned to manage costs, serve customers, and remain competitive as climate impacts intensify. 

EU ETS: Commission publishes proposal for the revised Emissions Trading System

On 17 July 2026, the European Commission published its proposal for a revised EU Emissions Trading System (ETS). The proposal follows intense political pressure from Member States for a drains-up review of the EU’s flagship carbon pricing instrument against a backdrop of sustained high energy cost and a populist revival of climate change denial. Consequently, the review is expansive, looking at a recalibrated emissions cap, new direct funding mechanisms to support industrial decarbonisation, revised rules on free allocation, expanded sectoral coverage and the gradual inclusion of municipal waste incineration.

The Council and Parliament are aiming to reach political agreement by Q1 2027, with intense debate expected from September 2026 onwards. For more information, see our blog post.  

European Commission publishes Electrification Action Plan to make Europe the “first electro-powered continent”

On 17 July 2026, the European Commission published its Electrification Action Plan. Key elements of the Action Plan include the following:

• The Commission wants to make Europe the “first electro-powered continent” and proposed an indicative electrification target of 46% by 2040, measured as electricity’s share in final energy consumption. 

• The Electrification Action Plan focuses on reducing the electricity-to-fossil fuel price gap, lowering upfront switching costs, accelerating grid deployment, boosting innovation and building the skilled workforce needed for widespread electrification across industry, transport and buildings. 

• A new legislative proposal on network charges would introduce measures to incentivise electrification, taxation measures designed to ensure that electricity is taxed less than natural gas, and rules on efficient, transparent and non-discriminatory access to transmission and distribution networks in situations of grid congestion.

For more information, see our blog post. 

EU: Commission proposes sustainability labelling for European data centres

On 2 July 2026, the European Commission published a revised draft of its Delegated Regulation establishing a mandatory EU-wide sustainability rating scheme and electronic label for data centres. 

In March 2024, the Commission adopted the Delegated Regulation (EU) 2024/1364, which established the European database on data centres and introduced the initial reporting framework. The European database serves as one of the main data sources on energy consumption of the EU’s data centres. The draft Regulation amends the 2024 Regulation by introducing the rating and labelling mechanism - akin to the energy efficiency labels already familiar from household appliances - and makes several material changes to an earlier version of the draft Regulation published in March this year. While the 2024 Regulation and the draft Regulation only include reporting and no minimum performance obligations, the label is expected to be used within the EU for wider purposes such as access to green and sustainable finance, public sector procurement decisions, and sustainability assessments under the forthcoming Cloud and AI Development Act. For more information, see our blog post.

EU launches T-MED: a matchmaking platform for renewable energy cooperation and clean tech investment in the Mediterranean region

On 9 June 2026, during the European Sustainable Energy Week, the European Commission launched the Trans-Mediterranean Renewable Energy and Clean Tech Cooperation Initiative (T-MED). The initiative seeks to match up to €25 billion of existing EU financial instruments in investment with suitable projects across renewable energy generation, grid modernisation, hydrogen and clean tech manufacturing in partner countries across the Middle East and North Africa (MENA) region. For sponsors, lenders and developers active in, or considering, the Mediterranean energy and infrastructure market, T-MED establishes a new EU-backed framework that will materially shape investment pipelines, financing structures, regulatory reform timelines and industrial partnerships across the region over the next decade. For more information, see our blog post. 

EU Methane Regulation: Commission adopts recommendations on compliance and penalties

On 20 July 2026, the European Commission adopted two recommendations to guide EU Member States on compliance solutions and penalties regime under the EU Methane Regulation. The Recommendations seek to establish a predictable framework for the implementation of the Methane Regulation as key import requirements approach their 1 January 2027 start date, while the Commission continues to resist calls to reopen the legislation itself.

The first Recommendation aims to bring clarity on how to demonstrate compliance with the obligations coming into force on 1 January 2027. The Recommendation also provides optional model contract clauses intended to promote fair, transparent and sustainable contractual practices, support compliance, and foster reliable supply of crude oil, natural gas, LNG or coal to the EU. 

In the second Recommendation, the Commission suggests that Member States should not apply penalties provided for in the Methane Regulation in relation to certain failures to provide information due in 2027, 2028 and 2029. For more information, see our blog post. 

EU: Commission publishes guidance documents to support CBAM implementation 

On 14 August 2026, the European Commission published a series of ten guidance documents to help non-EU operators with the implementation of the Carbon Border Adjustment Mechanism (CBAM). The CBAM definitive phase started in January 2026, with a gradual phasing-in of carbon pricing on imported embedded emissions. The guidance focuses on operators of installations outside the EU that produce CBAM goods, as well as authorised CBAM declarants and verifiers involved in the compliance cycle. The Commission intends the package to help businesses with CBAM compliance, including verification of the emissions data, use of the actual values for 2026 imports and application of the free allocation adjustment in practice.

The series includes four general guidance documents: (i) an introduction to CBAM concepts, compliance cycle, roles and responsibilities, milestones, deadlines and exemptions; (ii) a quick guide for non-EU operators; (iii) guidance on the calculation of embedded emissions; and (iv) guidance on the calculation of the free allocation adjustment under the EU ETS. It also includes six sector-specific guides covering cement, hydrogen, fertilisers, iron and steel, aluminium and electricity, each providing an overview of production processes, value chains and monitoring and reporting considerations, supplemented with worked examples. 

On 24 August, the Commission published further guidance on CBAM verification and accreditation. The document clarifies the requirements that apply to verifiers responsible for verifying emissions reports of non-EU installations producing CBAM goods imported into the EU from 1 January 2026. It also explains the role of National Accreditation Bodies in accrediting and supervising those verifiers.

For more information on the CBAM, see our previous blog post. 

EU: Commission publishes calls for evidence for implementing and delegated acts under PPWR 

On 14 August 2026, the European Commission launched three calls for evidence for two implementing acts and one delegated act to support the recycled-content requirements for plastic packaging, including imports from third countries, introduced by the Packaging and Packaging Waste Regulation (PPWR) (see here, here and here). The feedback periods run until 16 September 2026. The PPWR applies from 12 August 2026. The Commission confirmed that adoption of these acts is planned for Q4 2026. 

The first call for evidence concerns the methodology for calculating and verifying recycled content recovered from post-consumer plastic waste, together with the format for the required technical documentation. The second call for evidence addresses the sustainability criteria for plastic recycling technologies. The third call for evidence relates to the methodology for assessing, verifying and certifying equivalence (including through third-party audits) where recycled content is recovered from post-consumer plastic waste collected or recycled in a third country. 

For more information on the PPWR, see our Quick Guide. 

New ESG Quick Guide: EU Industrial Emissions Directive (IED)

We have a series of Quick Guides that provide an overview of key sustainability regimes in the UK, EU and other jurisdictions. See our new Quick Guide which deals with the main EU instrument regulating pollutant emissions from large industrial installations and intensive livestock rearing farms: the Industrial Emissions Directive 2010/75/EU (IED), as amended in 2024.

UK: Law Society publishes new guidance for in-house lawyers on managing climate change risks

On 3 August 2026, the Law Society of England and Wales published new guidance for in-house legal counsel on how climate change risks should be managed. This supplements the Law Society's earlier guidance on the impact of climate change on solicitors published in 2023. The new guidance argues that climate risk is now a mainstream legal, governance and business issue that falls squarely within solicitors' existing professional duties. It emphasises that in-house lawyers should help their organisations understand and manage climate-related legal risks across compliance, contracts, litigation, disclosures, procurement, financing and risk management, while ensuring boards are properly informed of both the risks climate change poses to the organisation and the organisation's own climate impacts. The guidance also highlights the increasing importance of climate-related reporting requirements, human rights considerations, supply-chain due diligence and horizon-scanning for emerging regulatory and commercial risks. A key theme is the growing legal and reputational exposure associated with greenwashing. For more information, see our blog post. 

