Employment & Incentives Half-Day Conference 2024

This event on 13 November 2024 in London will feature discussions from UK experts and key-note speakers on topical employment and remuneration themes and will be an opportunity to share ideas and network with peers in the market.

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Greenwashing Outlook Half-Day Conference

Join us on 27 November 2024 in London for our in-person half-day “Greenwashing Outlook” conference where, together with representatives from HM Treasury, UK and EU regulators, AFME and panellists from financial institutions, we will be navigating the real-life, real-time challenges in this space. We will discuss the evolution of the greenwashing debate and explore how financial firms and corporates can build organisation-wide compliance against a backdrop of myriad differing local and sectoral regimes.

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EU: ESMA announces materiality assessments and taxonomy disclosures to be enforcement priorities for 2025 corporate reports

The European Securities and Markets Authority (ESMA) has published its annual European Common Enforcement Priorities statement for 2024 corporate reporting. The guidance outlines the areas that ESMA, together with European enforcers, will focus on as they review corporate reports in 2025. ESMA warns that enforcers will take enforcement actions wherever material misstatements are identified. On sustainability statement, ESMA lists three priorities, namely: materiality assessments under the CSRD ESRS, scope and structure of sustainability statements, and taxonomy disclosures. For more information, see our blog post.

EU: EFRAG published first draft of the Transition Plan Implementation Guidance

On 4 November 2024, the European Financial Reporting Advisory Group (EFRAG) held the first public meeting of the Sustainability Reporting Technical Expert Group (SR TEG) to discuss the draft Implementation Guidance on Transition Plan for Climate Change Mitigation (TP IG). This guidance is non-authoritative and accompanies the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD), but does not form part of them.

The documents for the meeting, including an early draft of the TP IG, are available here. EFRAG plans to have the draft TP IG approved by the SR TEG and the Sustainability Reporting Board (SRB) before the end of 2024. EFRAG intends to release the draft for public feedback in January-February 2025 and publish the final document in the second quarter of 2025.

The guidance includes five sections, covering the European framework, disclosure requirements for climate transition plans, connections to other European regulatory frameworks and international standards, and Frequently Asked Questions (FAQs). The TP IG refers to sector-agnostic ESRS, which apply to all undertakings, regardless of which sector or sectors they operate in. It will not, therefore, fully address the sector-specific challenges related to reporting on climate mitigation transition plans. The TP IG specifically mentions that further clarifications on transition plans for financial institutions will be provided in the sector standards.

EU: CSRD entered into force in Italy

The Corporate Sustainability Reporting Directive (CSRD) aims to fundamentally change the approach to sustainability reporting in the EU. It was due to be transposed into national law in every EU Member State by 6 July 2024. On 25 September 2024, the CSRD finally entered into force in Italy. The transposition of the CSRD in Italy has occurred without significant gold-plating, although several options allowed by the CSRD have been exercised. The sanctions for non-compliance with the sustainability reporting obligations are similar to those provided for non-compliance with financial reporting. Until 25 September 2026, the administrative fines are capped, unless the relevant violation constitutes a criminal offence. Read more on transposition of the CSRD in Italy in our client alert. View our CSRD transposition tracker to monitor national transposition across Member States.

EU Deforestation Regulation: Commission publishes guidance and proposes 12-month delay to application date

On 2 October 2024, the European Commission announced several updates regarding the EU Deforestation Regulation (EUDR). These updates include a proposal to delay the application of the EUDR by 12 months (to 30 December 2025), guidance on the EUDR, updated frequently asked questions (FAQs), and the principles of the methodology for the EUDR benchmarking exercise, which will classify third countries as low, standard, or high risk for due diligence purposes. The EUDR requires operators and traders placing commodities like cattle, wood, cocoa, soy, palm oil, coffee, rubber, and related products such as leather, chocolate, tyres, or furniture on the EU market, or exporting these products from the EU, to prove that the products do not come from recently deforested land or contribute to forest degradation. The Regulation imposes supply chain due diligence requirements on companies, with the main obligations starting on 30 December 2024 (unless the proposed 12-montyh delay is agreed), subject to transitional provisions. For more information, see our blog post.

On 16 October 2024, the Council agreed with the Commission proposal. On 23 October 2024, the European Parliament approved the use of the urgent procedure for the adoption of this file, and the formal Plenary vote is planned for 14 November. According to the Council press release, the aim is to have the amendment formally adopted by both co-legislators and published in the Official Journal of the EU by the end of 2024.

German watchdog reports on the first year of the Supply Chain Due Diligence Act

As the regulatory landscape for global supply chains tightens, Germany's Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG) has emerged as a significant piece of legislation with profound implications for businesses, which allows for insights into what can be expected from public enforcement under the EU’s Corporate Sustainability Due Diligence Directive (CSDDD). The Federal Office for Economic Affairs and Export Control (BAFA) recently published its Accountability Report (Rechenschaftsbericht) for 2023, covering the LkSG's initial year of application. For more information, see our blog post.

UK: Key recommendations from House of Lords Select Committee report on the Modern Slavery Act 2015

In October 2024, the House of Lords Select Committee on the Modern Slavery Act 2015 (MSA Committee) published a report, which sets out a series of recommendations for how the UK can reform its existing legislation on modern slavery to bring it in line with international best practice. The report follows an inquiry commenced in January 2024 tasked with examining, among other things, the efficacy of the provisions of the UK Modern Slavery Act 2015 (MSA 2015) relating to supply chains.

The MSA 2015, once a trailblazing piece of legislation which introduced a corporate reporting requirement, has since been overtaken by regimes such as the EU’s Corporate Sustainability Due Diligence Directive (CSDDD/CS3D). See our blog post for our analysis of the main recommendations from the report relevant to businesses and the section 54 requirements.

Global: ICMA publishes paper on role of commercial paper in the sustainable finance market

On 7 October 2024, the International Capital Market Association (ICMA) released a paper exploring the development of the sustainable commercial paper (CP) market – worth up to €300bn according to ICMA’s estimates – and the potential this market may play as part of an issuer’s wider sustainable financing strategy. The paper provides an overview of the two main categories of sustainable CP in the market: (i) use of proceeds CP, where net proceeds (or an equivalent amount) are used to finance or refinance eligible green, social or sustainable projects in alignment with an issuer’s sustainable financing framework; and (ii) sustainability-linked CP, a more nascent category, where the CP is linked to ESG ratings or an issuer’s performance based on either of key performance indicators that are consistent with the issuer’s broader sustainability strategy or sustainability-linked financing framework. For more information, see our blog post.

EU: European regulators to intensify their focus on implementing the sustainable finance framework in 2025

The European Supervisory Authorities have each published their work programmes for 2025 setting out their strategic priorities for the coming year. Sustainable finance remains one of the top priorities for all three regulators. According to its 2025 Annual Work Programme, ESMA will intensify its focus on implementing the sustainable finance legal and supervisory framework, combating greenwashing, and promoting transparency in sustainable investments. For the EBA, work on prudential treatment of exposures in relation to ESG will remain one of its focal points. For EIOPA, sustainable finance remains one of its priorities being present in all areas of its work, including embedding ESG in the prudential and conduct frameworks. For more information, see our blog post.

EU: ESAs 2024 report show significant improvements of firms’ disclosure of principle adverse impacts under SFDR

The European Supervisory Authorities (ESAs) have published their third annual report on disclosures of Principal Adverse Impact (PAI) under Article 18 of the Sustainable Finance Disclosure Regulation (SFDR). Building on the two previous reports that the ESAs have published since the entry into force of the SFDR, the 2024 report provides an overview of good practices related to the location, clarity and complexity of the disclosures. The report also includes recommendations to the European Commission and to national competent authorities (NCAs), thereby providing an indication of what regulators will expect firms to deliver going forward and that further guidance, such as via CEO letters, is likely to come.

The findings from this year’s survey showed significant improvement in the quality of the responses provided by the NCAs, both on the quantitative and qualitative side, with a greater sample size and higher representation in terms of number of FMPs covered, reflecting an improving state of PAI disclosures generally. For more information, see our blog post.