UK: Unlocking the queue? Ofgem’s proposed reforms for data centre connections

In this client briefing, we explain Ofgem’s proposed reforms to tackle growing congestion in Britain’s electricity connection queue, driven largely by data centres, which account for around 73 GW of demand applications. To discourage speculative projects and prioritise viable developments, Ofgem proposes a substantial returnable commitment fee for data centres seeking connections of 40 MW or more, alongside new project progression milestones for schemes above 10 MW that require evidence of commercial, technical and financial readiness. While the reforms aim to free up network capacity and accelerate connections for strategically important projects, they could create significant funding and compliance challenges, particularly for smaller developers, by requiring large financial commitments and customer offtake evidence at an early stage. The consultation remains open until 16 September 2026, and forms part of a broader government, Ofgem and NESO programme to reform demand-side connections and support strategic infrastructure planning. See our client briefing for more information. 

UK: CCUS Transition Access Agreement: UK Government publishes Policy Position Statement

The Department for Energy Security and Net Zero (DESNZ) has published a Policy Position Statement (PPS) setting out its minded-to positions on a number of key commercial provisions of the proposed CCUS Transition Access Agreement (TAA). The TAA is a new form of contract being developed for Carbon Capture, Utilisation and Storage  (CCUS) projects that do not require the level of support provided by an existing CCUS Business Model contract. The publication of the PPS follows the release in February of the TAA Draft Commercial Principles and provides updates on policy evolution since then in relation to key commercial provisions. For more information, see our blog post. 

UK: Energy Systems Catapult publishes updated assessment of hydrogen BECCS technologies

On 28 July 2026, the Energy Systems Catapult published an Updated Assessment of Hydrogen BECCS technologies, commissioned by the Department for Energy Security and Net Zero (DESNZ)  (the Report). The Report assesses the potential of hydrogen production from biomass with carbon capture and storage (H2BECCS) technologies, their scope for deployment in the UK and role in net zero. The Report’s findings include that biomass gasification with carbon capture and storage (CCS) is the most commercially advanced H2BECCS route given its existing global and commercial deployment (excluding CCS) and is the technology expected to dominate UK H2BECCS capacity by 2050. The updated modelling shows a slower initial deployment than previously anticipated (due to higher capex and tighter build-rate limits), before accelerating post-2045 to around 6 GW in the UK by 2050. The Report identifies key barriers being high capital costs, hydrogen offtake/demand volatility and biomass competition. Stakeholders have called for targeted government support through long-term policy alignment and robust financial incentives to reduce investor uncertainty. 

EU CSDDD: Top 5 things you need to know & key dates

In this podcast, we explain the top five things you need to know about the EU’s Corporate Sustainability Due Diligence Directive (CSDDD / CS3D), which will apply to all in-scope companies from 26 July 2029. EU Member States have until 26 July 2028 to transpose the Directive into national law. Click here to listen to our podcast. Click here to see our CSDDD key dates.         

EU Forced Labour Regulation: Top 5 things you need to know & key dates 

In this podcast, we explain the top five things you need to know about the EU’s Forced Labour Regulation (FLR), which will start applying on 14 December 2027. Click here to listen to our podcast. Click here to see our Forced Labour Regulation key dates. 

EU Deforestation Regulation: Commission adopts Delegated Act on product scope and Implementing Act on the Information System

On 13 July 2026, the European Commission adopted a Delegated Act amending Annex I to the EU Deforestation Regulation (EUDR) and an Implementing Act updating the rules on the EUDR Information System. These measures are part of the Commission’s EUDR Simplification Package published in May 2026 and provide further clarity ahead of the Regulation’s application from 30 December 2026 for large and medium-sized operators and traders, and from 30 June 2027 for micro and small operators and traders.

Several products are removed from Annex I to the EUDR, and thus the Regulation’s scope, including cattle hides, skins and leather, retreaded tyres, soybean seeds for sowing, certain rubber products, conveyor and transmission belts, and aircraft and motor vehicle seats. The Delegated Act adds soluble coffee, certain palm oil derivatives, frozen cattle tongues, and certain soap products to Annex I. These newly added products will become subject to EUDR requirements from 30 December 2027. For more information, see our blog post. 

UK: Government proposes mandatory disclosures and financial penalties for modern slavery reporting

On 30 June 2026, the UK Government introduced the Immigration and Asylum Bill into the House of Commons. Part 5 of the Bill proposes significant amendments to the section 54 of the Modern Slavery Act 2015 (MSA) reporting regime - introducing mandatory disclosures, financial penalties, and new reporting obligations for public authorities.  The Bill, if adopted in its current form, would make the content of modern slavery statements mandatory. In-scope organisations would be required to report against prescribed topics set out in a new Schedule 4ZA to the MSA, including risk assessments, policies, due diligence processes, training, and effectiveness measures. For more information, see our blog post.

Australia: Modern slavery legal reform - criminal liability and new compliance expectations

There has been an important development in Australian modern slavery law for companies with an annual revenue of more than $100 million. Australia is moving from a reporting and transparency requirement to a corporate criminal and civil liability regime. Early indications from the Attorney General’s Department suggest the Australian government intends to enact these reforms by next year, although there will likely be a transition period.

The proposed offences are:

• a corporate criminal offence where companies fail to prevent modern slavery.

• a civil penalty regime for non-compliance with modern slavery reporting obligations.

The government is consulting on penalties, deferred prosecution agreements, and remedies for victims. There will be a statutory defence where companies can show they took reasonable steps to prevent modern slavery. See the briefing note prepared by our colleagues at Allens for more detail. 

UK: Government launches landmark consultation on comprehensive equal pay and pay transparency reform 

The UK Government has recently published a major consultation with proposals to comprehensively reform pay discrimination and pay transparency in the UK, from changes to existing equal pay laws and ‘levelling up’ rights for ethnic and disabled workers, to new requirements for employers to disclose pay information to job applicants and establishing a new Equal Pay Regulation and Enforcement Unit. The proposals are significant and comprehensive. In our latest blog post, we outline the key proposals and give some context for how we got here and what comes next. 

Singapore: ACRA consults on Singapore’s Sustainability Disclosure Standards

In May 2025, the Accounting and Corporate Regulatory Authority (ACRA) established an Interim Sustainability Standards Committee (the Interim SSC) to develop the Singapore Sustainability Disclosure Standards (the Singapore SDS), as well as sustainability assurance, ethics and independence standards. On 27 July 2026, the Interim SSC published a consultation paper on the exposure drafts of the Singapore SDS. The Singapore SDS have been developed based on the International Sustainability Standards Board’s (ISSB) IFRS standards and are a further step in Singapore’s implementation of its sustainability reporting regime. The consultation closes on 25 October 2026. For more information, see our blog post. 

Singapore: MAS publishes its Sustainability Report 2025/2026

On 14 July 2026, the Monetary Authority of Singapore (MAS) published its 2026 sustainability report, setting out its strategy on climate resilience and environmental sustainability to strengthen the resilience of Singapore’s financial sector to environmental risks, develop a vibrant sustainable finance ecosystem, build a climate-resilient investment portfolio and incorporate sustainable practices in its organisation.

Singapore: Public consultation on Digital Infrastructure Bill – sustainability elements 

On 1 July 2026, the Ministry of Digital Development and Information (MDDI) and the Infocomm Media Development Authority (IMDA) launched a public consultation on a draft Digital Infrastructure Bill (Bill), which aims to strengthen the security and resilience of digital infrastructure services and improve the environmental sustainability of data centre (DC) operations in Singapore. The consultation closed on 22 July 2026.