UK: Transition Finance Market Review publish recommendations for unlocking transition finance in the UK and globally

The Transition Finance Market Review (TFMR) is an independent market-led review commissioned by the UK government and hosted by the City of London Corporation. The review was led by Vanessa Havard-Williams, former co-head of Linklaters’ environment and climate change practice, and a member of the UK Transition Plan Taskforce (TPT) delivery group. The TFMR launched a call for evidence in March 2024 to explore the barriers to scaling transition finance and how the UK could become a global hub for funding the global net zero transition. On 17 October 2024, the TFMR published a report with its final recommendations on scaling an effective and credible transition finance market. In our blog post and accompanying video, we explore the final recommendations of the TFMR and what it means for the development of an effective and credible transition finance market in the UK and globally.

UK: Transition Plan Taskforce concluded its work and published the final report

On 31 October 2024, the UK Transition Plan Taskforce (TPT) officially concluded its work and published a final report providing an overview of its achievements and future prospects. The report outlines key opportunities and challenges for the global adoption of transition plans, including enhancing market capabilities, sharing best practices, developing decision-making tools, and fostering global consistency in transition planning norms. The report highlights four key areas where collective efforts could be focused in the future: (i) building market capabilities, practice and sharing experiences, (ii) developing enabling tools and driving thought leadership, (iii) ensuring that transition plans are integrated into decision-making (for example, C-Suites and boards should use transition plans as a change management tool) and (iv) increasing global consistency in transition planning norms and expectations.

Launched in March 2022, the TPT was tasked with developing a “gold standard” for climate transition plan disclosures. On 9 October 2023, it released the TPT Disclosure Framework and accompanying guidance with good practice recommendations to help over 40 sectors in creating climate transition plans. In April 2024, further guidance and advisory papers on nature, just transition and adaptation were published, supporting the application of the Disclosure Framework. In June 2024, the International Financial Reporting Standards (IFRS) Foundation announced that it assumed responsibility for TPT’s disclosure materials and will use them to support company disclosures against IFRS S1 and IFRS S2. For more information, see our blog post.

UK: PRA provides banks with feedback on accounting for climate risk

The Prudential Regulation Authority (PRA) has sent a “Dear CFO” letter to a selection of banks providing feedback from its thematic review of written auditor reports received in 2023. Among other matters, the review included its findings on accounting for climate risks. The aim of the findings is to encourage banks to identify improvements that can be made in capabilities in quantifying the impact of climate risk on expected credit loss (ECL). The PRA suggests they will also be helpful for firms applying IFRS that are not in scope of written auditor reporting. For the next round of written auditor reporting, the PRA has asked for auditors’ views on the firm’s progress against the areas of focus on ECL set out in the letter. The PRA encourages firms to engage with their auditor by performing their own assessment against the areas of focus. In 2025, the PRA plans to focus on disclosures to help users understand the effect of climate risk on firms’ exposure to credit risk, how the effect of climate risk has been considered in ECL measurement, and underlying assumptions and judgements. For more information, see our blog post.

UK: FCA provides SDR & investment labels pre-contractual disclosure examples

On 1 November 2024, the FCA updated its Sustainability disclosure and labelling regime webpage to include a document providing illustrative examples across a selection of labels to showcase how applicants can meet the pre-contractual disclosure requirements. The examples are based on the FCA’s experience of applications to date. The FCA's view is that much of the practice identified in their document will be relevant across all investment labels - the examples are intended to aid firms as they prepare their own documentation. Firms should note that these examples are non-exhaustive.

EU: Commission publishes Ecodesign Regulation FAQs

On 27 September 2024, the European Commission published a comprehensive Frequently Asked Questions (FAQs) on the Ecodesign for Sustainable Products Regulation (ESPR), which entered into force on 18 July 2024. The FAQs provide preliminary clarifications on the ESPR and addresses a wide range of topics, from the scope of the Regulation to specific product categories, the Digital Product Passport, the Ecodesign Forum and the timeline for implementation. The Commission noted that the answers reflect a common understanding between Commission services and the Market Surveillance Authorities of Member States and are not legally binding. For more information on the ESPR, see our client briefing.

UK: Navigating ESOS Phase 3

The UK’s Energy Savings Opportunity Scheme (ESOS) is an energy usage assessment scheme that requires in-scope organisations to audit their energy usage every four years. The audit assessments must cover energy consumed by buildings, industrial processes, and transport, and the Environment Agency (EA) administers the scheme.