Among others, the Bill introduces a new licensing regime for DC operators, requiring operators of DCs with a critical IT load of at least 3MW to apply to IMDA for a DC licence. The licensing requirements are intended to impose and uplift baseline sustainability standards across the DC sector. In assessing an application, IMDA will consider the applicant’s experience and capability in operating a DC and the DC's energy and water efficiency, and may also take into account the DC's energy sources (including the renewability of those sources and the greenhouse gas emissions associated with electricity generation) and the extent to which the applicant’s operations are of economic or strategic importance to Singapore. Licensed operators will be required to meet facility-level energy efficiency requirements, specifically power usage effectiveness (PUE) requirements, with the Bill also empowering IMDA to prescribe IT equipment energy efficiency and facility-level water efficiency requirements in the future. For more information, see MDDI news release and consultation note.

Singapore: Gprnt announces partnership with SGX Group to strengthen climate reporting through ESGenome 

On 2 July 2026, Gprnt and SGX Group announced a partnership to enhance SGX’s ESGenome digital disclosure portal by integrating it with Gprnt’s nationwide sustainability reporting utility. The upgraded portal will help SGX-listed companies meet expectations around ISSB-based climate-related disclosures, reporting of scope 3 emissions and transition planning. 

China rolls out a wave of ESG-related 15th Five-Year plans

In March 2026, the National People’s Congress approved the Outline of the 15th Five-Year Plan (2026-2030) for National Economic and Social Development (the National Plan), which establishes five binding 2030 targets in the green and low-carbon category, being a 17% reduction in CO₂ emissions per unit of GDP, a 25% share for non-fossil energy in total energy consumption, average PM2.5 concentration in cities falling below 27 micrograms per cubic metre, a nationwide good-quality water body ratio of 85% and a forest coverage rate of 25.8%. Beyond these binding indicators, the National Plan also devotes a dedicated section to green transition tasks and objectives, covering carbon peaking, environmental quality, ecosystem diversity and green production and lifestyles. Throughout July 2026, the State Council and relevant ministries issued a series of sectoral plans translating these targets and objectives into sector-specific roadmaps, including:

• The 15th Five-Year Plan for Building Beautiful China (published by the State Council on 3 July 2026): It sets 18 headline targets for building Beautiful China, comprising six binding targets (the National Plan’s five binding targets plus one additional binding target on reducing total emissions of major pollutants) and 12 anticipatory targets spanning four areas: environmental quality improvement, coordinated pollution-and-carbon reduction, ecosystem protection, and environmental risk prevention and control. The plan also sets out key tasks including tackling air, water and soil pollution, controlling solid waste, restoring and optimising ecosystems, responding to climate change, transitioning to green production and lifestyles, and safeguarding ecological and nuclear safety. 

• The 15th Five-Year Carbon Peaking Action Plan (published by the State Council on 9 July 2026): In addition to reaffirming the targets of a 17% reduction in CO₂ emissions per unit of GDP and a 25% share for non-fossil energy by 2030, the plan also sets out detailed capacity targets for wind, solar, hydropower, nuclear power and energy storage, and measures on strengthening the national carbon market, product carbon footprint management and green finance.

• The 15th Five-Year Plan for Solid Waste Pollution Prevention and Control (published by the Ministry of Ecology and Environment together with five other departments on 14 July 2026): China’s first five-year plan dedicated to solid waste pollution prevention, introducing four headline targets (including a hazardous waste landfill disposal ratio capped at 10% by 2030) and supporting around 200 cities in carrying out “zero-waste city” construction.

• The 15th Five-Year Plan for Renewable Energy Development (published by the National Development and Reform Commission (NDRC) and the National Energy Administration on 23 July 2026): It aims for total renewable energy consumption to reach about 1.8 billion tonnes of standard coal equivalent by 2030. It also sets a target of around 3.5 billion kilowatts of total installed renewable power generation capacity, including more than 2.8 billion kilowatts from wind and solar. In addition, the plan requires mandatory minimum renewable energy consumption targets for key industries and supports zero-carbon factories, the use of renewable energy in buildings and transport, and international cooperation on renewable energy projects, industry, standards and certification.

• The 15th Five-Year National Climate Change Response Plan (published by the Ministry of Ecology and Environment together with 18 other departments on 29 July 2026): It forms a targets-and-action pairing with the 15th Five-Year Carbon Peaking Action Plan. By 2030, in sectors covered by the national carbon market, CO₂ emissions per unit of output are set to drop by around 3% compared with 2025. A national voluntary carbon credit market will be established that is transparent, built on unified methodologies, open to broad participation, and aligned with international standards. A system for tracking products’ carbon footprints will be largely in place by then, alongside tighter monitoring of non-CO₂ greenhouse gases.

• The 15th Five-Year Plan for Industrial Green and Low-Carbon Development (published by the Ministry of Industry and Information Technology on 31 July 2026): It targets industrial-sector CO₂ emissions peaking by 2030, supported by seven anticipatory indicators, including cutting energy consumption per unit of value-added of above-scale industrial enterprises by more than 10% and building around 500 zero-carbon factories.

China brings supply chain due diligence-related countermeasures against six US entities

On 5 August 2026, China’s Ministry of Commerce issued an order imposing countermeasures on six US entities. These measures were introduced in response to recent US sanctions on Chinese companies linked to alleged forced labour. According to the Ministry of Commerce, the six entities had assisted or supported US sanctions relating to activities connected to the Xinjiang region of China. Among the six US entities – Applied DNA Sciences, Inc., Stratum Reservoir, LLC., Altana Technologies, Inc., Responsible Business Alliance, Verite Group, Inc., and Human Rights in China – subject to the countermeasures are several technical due diligence and assurance providers used by multinationals to support compliance with supply chain due diligence requirements under EU and US regimes. The order prohibits organisations and individuals within China from engaging in transactions, cooperation or other related activities with these six entities. While there are elements underlying the countermeasures that seem unique to the circumstances of these entities, the enforcement should be seen as an indicator to businesses operating in China that compliance uplift in respect of the new supply chain security rules from earlier this year is crucial.

China: CCDC publishes biodiversity finance environmental benefit information disclosure indicators

On 7 July 2026, China Central Depository & Clearing Co., Ltd. (CCDC) published the CCDC Biodiversity Finance Environmental Benefit Information Disclosure Indicator System (the Indicator System). Biodiversity finance refers to financial activities that support biodiversity projects, i.e. projects that promote the protection, restoration and sustainable use of biodiversity. The Indicator System addresses how the environmental benefits generated by biodiversity projects can be measured and disclosed in a standardised way, and is the first such indicator system developed in China specifically for biodiversity finance. For each of the different categories of biodiversity projects, it sets out a corresponding group of indicators, drawn from a bank of 50 quantitative indicators and one qualitative indicator. The Indicator System applies to use cases supported by CCDC across the full lifecycle of biodiversity financial products, including issuance, valuation, collateral management, disclosure, statistics and monitoring, research, and database management. It is intended to make such disclosures more measurable, verifiable and testable, standardise the underlying indicator system, and improve the transparency of environmental benefit reporting by issuers and certification bodies.

China: Ministry of Ecology and Environment releases a draft allowance cap and allocation plan

On 27 July 2026, China’s Ministry of Ecology and Environment released a draft allowance cap and allocation plan for its national emissions trading system covering the power sector for 2025 and 2026 and proposed arrangements for steel, cement and aluminum smelting sectors for 2026. The consultation proposes tighter emissions-intensity benchmarks for the power sector while maintaining free allocation of allowances and sets out the intensity-based allocation methodology for the steel, cement and aluminium smelting sectors. The draft also references, for the first time, a future move towards a mixed allocation system combining free and paid allocation. The consultation ended on 5 August 2026.

China: Shanghai Stock Exchange issues enhanced ESG disclosure initiative

The Shanghai Stock Exchange (SSE) issued its “Corporate Value and Return Enhancement” 2.0 initiative, applying to all SSE-listed companies (see SSE’s press release). The initiative is structured around five pillars: business operations, corporate governance, information disclosure, investor returns and social responsibility. The social responsibility pillar encourages companies to enhance the quality of their ESG report disclosure, identify material ESG topics and reflect their environmental, social and governance practices. The initiative also aims to strengthen corporate governance standards and compliance awareness among directors and senior management, while encouraging companies to set quantitative targets and strengthen implementation measures. The SSE also issued a supporting model text to help companies better formulate their new round of special action plans. 

Hong Kong’s Securities and Futures Commission and the China Securities Regulatory Commission announce measures to deepen cooperation, including on climate transition plans

On 3 August 2026, the Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) jointly announced a series of new measures to further deepen practical cooperation and foster closer coordinated development between the two markets. One of the measures is promoting pilot programmes for listed companies in both places to disclose climate-related transition plans, with a view to jointly advancing the development of green finance. 

South Korea’s Financial Services Commission publishes roadmap for sustainability disclosures

On 8 July 2026, South Korea’s Financial Services Commission (FSC) published its final version of the roadmap for mandatory sustainability (ESG) disclosures (the Roadmap) (see FSC’s press release). This publication follows the FSC’s consultation in February / March this year (see our March edition of the ESG newsletter). According to the Roadmap, KOSPI-listed companies with total consolidated assets worth KRW10 trillion (or more) will be required to file ESG disclosures from 2028 (for FY2027). The threshold will be lowered to KRW5 trillion (or more) from 2029 (for FY2028). After reviewing the disclosure practices and conditions in 2028-2029, the authorities may consider lowering the threshold to KRW2 trillion (or more) from 2030. These ESG disclosures need to be in the form of corporate business reports required under the Financial Investment Services and Capital Markets Act (FSCMA). In terms of safe harbours, for the first year, affiliates representing less than 10% of the company’s both total assets and sales may be excluded from the report, and for the first three years, companies will be exempted from damage compensations, administrative sanctions, or criminal punishments imposable under the FSCMA with regards to their sustainability disclosures (other than “intentional greenwashing activities”). From the fourth year, a further safe harbour will apply specifically to inherently uncertain information such as forecasts, estimates, or third-party-sourced data, provided disclosures are made in good faith. Third-party verification of the sustainability disclosures will be required from 2030. There is a three-year grace period from reporting on scope 3 greenhouse gas emissions e.g. for companies with total consolidated assets worth KRW10 trillion (or more), the scope 3 disclosure requirement will take effect from 2031; for those with total consolidated assets of KRW5 trillion (or more), from 2032 and for those with KRW2 trillion (or more), from 2033. (** This newsletter is intended merely to highlight issues and is not intended to provide Korean law advice.)

Japan: Regulators finalise revised Corporate Governance Code 

Japan’s Financial Services Agency (FSA) and the Tokyo Stock Exchange (TSE) have finalised the 2026 revision of the Corporate Governance Code (see the FSA’s announcement and the TSE press release) (the Code). The revised Code, together with the corresponding amendments to TSE's Securities Listing Regulations, took effect on 21 July 2026. For information on the Corporate Governance Code, see our May 2026 edition of the ESG newsletter.

Japan: FSA publishes report on practices on management of storm and flood risks in the financial sector

On 17 July 2026, the FSA published a report which illustrates a range of practices among financial institutions in managing financial risks arising from storm and flood damage (storm and flood risks) and providing support for their clients (see FSA’s press release). The FSA surveyed recent developments on the management of storm and flood risks among major banks, regional banks and insurers. The financial institutions covered in the FY 2025 survey widely recognised climate-related financial risks, including storm and flood risks, as key risks.

Japan's Ministry of the Environment publishes consultation and guidelines related to nature

On 21 July 2026, Japan’s Ministry of the Environment launched a consultation on draft “Practical Guidelines for Nature Finance”. The draft aims to support investors and financial institutions in integrating natural capital considerations into investment and lending decisions. The consultation closed on 9 August 2026. 

On 14 July 2026, Japan’s Ministry of the Environment issued practical guidelines towards achieving nature-positive procurement. The voluntary guidance is aimed at companies seeking to implement nature-positive practices, setting out the basic elements of nature-positive procurement together with company case studies. 

Thailand: SEC consults on draft regulations to support transition bonds and Thailand amber bonds

On 22 July 2026, Thailand’s Securities and Exchange Commission (SEC) published a consultation on proposed amendments to draft regulations on the issuance and offering of transition bonds and Thailand amber bonds, as well as amendments to the ESG bond regulations to enhance disclosure standards and expand options for investment and fundraising through new types of debt instruments, thereby promoting climate and environmental transition in line with international standards. This follows the SEC’s consultation on the proposed approach earlier in the year (see our May edition of the ESG newsletter). For both instruments, the draft notifications set out the prescribed characteristics of the instruments and pre-offering disclosure requirements aligned with the components of the applicable standards, alongside post-offering obligations requiring issuers to provide at least annual updates on the use of proceeds and project progress until all funds are allocated, and to disclose promptly any event that materially affects the relevant project at any time before the bond matures. The SEC has also proposed amendments to the disclosure requirements for green bonds, social bonds, sustainability bonds, and sustainability-linked bonds (SLBs), aimed at enhancing their credibility and ensuring clarity and consistency across these instruments. The consultation closed on 21 August 2026.

Thailand: SEC publishes consultation on draft regulations to enhance sustainability-related disclosures for SRI Funds and investments by Thai ESG and Thai ESGX funds in shares of listed companies participating in the JUMP+ Program

On 7 August 2026, Thailand’s Securities and Exchange Commission (SEC) published a consultation seeking public comments on draft regulations to enhance sustainability-related disclosure requirements for Sustainable and Responsible Investing Funds (SRI Funds). Under the proposed amendments, Thai ESG and Thai ESGX Funds that invest in shares of listed companies participating in the Listed Company Value Creation Support Program (JUMP+ Program) will be required to disclose information on such investments and the progress of such companies in the fund factsheet. This disclosure is intended to provide investors with information to support their investment decisions and enable them to better monitor the management of their investments, covering the proportion of fund assets invested in such companies, a breakdown of those companies by their progress in implementing JUMP+ action plans, and the extent of asset management companies’ engagement with those companies over the past year. The proposed amendments would also increase flexibility for SRI Funds by removing the requirement to specify their reference ESG benchmark in their fund scheme (see SEC’s press release). The consultation closes on 6 September 2026.

Indonesia: Financial Services Authority revises carbon exchange trading framework

Indonesia’s Financial Services Authority (OJK) issued Financial Services Authority Regulation Number 10 of 2026 concerning Amendments to Financial Services Authority Regulation Number 14 of 2023 concerning Carbon Trading through Carbon Exchange (POJK 10 of 2026) which was promulgated on 6 July 2026 (see OJK’s press release). POJK 10 of 2026 regulates certain provisions related to: the requirement for all carbon units traded on the exchange to be registered in the new Carbon Unit Registry System (SRUK) which replaces the former national registry; the expansion of the types of carbon units eligible for trading (including international carbon units that are not registered on the domestic SRUK); reporting requirements by the carbon exchange operator to the government ministries and applying consumer protection principles to carbon trading participants.