The scheme runs in four-year cycles. Phase 3 ended on 5 December 2023 and Phase 4 commenced the day after. For ESOS Phase 3, in-scope undertakings were required to have conducted an ESOS assessment over a 12-month period which includes 31 December 2022 and ends before 5 December 2023. The deadline to complete and submit to the EA a notification of compliance with the audit requirement was 5 June 2024. Organisations that meet the criteria for Phase 3 and have not yet submitted a notification of compliance should do so as soon as possible.

The ESOS regime was amended at the end of 2023 to introduce new requirements for in-scope undertakings to publish ESOS action plans and prepare annual progress updates. The plans and progress updates are intended to help undertakings identify what energy savings actions they should implement over coming years. The deadline to prepare and submit an ESOS action plan to the EA is 5 December 2024. ESOS progress updates must be prepared and submitted by 5 December in 2025 and 2026. For more information, see our blog post.

COP 16

The sixteenth meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 16) concluded on 1 November 2024. COP 16 was the first Biodiversity COP since the adoption of the Kunming-Montreal Global Biodiversity Framework at COP 15 in December 2022 in Montreal, Canada (see our blog post on the results of COP15). We will cover the results of COP16 in our blog post that will be published soon and in the next issue of the Newsletter.

The impact of the EU’s Corporate Sustainability Reporting Directive on businesses in Asia

The EU’s Corporate Sustainability Reporting Directive (CSRD) seeks to fundamentally change the approach to sustainability reporting and it is biting on organisations now. The CSRD introduces new requirements for large companies and all companies listed on EU regulated markets, as well as some non-EU companies, to report on a wide spectrum of sustainability issues, including environmental matters, social and human rights, and governance factors. Given the CSRD does not only affect EU companies, but also non-EU companies with businesses operating in the EU, in our blog post we consider how the CSRD potentially impacts businesses in Asia.

The impact of the EU’s Corporate Sustainability Due Diligence Directive on businesses outside the EU

The EU Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) is set to revolutionise corporate responsibility in global supply chains and require companies to adopt climate transition plans. In-scope companies will be required to establish and implement processes to identify and take action in relation to the adverse human rights and environmental impacts of their operations, as well as those in their value chains. The regime can apply outside the EU, both in terms of the companies it brings into scope, the diligence that needs to be undertaken worldwide, and the indirect effects the new rules will have as they are cascaded up and down value chains. In addition, in-scope companies must adopt and implement climate transition plans and set climate targets in line with the Paris Agreement. In case of infringements, companies may be held liable and face significant financial penalties. Member States have until 26 July 2026 to transpose the Directive into national law. It will then apply on a phased basis to in-scope companies from 26 July 2027. For information on how the CSDDD is likely to impact businesses outside of the EU, including in Asia, listen to Episode 9 of our CSDDD Explained podcast series.

Hong Kong SAR publishes voluntary code of conduct for ESG rating and data providers

The Hong Kong Code of Conduct for ESG Ratings and Data Products Providers (the Code) was published on 3 October 2024. This is a voluntary code which providers of ESG ratings and data products can sign up to in order to demonstrate their commitment to sound and transparent practices when providing their ESG products. The development of the Code is sponsored by the Securities and Futures Commission (SFC) which, in October 2023, appointed the International Capital Market Association (ICMA) to convene an industry working group and provide the secretariat to develop a voluntary code of conduct for the Hong Kong market. The publication of the Code follows the public consultation in May this year. For more information, see our blog post.

Hong Kong Monetary Authority publishes its sustainable finance action agenda

The Hong Kong Monetary Authority (HKMA) published its Sustainable Finance Action Agenda (the Action Agenda) on 21 October 2024. The Action Agenda sets out HKMA’s vision to further consolidate Hong Kong’s position as the sustainable finance hub in the region and support the sustainable development of Asia and beyond. For the key components of the Action Agenda, and the next steps to be taken by industry participants and the HKMA, see our blog post.