Presidential actions

On 13 July 2026, President Trump signed proclamations shrinking the Bears Ears and Grand Staircase-Escalante national monuments in Utah by a combined total of approximately 3 million acres, cutting Bears Ears by 1.36 million acres and Grand Staircase-Escalante by 1.87 million acres, citing flaws in the boundaries President Biden had restored in 2021. The administration argued that many of the features within the prior boundaries lacked genuine historic or scientific significance and were already safeguarded under other federal statutes, making the broader monument designations unnecessary. The revised proclamations set Bears Ears and Grand Staircase-Escalante at boundaries smaller than those established under President Biden in 2021 but larger than the pre-monument protected areas. The move lands alongside separate, ongoing litigation in which an appeals court recently sent back to a lower court the question of whether Biden’s 2021 expansion itself exceeded presidential authority by reserving far more land than necessary for protection.

Federal agency actions

On 14 August 2026, the U.S. Securities and Exchange Commission (SEC) announced that it would stop responding to Rule 14a-8 no-action requests indefinitely. Rule 14a-8 addresses when companies are required to include a shareholder’s proposal in their proxy statements for annual or special meetings, and companies have historically sought no-action letters from the SEC before excluding shareholder proposals. The announcement extends a November 2025 announcement that largely suspended the no-action process for the 2025-2026 proxy season but preserved a carve-out for proposals excludable under state law and offered limited “no objection” letters; the August announcement eliminates both. The Rule 14a-8 process has been a primary channel through which shareholders have raised ESG-related topics - including climate risk, diversity, and political spending - at public companies, and the no-action letter framework provided a predictable, publicly-documented process for both companies and proposal proponents. Without that framework, companies may choose to exclude shareholder proposals without informal SEC staff review, while others may take a more conservative approach and include ESG-related proposals to reduce the risk of shareholder litigation.

On 11 August 2026, the U.S. Food and Drug Administration (FDA) proposed a rule requiring food companies to notify the agency before introducing new ingredients into the food supply, addressing what the administration has called a regulatory “loophole” in the Generally Recognized as Safe (GRAS) framework. Rather than create a premarket approval regime, the rule would convert the FDA’s voluntary GRAS notification framework into a mandatory one, requiring companies to submit safety data for ingredients they have “self-affirmed” as safe based on an independent expert panel. Submissions would populate a public online inventory, with the FDA required to make a completeness determination within 45 days and a substantive safety determination within 180 days. The FDA acknowledged uncertainty over its statutory authority to mandate GRAS notifications following a recent U.S. Supreme Court decision limiting federal agency authority, and said it is working with Congress on legislative options.

On 6 August 2026, the U.S. Environmental Protection Agency (EPA) released a Toxic Substances Control Act (TSCA) risk evaluation for o-dichlorobenzene (oDCB) and p-dichlorobenzene (pDCB), tentatively concluding that both chemicals present unreasonable risks to human health under certain conditions of use. oDCB is used as a solvent and chemical intermediate, while pDCB is found in household moth repellents, toilet and urinal deodorizers, and related consumer products. EPA is required to complete these evaluations under a 2024 consent decree resolving litigation over delayed reviews of 20 high-priority TSCA substances. Public comments are due 9 October 2026. If finalized, the findings would trigger mandatory risk management rulemaking under TSCA Section 6.

On 31 July 2026, the Department of Homeland Security (DHS), on behalf of the Forced Labor Enforcement Task Force, announced the addition of 43 companies to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List - the single largest expansion since enactment - bringing the total to 187, a 30% increase. The additions, published on 3 August 2026, cover high-priority sectors including aluminum, apparel, copper, cotton, tomatoes, and downstream products. At least 18 listed entities are based outside Xinjiang but sourced material from the region. Effective 3 August 2026, U.S. Customs and Border Protection (CBP) applies UFLPA’s rebuttable presumption that goods produced by these entities are made with forced labor and are prohibited from entering the United States. DHS has designated caustic soda, copper, lithium, red dates, and steel as additional high-priority sectors. Companies with supply chains touching these sectors should review upstream suppliers and origin documentation. For more, see our client briefing and UFLPA Quick Guide.

On 23 July 2026, the U.S. Trade Representative (USTR) concluded its Section 301 investigations into 60 economies, finding that each had failed to adopt or adequately enforce a ban on importing goods made with forced labor. The probe, launched on 12 March 2026 at President Trump’s direction, drew more than 2,100 public comments, two rounds of testimony, and bilateral consultations with over 45 of the governments of the targeted economies. The USTR set a tiered duty structure: (1) a 10% surcharge for economies that have enacted or pledged to enact a forced-labor import ban, a group that includes Argentina, Bangladesh, Canada, India, Indonesia, Mexico, Pakistan, and the United Kingdom, among others; (2) a rate of 10% or 12.5%, net of the Most-Favored-Nation (MFN) rate, for certain products from the European Union, Japan, South Korea, Switzerland, and Taiwan; and (3) a 12.5% rate for all other investigated economies that have taken neither step. The duties took effect on 24 July 2026, subject to carve-outs for raw materials at risk of domestic supply shortages, products whose tariffing could trigger broader economic disruption, and goods that cannot be sourced domestically in adequate quantities.

On 16 July 2026, the Federal Energy Regulatory Commission (FERC) directed the North American Electric Reliability Corporation (NERC) to develop mandatory reliability standards for data centers and other large computational loads by 31 December 2026 and to revise its Rules of Procedure by the same date to include registration criteria for computational-load entities. NERC must also file a Phase II work plan by 1 March 2027. The order leaves the megawatt threshold to NERC’s standards process. At the same meeting, FERC directed the California Independent System Operator Corporation (CAISO) and Southwest Power Pool, Inc. (SPP) to submit a joint report by 30 September 2026 on their coordination of operations along the seams between their respective markets and neighboring balancing authorities, as SPP’s Markets Plus expansion and CAISO’s Extended Day-Ahead Market (EDAM) begin operating adjacent to one another, addressing current coordination, operational challenges, and plans for resolving them.

On 16 July 2026, the EPA Office of Air and Radiation issued a memorandum clarifying that the Clean Air Act’s Acid Rain Program (ARP) does not apply to “islanded” power generation facilities that are not connected to the public electricity grid. The ARP’s regulations generally apply to fossil fuel-fired combustion devices that qualify as “utility units” serving “generators,” terms defined by reference to DOE Form 860 to require that electricity be sold or that the facility report to the U.S. Department of Energy. Because islanded facilities neither sell electricity nor are required to file such reports, EPA concluded they fall outside ARP jurisdiction. EPA cautioned that a facility could become subject to the ARP if it is later connected to the grid, and that the memo does not constitute final agency action for any specific facility; ARP permitting is generally implemented by state air agencies whose requirements may differ from federal ones. EPA characterized the guidance as expanding opportunities for companies to develop and operate islanded power generation facilities for data centers while furthering the principles of the administration’s Ratepayer Protection Pledge, under which companies commit to fund the full cost of the energy and infrastructure needed to power their facilities.

On 14 July 2026, the U.S. Fish and Wildlife Service and National Marine Fisheries Service finalized a rule narrowing what counts as unlawful “harm” under the Endangered Species Act (ESA), eliminating the long-held position that damaging or altering habitat can itself constitute illegal harm. The prior, broader reading was upheld by the Supreme Court three decades ago in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon (1995). The agencies justified the rescission under the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, adopting the interpretation set out in Justice Scalia’s dissent in Sweet Home that “harm” reaches only conduct directed immediately and intentionally against a particular animal. The same day, nine environmental and conservation organizations filed a complaint for declaratory and injunctive relief in the U.S. District Court for the Western District of Washington, alleging the rescission violates the plain text of the ESA and is arbitrary and capricious under the Administrative Procedure Act (APA), that the Services failed to disclose significant environmental impacts in violation of the National Environmental Policy Act (NEPA), and that the agencies violated the ESA by failing to engage in required consultation on the rescission’s impacts on imperiled species and their critical habitat. The plaintiffs seek an order declaring the rescission invalid, vacating it, and reinstating the prior regulatory definitions of “harm.”

On 13 July 2026, the EPA proposed general permits letting coal ash storage facilities access newly proposed compliance flexibilities before individual states update their programs and separately proposed approving a coal ash permitting program submitted by Alabama. The agency acknowledged that state program updates can take years, risking a gap where facilities cannot benefit from new compliance pathways while remaining subject to existing self-implementing requirements. The underlying regulatory changes, proposed in April, would ease closure certification, groundwater monitoring, and disposal requirements for coal ash; EPA has framed the changes as reducing duplicative burdens on facilities already subject to state oversight, while advocacy groups have expressed concern about environmental and community impacts. Regarding Alabama specifically, the EPA preliminarily found the state has adequate regulations, staffing, and funding to run a program offering protection comparable to federal standards, reversing a rejection issued during the prior administration. The approval was supported by a revised agency interpretation allowing previously issued state permits to be excluded from the federal review, though facilities under excluded permits remain directly subject to applicable regulations until the state completes public review.

On 8 July 2026, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice of proposed rulemaking on anomaly response and repair criteria for gas transmission and hazardous liquid pipelines. The proposal moves away from generic, depth-only thresholds adopted in the early 2000s and instead lets operators rely on engineering and inspection tools that have matured over the last two decades, extending a comparable framework already in place for gas lines to liquid and carbon dioxide lines. It collapses the current 60-day, 180-day, one-year, and two-year deadlines into three categories - immediate, near-term, and other conditions - and introduces failure-pressure-ratio and strain-based tests for cracks, corrosion, and dents. 

Congressional actions

On 5 and 6 August 2026, four Republican U.S. senators - Cynthia Lummis, Eric Schmitt, Pete Ricketts, and Jon Husted - introduced four Congressional Review Act (CRA) resolutions - H.J. Res. 210, S.J. Res. 208, S.J. Res. 209, and S.J. Res. 210 - to repeal Clean Air Act (CAA) preemption waivers allowing California to enforce vehicle emissions standards stricter than federal requirements. Each resolution targets a waiver submitted to Congress by the EPA on 12 June 2026: California’s Advanced Clean Cars (ACC) I program, the 2013 ACC I waiver reinstatement, the 2009 greenhouse gas standards for passenger vehicles, and the small off-road engines (SORE) rule. The CRA allows Senate passage by simple majority, without the 60-vote cloture threshold that applies to ordinary legislation. The effort extends a mid-2025 round in which Congress and the President disapproved three other California waivers - for the Advanced Clean Trucks, Advanced Clean Cars II, and Omnibus Low-NOx programs. California sued in the U.S. District Court for the District of Columbia on 22 June 2026, challenging the EPA’s reclassification of the waivers as “rules” subject to CRA review and arguing that waiver decisions are adjudicatory orders never treated as CRA-reviewable rules. On 10 July 2026, EPA moved to dismiss and opposed California’s preliminary injunction motion, arguing the claims are barred by the CRA’s jurisdiction-stripping provision. The case is pending alongside California’s earlier challenge to the 2025 CRA disapprovals in the Northern District of California.

State actions

On 3 August 2026, Texas Governor Greg Abbott ordered state utility regulators to stop approving new data center connections to the Texas grid until every project in the pipeline has been audited. The audit requires collecting information on tax incentives and public financial assistance; reliance on the grid versus on-site energy generation; water sourcing and cooling technology; community-impact measures; and ownership. The directive marks a departure for a state that has actively courted artificial intelligence and hyperscale data center investment and joins a broader national debate about how the electric grid should absorb the surge in AI-driven energy load. The directive does not touch data centers that are already operating, but it stops the clock on the queue of pending projects - and it comes with a preview of legislation Texas is likely to consider in 2027 that would reshape the economics of building a data center in the state. For more information, see our client briefing.

In July 2026, the California Air Resources Board (CARB) took several actions under the state’s SB 253 climate disclosure law. On 27 July, CARB released modified draft regulations for the initial reporting cycle and opened a 15-day public comment period through 11 August 2026. Separately, CARB extended the first Scope 1 and 2 reporting deadline from 10 August to 10 November 2026, giving in-scope companies additional time to prepare their inaugural filings. CARB also previewed proposed regulations for the 2027 reporting cycle at a 21 July workshop, which would introduce category-by-category phased-in Scope 3 emissions reporting and third-party assurance for Scope 1 and 2 disclosures; formal proposed regulations are expected this fall. Enforcement of the companion SB 261 climate-related financial risk reporting law remains stayed under a Ninth Circuit injunction. For more information, see our client briefing on CARB’s SB 253 updates.

On 14 July 2026, New York Governor Kathy Hochul signed Executive Order No. 62, directing state regulators to freeze discretionary environmental permits for new or expanded data centers of 50 megawatts or more - the first statewide moratorium of its kind. The pause, expected to last up to a year, holds applications in abeyance while the Department of Public Service prepares a generic environmental impact statement covering energy demand, water use, air quality, and community effects, and directs state agencies to develop a community investment framework, explore a grid acceleration fund financed by operators, and assess new rules for large-scale water withdrawals. The action responds to a spike in proposed capacity: the New York Independent System Operator’s interconnection queue held roughly 12 gigawatts of data center load requests as of May 2026, more than 8 gigawatts of which arrived during 2025. Hochul is separately weighing a bill lowering the threshold to 20 megawatts and imposing renewable energy and efficiency standards. For more information, see our client briefing on the New York data center moratorium.

On 8 July 2026, North Carolina’s governor signed a $34.4 billion budget for fiscal year 2027 that eliminates a sales tax break for electricity used by data centers. However, other tax breaks for data centers in the state are still in place, including those related to software, equipment, and some business property. The governor had previously asked the state’s Energy Policy Task Force to consider whether repeal or modification of the state’s tax benefits for data centers would be beneficial to the state’s residents.

On 7 July 2026, New Jersey Governor Mikie Sherrill signed a package of three bills on data center regulation and electricity costs. The centerpiece, S731/A796, creates a new ratepayer class and rate structure for large-load data centers (peak demand of 100 megawatts or more), requiring them to pay for their electricity infrastructure and grid upgrades rather than shifting those costs to residential ratepayers, to reduce consumption before residential customers are affected during grid stress, and to participate in a retail demand-offset mechanism. The other two bills address federal return-on-equity incentives for utilities and add state review of certain transmission projects. The administration estimates the package, combined with other recent energy actions, will save New Jersey ratepayers more than $1 billion annually.

ESG litigation

On 18 August 2026, the U.S. Court of Appeals for the District of Columbia Circuit denied petitions brought by industry groups seeking to overturn EPA’s 2024 designation of PFOA and PFOS as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). The court upheld EPA’s determination that these two “forever chemicals” met the statutory criteria for hazardous substances based on their established links to serious health harms and their persistence and bioaccumulation in the environment. The court rejected the petitioners’ arguments that the designation was contrary to law, that EPA’s cost-benefit analysis was arbitrary and capricious and violated notice-and-comment requirements, and that EPA acted unreasonably in regulating despite scientific uncertainties, finding that the EPA had properly considered and explained its decision in making the designation. The ruling leaves in place reporting, land-transfer notice, and shipping-identification obligations tied to PFOA and PFOS releases, as well as the potential for EPA-led cleanup and cost-recovery actions against responsible parties.

Federal offshore and onshore wind development saw significant activity this summer, including administrative remands, lease buybacks now totaling roughly $4 billion (with more than 20 additional leases valued at nearly $2 billion outstanding), and a Defense Department review freeze.