China issues new opinions on green finance

On 12 October 2024, the People’s Bank of China and three other ministries jointly issued the Opinion on Giving Full Play to the Role of Green Finance in Serving the Construction of a Beautiful China (Opinion). The Opinion proposes 19 key measures covering four aspects: (i) increasing support in key areas; (ii) enhancing professional services capabilities in green finance; (iii) enriching green financial products and services; and (iv) strengthening safeguards for implementing the Opinion. In particular, the Opinion sets out several key policy measures, including improving the structural monetary policy tools by expanding its scope of support, fully leveraging the role of the carbon market by extending its coverage, and establishing a sound assessment and evaluation system for green finance in financial institutions.

Japan Hydrogen Update – application for CfD subsidy approaching

On 24 May 2024, Japan enacted the Hydrogen Society Promotion Act, which introduced a 15-year contract-for-difference support subsidy (CfD Subsidy) to provide approved business plans for the supply of low-carbon fuels such as hydrogen, ammonia, e-methane and synthetic fuels. Funded through the ¥20trn "GX economy transition bond programme", ¥3trn was allocated to the CfD Subsidy. It is expected that Japan’s Ministry of Economy, Trade and Industry will publish their responses to public comments, the final enforcement order, and enforcement regulation shortly, with the application process for the CfD Subsidy to start in October 2024, and at least one business plan to be approved by the end of the year. For more information, see our client briefing.

Malaysia consults on sustainability reporting framework requirements

On 24 September 2024, Bursa Malaysia Securities Berhad, Malaysia’s Securities Commission, issued a public consultation paper seeking feedback on the proposed amendments to the Main Market listing requirements and ACE Market listing requirements relating to sustainability reporting requirements based on the National Sustainability Reporting Framework (the Framework). The Framework is intended to ensure “consistent, comparable and reliable sustainability information” in Malaysia. The Framework will be implemented through a phased and developmental approach, requiring listed issuers and large non-listed companies to use the ISSB Standards and requiring reasonable assurance on Scope 1 and Scope 2 greenhouse gas emissions. The Framework adopts a climate-first approach through prioritising climate-related disclosures in support of Malaysia’s net-zero goals. The Framework will apply to Main Market listed issuers (i.e., established companies that have met the quality, size and operations requirements), Access, Certainty Efficiency (ACE) Market listed issuers (i.e., companies assessed by sponsors to have growth prospects) and large non-listed companies with annual revenues meeting or exceeding RM 2bn (approx. US$420m) for two consecutive financial years preceding the current financial year. For more information, see our blog post.

Malaysia publishes draft climate change bill for public consultation

On 4 October 2024, the Ministry of Natural Resources and Environmental Sustainability (NRES) published for consultation the proposed Climate Change Bill / Rang Undang-Undang Perubahan Iklim Negara (RUUPIN). It is intended that the RUUPIN will act as an umbrella legislation that governs all relevant climate change related issues and should be applied throughout Malaysia. The RUUPIN is intended to complement existing regulations and policies by providing a supporting framework for future climate related legislations and regulations at national and subnational level. The consultation sets out the principles, objectives, and high-level framework of the RUUPIN, which includes setting national greenhouse gas (GHG) reduction targets, establishing a regulatory entity, developing a National Integrated Climate Data Repository (NICDR), and regulating carbon trading mechanisms. It is proposed that an emissions threshold will be set at a facility level, and facilities will be able to manage and trade their emissions allowances under the emissions trading scheme established under this new legislation. This will be in addition to the voluntary trading scheme already available on the Bursa Carbon Exchange.

Singapore consults on its decarbonisation journey

On 8 October 2024, Singapore’s National Climate Change Secretariat (NCCS) launched a public consultation to gather feedback on the nation’s decarbonisation plans. The consultation closes on 5 November 2024. In addition to views on Singapore’s decarbonisation journey generally, the NCCS is seeking views on the following key measures: (i) carbon tax: increasing the carbon tax to $45/tCO2e in 2026 and 2027, with a view to reaching $50-$80/tCO2e by 2030; (ii) importing low-carbon electricity: importing low-carbon electricity from regional power grids, with the aim of importing 6 gigawatts (GW) of low-carbon electricity by 2035 (up from the previous goal of 4 GW); (iii) solar deployment: introducing solar deployment plans to achieve at least 2 gigawatt-peak by 2030, including through innovative methods such as floating solar farms and building integrated solar photovoltaic; (iv) carbon capture and storage (CCS): working with international partners to pursue cross-border CCS projects to decarbonise hard-to-abate sectors such as energy, chemicals, power and waste; (v) industry energy efficiency measures: supporting businesses in improving their energy efficiency through support schemes such as the Energy Efficiency Grant, Resource Efficiency Grant for Emissions, and the Investment Allowance for Emissions Reduction; (vi) minimum energy performance standards: implementing minimum energy performance standards for household appliances and buildings; (vii) adoption of cleaner energy vehicles: introducing policies and measures to encourage use of cleaner energy vehicles; and; (viii) carbon credits: accessing global mitigation opportunities through international carbon credits.

Singapore’s Energy Market Authority announces development of future grid capabilities roadmap

On 21 October 2024, Singapore’s Energy Market Authority (EMA), in collaboration with SP Group, announced that it is developing a Future Grid Capabilities Roadmap (the Roadmap) to address issues arising from the nation’s decarbonisation of its power sector. It highlighted that Singapore’s energy supply mix will become more diverse with the growing deployment of domestic solar and electricity imports, and its electricity grid will be more complex with the addition of distributed energy resources (DERs) (e.g. rooftop solar photovoltaics, battery energy storage systems and electric vehicle chargers). The Roadmap, which is slated to launch later this year, is intended to adapt Singapore’s electricity grid to manage such new complexities. The EMA also proposes a regulatory sandbox to explore the benefits of virtual power plants (VPPs) to support DERs. On 21 October 2024, the EMA also issued a Grant Call to select participants to co-fund and conduct feasibility studies for CCS projects in the power sector.

Singapore: New legislation to protect platform workers

The Singapore Parliament passed the Platform Workers Bill on 10 September 2024 to strengthen legal protections for platform workers providing ride-hailing and freelance delivery services to end-users under the control of platform operators. The Platform Workers Act 2024 will take effect on 1 January 2025. This is a landmark development in the Singapore employment landscape as the legislation creates a new category of workers in addition to employees and the self-employed, to provide baseline statutory rights and protections to individuals whose work arrangements mean that they do not meet the employee eligibility criteria but are in a more vulnerable bargaining position in setting their terms of engagement than traditional freelancers. For more information, see our client briefing.

Pollution litigation

On 17 October 2024, the District of Columbia Attorney General filed suit in the D.C. Superior Court against a large infrastructure construction company, alleging that the company illegally contaminated the city’s stormwater system with pollutants in violation of the D.C. Water Pollution Control Act. The plaintiff claims the company allowed unauthorized contaminated runoff from its storage and maintenance yard to enter the city’s stormwater system. The plaintiff seeks declaratory relief and civil penalties.

Also in October, the New Jersey Department of Environmental Protection and the Department Commissioner sued a corporate property in New Jersey state court, alleging ongoing pollution of the groundwater and soil despite years of orders to remediate. The plaintiffs claim the ongoing pollution is dangerous and in violation of several state environmental laws. The plaintiffs seek enforcement of a 2011 order imposing civil penalties against the property.

On 25 September 2024, a vinegar production company reached a US$1.1m settlement with the Maryland Department of the Environment, resolving allegations that the company’s manufacturing facility discharged pollutants into State waters. As part of the consent decree, the vinegar company agreed to, inter alia, weekly testing at points along the waterway near the facility.

On 7 October 2024, an oil refinery and a shipping company settled with an environmental NGO to resolve allegations that the companies had discharged toxic petroleum coke, an oil refinery waste product, from a refinery in California into nearby waterways. Also in October, a biotech company reached a US$35m settlement with the City of Los Angeles, resolving allegations that it engaged in a decades-long misinformation and deception campaign to prolong the manufacture, sale, and use of polychlorinated biphenyls (“PCBs”) in its products, leading to alleged damages to natural resources and water treatment facilities and programs.