• On 10 August 2026, the U.S. District Court for the District of Columbia granted the federal government’s motion for voluntary remand without vacatur of the Bureau of Ocean Energy Management’s (BOEM) October 2024 Construction and Operations Plan approval for the Atlantic Shores South offshore wind project off the New Jersey coast, and stayed proceedings pending BOEM’s reconsideration. The suit was brought by Save Long Beach Island, Inc. and other plaintiffs alleging that BOEM’s approval violated federal environmental and administrative statutes. BOEM sought remand under 2025 executive directives calling for a review of federal offshore wind approvals; the court held that BOEM has inherent authority to reconsider its own decisions and that remand - which leaves the existing approvals in place until BOEM acts on them - would not work undue prejudice on the developer. A joint status report is due 9 October 2026.
• On 6 August 2026, a major European energy company announced a $1.22 billion settlement with the Department of the Interior to relinquish three U.S. offshore wind leases - in the New York Bight, off Humboldt County, California, and off Lake Charles, Louisiana - citing “no path forward to permit these projects in the U.S. for the foreseeable future.” In exchange, the developer committed roughly $900 million to an indirect equity stake in a Louisiana LNG terminal and $300 million to reserve natural gas turbines for U.S. peaking projects. It is the largest such settlement to date, following earlier deals valued at $795 million and $765 million.
• That same day, a U.S. District Court in Oregon issued a preliminary injunction ordering the Pentagon to resume its national-security reviews of onshore wind energy projects, after clean-energy organizations sued over the review freeze; the court held that the Defense Department could not selectively disregard statutory review deadlines, with more than 100 projects stalled.
• Earlier this summer, on 29 June 2026, Duke Energy agreed to terminate its Carolina Long Bay offshore wind lease - south of Bald Head Island, North Carolina - under a Department of the Interior settlement that redirects roughly $129 million previously tied to the project into new nuclear, natural gas, and grid investments in the Carolinas. Two weeks earlier, on 12 June 2026, Invenergy relinquished four offshore wind leases - the New York Bight lease hosting its 2,400 MW Leading Light Wind project contracted to New Jersey, two Gulf of Maine leases, and its California Central Coast lease - for approximately $765 million, committing to invest an equivalent sum in oil, gas, and geothermal projects.

On 5 August 2026, a divided panel of the U.S. Court of Appeals for the Ninth Circuit held that the EPA exceeded its authority under the CAA when it approved California’s state implementation plans (SIPs) for reducing air pollution in the San Joaquin Valley, and remanded the rule without vacatur to avoid leaving the Valley without contingency measures during EPA’s reconsideration. The rule approved two SIP submissions from the California Air Resources Board and the San Joaquin Valley Unified Air Pollution Control District addressing fine particulate matter (PM2.5) and nitrogen oxides (NOx). Petitioners argued EPA lowered its one-year reasonable-further-progress standard for contingency measures and accepted feasibility justifications to excuse NOx shortfalls. Applying Loper Bright Enterprises v. Raimondo, the panel independently interpreted the CAA and concluded it does not permit a feasibility exemption.

On 4 August 2026, the en banc U.S. Court of Appeals for the District of Columbia Circuit ruled on a preliminary injunction barring the EPA from effectuating its 11 March 2025 Notice of Termination of grants issued under the Inflation Reduction Act’s (IRA) Greenhouse Gas Reduction Fund. Six of ten judges affirmed the portion of the injunction blocking EPA from carrying out the March 2025 termination, holding that EPA likely contravened the IRA’s mandatory appropriation by attempting to terminate the plaintiffs’ grants and claw back already-disbursed funds based solely on a policy disagreement with Section 60103. Four judges would have vacated that portion of the injunction, reasoning that the One Big Beautiful Bill Act’s (OBBBA) repeal of Section 60103 now allows EPA to terminate the grants without violating that provision; the chief judge said he would otherwise have voted to affirm. On the separate question of EPA’s going-forward authority to suspend or terminate the grants - specifically, whether that authority is limited by both the grant contracts and Section 60103 or by the contractual terms alone - the court was equally divided, so the district court’s ruling stands without creating circuit precedent.

On 21 July 2026, a coalition of 19 state attorneys general - led by California, Massachusetts, and Washington - and New York City petitioned the D.C. Circuit for review of a final EPA rule relaxing restrictions on hydrofluorocarbons (HFCs) in commercial refrigeration and air conditioning equipment. The rule, published on 26 May 2026 and effective 27 July 2026, pushes compliance deadlines under the 2023 Technology Transitions Rule from 2026-2027 to 2032 and temporarily raises the allowable global warming potential (GWP) limit from 150-300 to 1,400 for certain subsectors, including supermarket systems and remote condensing units. The states argue the rollback violates the bipartisan American Innovation and Manufacturing (AIM) Act, signed by President Trump in December 2020, which directs EPA to phase down HFC production and consumption by roughly 85% by 2036. The petition raises three arguments: that EPA gave only a 60-day window instead of the AIM Act’s required one-year lead time for deadline changes; that the agency violated the APA by reversing its earlier position without adequate technical justification; and that the rollback undermines the AIM Act’s phasedown by letting high-GWP equipment continue to be installed even as the statute cuts refrigerant supply. The states also contend the rule disrupts markets for manufacturers and retailers that invested in low-GWP technologies in reliance on the original timeline.

On 15 July 2026, the U.S. Court of Appeals for the Seventh Circuit affirmed the remand to Illinois state court of the City of Chicago’s climate-deception lawsuit against fourteen fossil fuel companies and a trade association, holding that the defendants’ asserted federal work was too attenuated from Chicago’s consumer-deception claims to support federal officer removal. Chicago’s complaint, originally filed in Illinois state court in February 2024, asserts state and local law claims alleging that the defendants long understood the climatic effects of burning fossil fuels but intentionally concealed and misrepresented those effects, and seeks damages only to the extent that misinformation caused consumers to use more fossil fuels, and to use them less efficiently, than they otherwise would have. The defendants had grounded removal in their production of fuel for the federal government dating to World War II, but the court held that removal’s “relating to” requirement demands more than a minimal or incidental connection to the plaintiff’s claims - a standard that decades-old wartime fuel production could not meet for a suit targeting later deceptive advertising.

On 14 July 2026, the U.S. District Court for the Southern District of California granted a preliminary injunction in a challenge brought by a coalition of food, packaging and retail trade associations, blocking enforcement of California Senate Bill (SB) 343, the state’s “Truth in Recycling” law, less than three months before its 4 October 2026 compliance deadline. SB 343 restricts when companies may use the “chasing arrows” symbol or otherwise represent that products or packaging are recyclable, generally permitting recyclability claims only if products satisfy California’s statewide recyclability criteria, including a requirement that 60% of the state’s recycling programs collect the material and 60% of sorting facilities process it. A coalition of around 20 food, packaging and retail trade associations challenged the law in March 2026, alleging violations of the First and Fourteenth Amendments. The court found that the plaintiffs were likely to succeed on both their vagueness and commercial speech claims, concluding that four provisions of the statute fail to provide constitutionally adequate notice, that SB 343 regulates “potentially misleading” rather than “inherently misleading” speech, and that the state failed to demonstrate the restrictions would materially advance its stated interests in reducing consumer confusion and improving recycling rates. The court pointed to evidence that manufacturers may respond by removing truthful recyclability claims altogether, potentially leaving consumers with less information rather than more. The order enjoins the California Attorney General and all those in privity or acting in concert with him from enforcing the statute pending further proceedings.