Oil and gas litigation

Lawsuits in the oil and gas sector continued to develop this month. On 7 October 2024, the County of Multnomah, Oregon filed suit in state court against multiple gas and oil corporations, alleging the companies deceptively promoted fossil fuel products as harmless despite knowing that carbon pollution emitted by their products would cause harmful climate impacts. The complaint argues that while defendants had rights to create emissions, they were not permitted to “conceal and misrepresent the dangers of their products’ emissions”, leading to extreme heat events. The plaintiff seeks over US$51bn in damages.

On 8 October 2024, a California state court judge issued a ruling concerning nine coordinated climate change actions brought by the California Attorney General and local governmental entities against various oil and gas companies, alleging that the defendants engaged in a climate misinformation and deception campaign to promote their fossil fuel products. The Court denied the defendants’ motion to dismiss the lawsuits for lack of personal jurisdiction, finding that the defendants’ alleged conduct and plaintiffs asserted injuries occurred, in substantial part, in California.

On 10 October 2024, two environmental NGOs filed a lawsuit in the US District Court for the Eastern District of Tennessee challenging the Tennessee Valley Authority’s decision to build a new methane gas plant without considering reasonable alternatives or evaluating the potential climate, environmental, and customer impacts. The plaintiffs argue that the agency’s failures violate the Administrative Procedure Act (“APA”) requirement to engage in reasoned decision-making and the National Environmental Policy Act’s (“NEPA”) mandate to engage in a “hard look” at the effects and alternatives of its projects. The plaintiffs seek declaratory and injunctive relief, as well as an order for the agency to revise its analysis of cleaner energy alternatives.

PFAS litigation

Lawsuits alleging per- and polyfluoroalkyl substances (“PFAS”) contamination continue to be on the rise. On 30 September 2024, an environmental group filed a lawsuit in California state court against a feminine care company, alleging that a brand of its panty liners contains Perfluorooctanoic Acid (“PFOA”). The plaintiff claims that the PFOA in the panty liners can be directly exposed into the bloodstream through vaginal tissue and can lead to adverse reproductive effects, developmental effects in children, increased risk of some cancers, reduced ability of the body’s immune system to fight infections, and interference with the body’s natural hormones. The plaintiff seeks injunctive relief and civil penalties.

In early October 2024, a resident of New York and a resident of Alabama filed separate lawsuits in the US District Court for the District of South Carolina against several major chemical manufacturers, alleging that they ingested PFAS-contaminated drinking water caused by the defendants’ Aqueous Film-Foaming Foam (“AFFF”) products. The plaintiffs claim that their exposure to these toxic levels of PFAS caused them to suffer from ulcerative colitis and kidney cancer, respectively, as well as other physical injuries, pain, and emotional distress. The plaintiffs seek compensatory and punitive damages. Also in October, a group of residents of Nantucket, Massachusetts filed a class action lawsuit in the US District Court for the District of Massachusetts against various chemical companies, alleging that PFAS chemicals from the defendants’ AFFF products were discharged into Nantucket’s water supply and ultimately contaminated the plaintiffs’ wells, groundwater, soils and property. The plaintiffs are seeking punitive damages.

On 14 October 2024, a group of residents of Wicomico County, Maryland filed a lawsuit in the US District Court for the District of Maryland against a farming company, alleging that the defendants failed to monitor and control excessive levels of PFAS in the groundwater at defendants’ agribusiness facility—contaminating the plaintiffs’ residential groundwater and damaging the plaintiffs’ property and health. The plaintiffs seek monetary damages and injunctive relief.

Greenwashing developments

On 21 October 2024, the US Securities and Exchange Commission (“SEC”) fined an asset management firm US$4m for misrepresentations that three of their investment funds considered ESG factors. According to the SEC, the firm relied on outdated and incomplete third-party data and did not properly screen for investments in companies involved in fossil fuels and tobacco. In addition to the US$4m payment, the company was served with a cease-and-desist order.

On 1 October 2024, a judge in a US District Court of Maryland dismissed a class-action lawsuit against a major airline. Plaintiffs in the lawsuit claimed that the airline violated the Maryland Consumer Protection Act (“MCPA”) by charging higher prices with “false” and “misleading” claims of using sustainable aviation fuel. The airline argued that since the argument centered on prices, then the claim was pre-empted by the federal Airline Deregulation Act (“ADR”). The judge agreed and dismissed the suit with prejudice.

Legislative action

California continues to lead the charge in US climate legislation. On 1 October 2024, California’s fracking ban came into effect—prohibiting the state oil and gas regulator from issuing fracking permits for oil and gas wells. In September 2024, California’s Governor Gavin Newsom signed three bills, Assembly Bills 3233, 1866, and 2716 which, inter alia, permit local entities to impose restrictions on oil and gas operations in their jurisdictions, require well operators to file plans to manage and eliminate idle oil wells, and mandate the plugging and abandoning of all oil wells within the boundary of the Baldwin Hills Conservancy.

Also in October, Governor Newsom signed Senate Bill 261, which modifies some requirements in California’s climate disclosure bills. Starting 1 January 2026, the bill will require businesses with annual revenues over US$500m to report climate-related financial risks and “measures adopted to reduce and adapt to climate-related financial risk.” Additionally, Governor Newsom signed the Responsible Textile Recovery Act of 2024 (Senate Bill 707). The bill mandates that all textile and apparel producers form Producer Responsibility Organizations (“PRO”) by 1 March 2026. Each PRO must submit to the California Department of Resources Recycling and Recovery a comprehensive plan for the collection, transportation, repair, sorting, and recycling, and the safe and proper management, of apparel and textile articles. The plan must be submitted and reapproved every five years or otherwise be subject to penalties of up to US$50,000 per day.

Climate change mitigation projects

On 18 October 2024, the US Department of Energy’s (“DOE’s”) Office of Fossil Energy and Carbon Management, along with the DOE’s Hydrogen Fuel Cell Technologies Office, announced that they would be providing more than US$58.5m in federal funding that will support pilot projects and testing facilities to demonstrate and scale carbon dioxide removal technologies that reduce carbon pollution by removing it from the atmosphere. Also in October, the DOE announced US$428m in grants for 14 projects to develop domestic clean energy manufacturing in 15 coal communities throughout the US The projects will focus on manufacturing products and materials that address multiple needs in the domestic clean energy supply chain involving grid components, batteries, low-carbon materials, clean power generation, and energy efficiency products.

On 23 October 2024, the US Department of Agriculture announced US$1.5bn in funding for 92 conservation projects that will support (i) use of innovative technologies to reduce enteric methane emissions in livestock, (ii) water conservation efforts in the West, ensuring producers and communities have the tools they need to adapt in the face of continued drought pressures, (iii) the promotion of terrestrial wildlife habitat conservation and restoration, and (iv) tribal-led conservation projects.

Regulatory litigation

On 16 October 2024, the US Supreme Court issued an Order denying emergency requests from 28 different states, various industry groups, and energy companies to stay enforcement of the US Environmental Protection Agency’s (“EPA”) latest rule curbing greenhouse gas emissions from power plants (GHG Emissions Rule) while they are challenging it in the US Court of Appeals for the D.C. Circuit. Under the GHG Emissions Rule (issued in April 2024), coal-fired and new gas-fired power plants set to operate past 2039 have until 2032 to meet a carbon dioxide emission standard equivalent to installing a carbon capture and storage system and running it at 90% efficiency. Power plants not expected to meet this standard must plan to cease operations before 2039. This Order marks the third time this term that the justices have allowed EPA rules to stay in place while litigation continues in a lower court. For more information on the Order, please see our article.

Carbon litigation

On 4 October 2024, the US Attorney’s Office for the Southern District of New York and the FBI charged two CEOs and their company for their alleged involvement in a scheme to fraudulently obtain voluntary carbon credits, which were then sold on the global carbon credits market, and misleading an investor to secure over US$100m. The allegations in the indictment include manipulating survey data to inflate emission reductions, falsifying survey forms, and selling fraudulently obtained carbon credits among other claims. The two CEOS face charges including wire fraud conspiracy, wire fraud, commodities fraud conspiracy, commodities fraud, securities fraud conspiracy, and securities fraud. Each charge carries significant potential prison sentences.

Decoding the CSRD: A step-by-step guide to becoming CSRD ready – Watch the recording

At a glance: UK Governance and Risk: Autumn 2024 – Read our guide