On 6 July 2026, the State of Alaska, the Alaska Industrial Development and Export Authority (AIDEA), and the federal defendants, including the Department of the Interior and the Bureau of Land Management (BLM), filed a stipulation to dismiss two consolidated cases before the U.S. District Court for the District of Alaska without prejudice, pursuant to a settlement agreement. The underlying suits, filed by AIDEA in December 2024 and by the State of Alaska in January 2025, challenged a Biden-era Interior Department plan restricting oil and gas leasing and drilling on Alaska’s coastal plain, which undermined interest in a 6 January 2025 lease sale for the limited parcels made available. Under the settlement, BLM agreed that its decision violated the 2017 Tax Act by preventing congressionally mandated oil and gas development on the coastal plain and by failing to make the statutory minimum acreage available for two lease sales and committed to issue a new decision correcting those deficiencies.

On 2 July 2026, a divided panel of the U.S. Court of Appeals for the Ninth Circuit affirmed summary judgment for the South Coast Air Quality Management District (SCAQMD), holding that the Energy Policy and Conservation Act (EPCA) does not preempt the District’s amended Rule 1146.2, which phases in zero-NOx emission standards for certain appliances, including gas-fired water heaters, boilers, and process heaters, across certain southern California counties. The court explained that the South Coast Air Basin has the worst ground-level ozone in the country and is in “extreme” nonattainment with federal ozone standards under the CAA, putting it at risk of losing federal highway funding. The District adopted the zero-emissions standard in 2022 after determining it was the only viable path to compliance. The panel held that nothing in EPCA’s text, structure, or history suggested Congress intended to interfere with states’ methods of achieving CAA compliance.

On 8 July 2026, a California resident filed a proposed class action in Santa Cruz County Superior Court against a large global berry company, alleging violations of California’s false advertising, unfair competition and Consumer Legal Remedies Act on behalf of a proposed class of California consumers. The suit follows an earlier proposed class action filed on 26 June 2026 by six consumers in the U.S. District Court for the Northern District of California, asserting consumer protection claims under the laws of Illinois, New York, New Jersey and Massachusetts. Both complaints allege that the company marketed its conventional strawberries as safe, sustainably grown and subject to “rigorous food safety and quality standards” while failing to disclose the presence or risk of per- and polyfluoroalkyl substances (PFAS), commonly known as “forever chemicals.” The suits cite independent lab testing published in May 2026 by a consumer advocacy group, which reported finding residues of 12 pesticides on the company’s strawberries, eight of which were classified as PFAS. Both complaints accuse the company of greenwashing, alleging it promoted an environmentally responsible image while using farming practices that involved persistent, fluorinated compounds. The company has denied the allegations in both suits and stated that its berries “are safe to eat and meet all applicable regulatory standards.”

DEI developments

On 25 August 2026, the U.S. Department of Justice announced that it reached a settlement with a multinational professional services company in response to allegations that the company violated federal anti-discrimination requirements under the False Claims Act (FCA). Under federal antidiscrimination laws, government contractors must certify that they will not discriminate against applicants on the basis of race and sex and that applicants and employees are treated the same regardless of race or sex. As part of the settlement, the company will pay $21.5 million to resolve allegations under the FCA that it falsely certified its compliance with federal antidiscrimination laws while using discriminatory practices during the hiring, promotion, and staffing processes and offering certain professional development opportunities to select employees based on their race and sex. The settlement also resolves claims brought under the FCA’s qui tam provisions (which allow private individuals or organizations to file suit on behalf of the government and share in any recovery) by a private organization, which will receive $4.3 million of the recovery. The company did not admit liability under the settlement.

On 6 August 2026, the U.S. Department of Justice’s (DOJ) Civil Rights Division announced investigative findings that Duke University School of Law intentionally discriminated based on race in admissions for its 2023, 2024, and 2025 incoming classes, in violation of Title VI of the Civil Rights Act of 1964 and the Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard. The Department found that Duke Law used diversity-related essay questions and applicant “tagging” practices as proxies for race, resulting in Black and Hispanic applicants having a substantially higher likelihood of admission than white or Asian applicants with comparable academic credentials. The DOJ is seeking a voluntary resolution agreement with the Law School; if negotiations fail, it is prepared to file suit. 

On 4 August 2026, the American Bar Association (ABA) took two votes that leave Standard 206 - its longstanding accreditation rule requiring law schools to demonstrate a commitment to diversity in recruitment, admissions, and student programming - on track for repeal. The ABA’s House of Delegates first voted against a proposal to repeal the standard, but then passed a second resolution authorizing the ABA’s Council of the Section of Legal Education and Admissions to the Bar to repeal the standard on its own - mooting the first vote, since the Council (not the House) is the accreditation body recognized by the U.S. Department of Education and had already voted in May 2026 to eliminate Standard 206. The Council is expected to exercise that authority before a September 2026 hearing on ABA accreditation before the Department of Education’s National Advisory Committee on Institutional Quality and Integrity. Standard 206 has been suspended since February 2025, and President Trump signed an April 2025 executive order directing the Education Secretary to assess whether to revoke the ABA’s status as the recognized law school accreditor over its DEI requirements. Florida and Texas have separately begun allowing their state supreme courts to accredit law schools independently of the ABA.

On 30 July 2026, five nonprofit organizations filed suit in the U.S. District Court for the Western District of Washington against the U.S. Department of Agriculture (USDA), challenging new terms and conditions the USDA is imposing on grant recipients. The challenged conditions require grantees to agree not to promote “unlawful DEI” or “gender ideology,” not to use grant funding to create incentives for “illegal” immigration, and not to operate any programs that advance DEI - including activities funded by non-federal money. The USDA has stated that the conditions are intended to align federal grant programs with executive policy requiring equal treatment without regard to race, sex, or other protected characteristics. The plaintiffs allege the conditions are unconstitutionally vague, restrict First Amendment rights, and exceed the USDA’s statutory authority. Two plaintiff organizations have declined to accept USDA funding rather than agree to the conditions, with one organization foregoing nearly $700,000. The plaintiffs are seeking preliminary relief to stay the conditions while the case proceeds.

On 23 July 2026, the U.S. Equal Employment Opportunity Commission (EEOC) published a proposed rule that would eliminate the EEOC’s annual workforce demographic reporting requirements, including the EEO-1 report - which since 1966 has required private employers with 100 or more employees and certain federal contractors with 50 or more employees to submit data organized by job category, race or ethnicity, and sex - as well as the EEO-2 through EEO-6 reports covering labor organizations, state and local governments, public school systems, and higher education institutions. The EEOC stated that the reports are overly burdensome, offer insufficient enforcement utility, and may be inconsistent with Title VII and potentially unconstitutional, and estimated aggregate annual cost savings of approximately $275 million for reporting entities and $5 million for the agency. The proposed rule does not affect the EEOC’s authority to request workforce and personnel records during individual discrimination investigations. Comments were due 24 August 2026; current reporting obligations remain in effect unless and until a final rule is issued.

On 6 July 2026, the EEOC published in the Federal Register a final interpretive rule rescinding its 1979 guidelines on voluntary affirmative action under Title VII of the Civil Rights Act of 1964 and the related Compliance Manual Section 607, effective immediately. The EEOC had voted to rescind the guidelines on 29 June 2026. The guidelines had provided employers with a framework for adopting voluntary affirmative action plans that took race, sex, or national origin into account in limited circumstances and served as a safe harbor defense under Section 713(b)(1) of Title VII. The EEOC stated that the guidelines were inconsistent with the text of Title VII and contradicted subsequent Supreme Court precedent, citing the Court’s 2025 decision in Ames v. Ohio Department of Youth Services. The rescission does not alter Title VII itself or overrule existing Supreme Court precedent permitting narrowly tailored affirmative action plans, but employers can no longer invoke the EEOC’s guidance as a good-faith reliance defense for future actions. Affirmative action obligations for veterans and individuals with disabilities remain unaffected.

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