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Trump Administration actions

EPA announces details of its reorganization. On May 2, the EPA announced a major reorganization that will eliminate several key offices, including the Office of Atmospheric Protection (OAP), Office of Air Quality Planning and Standards (OAQPS), and the Office of Research and Development (ORD), with staff being reassigned to address statutory obligations and essential functions. A new Office of Applied Science and Environmental Solutions (OASES) will be established within the Office of the Administrator, gaining over 130 experts to address significant backlogs in chemical and pesticide reviews. Within the Office of Air and Radiation (OAR), two new offices – the Office of Clean Air Programs (OCAP) and the Office of State Air Partnerships – will be created to improve collaboration with state, local, and tribal agencies and to enhance transparency and efficiency in regulatory development. The Office of Water will also be reorganized to better integrate scientific research with the development of regulations, guidance, and policy. Although the creation of OCAP will add about 500 new positions, the overall number of EPA positions will continue to decline sharply, with the elimination of the ORD alone affecting approximately 1,500 jobs. Also see our coverage of litigation over the reorganization.

Among specific changes coming at EPA:

• Proposed repeal of two key emissions standards. On May 2, EPA submitted proposed repeals of two key atmospheric emissions standards to the White House Office of Management and Budget: the Mercury and Air Toxics Standards (MATS) and what it is referring to as Carbon Pollution Standards. At this writing, it remains unclear which specific standards the latter repeal is targeting; some sources say this could broadly affect a number of regulations, and others speculate that the repeal would affect the GHG emissions standards under Section 111 of the Clean Air Act. Although the agency is legally required to regulate carbon emissions from the highest-emitting sectors, EPA has not yet indicated whether it will propose alternative standards.
  
  
• Energy Star, appliance regulations on the chopping block. On May 6, the Washington Post reported that as part of the elimination of the OAP, the EPA will also eliminate the popular Energy Star program, a public-private partnership that certifies energy-efficient home appliances. Since its creation in 1992, Energy Star has saved businesses and consumers $500 billion while keeping 4 billion metric tons of GHGs out of the atmosphere. The EPA’s sweeping reorganization plan would reportedly eliminate all Energy Star staff and offices. Furthermore, the EPA intends to roll back environmental standards for numerous gas and electric appliances, aiming to change 47 regulations that affect everything from faucets and microwaves to dishwashers and stoves. The changes, the Department of Energy stated, would “cut more than 125,000 words from the Code of Federal Regulations.”
  
  
• EPA signals intention to modify Biden Administration’s National Primary Drinking Water Regulation for PFAS. In an announcement on May 14, the agency indicated that it plans to propose a rulemaking this fall that will among other things, retain certain existing maximum contaminant levels and rescind and reconsider others, while creating a “federal exemption framework.” Find out more.

The Department of the Interior has also been busy this month. Among significant actions:

• On May 14, the Department announced the proposed rescission of the Bureau of Land Management’s Rights-of-Way, Leasing, and Operations for Renewable Energy rule, which governs solar and wind energy development on public lands. The rule, promulgated in May 2024, encouraged investment in solar and wind projects on public lands by cutting fees about 80 percent. Interior Secretary Doug Burdum stated, “Eliminating the Biden administration's preferential treatment of unaffordable, unreliable 'intermittent' projects and dismantling excessive, one-sided restrictions on traditional energy sources like oil, gas, and critical minerals, will unlock the full potential of America’s natural resources.”
  
  
• On May 2, the Department said it intends to revise the Risk Management and Financial Assurance for OCS Lease and Grant Obligations rule, which aimed to protect the government against lessee defaults by increasing the financial assurance requirements for oil and gas lessees and grant holders seeking to operate on the Outer Continental Shelf. Interior Secretary Burgum stated, “Cutting red tape will level the playing field and allow American companies to make investments that strengthen domestic energy security and benefit the Gulf of America states and their communities.” 

DOJ says USDA’s purged climate and farm support pages will be restored. On May 12, the Department of Justice told the US District Court for the Southern District of New York that the numerous climate, conservation, and agricultural support resources that were removed from the USDA’s website on January 31 this year will be restored. The return of the purged pages is the result of a lawsuit filed in the SDNY in February by a coalition of agricultural and environmental advocacy groups. In a letter to the court, the DOJ stated that the purged USDA content – a vast trove of materials about conservation practices, rural clean energy, climate-smart farming, and access to federal loans – would be fully restored in about two weeks. The DOJ also said that, going forward, “USDA commits to complying” with such federal laws as the Freedom of Information Act and “the adequate-notice and equitable-access provisions of the Paperwork Reduction Act.” See our earlier coverage of this story here.

NOAA will no longer track the cost of major weather disasters. The National Oceanic and Atmospheric Administration (NOAA) announced this month that its National Centers for Environmental Information will stop updating the Billion-Dollar Weather and Climate Disasters database. Events after 2024 will no longer be listed on the database, and the existing information will be archived. The database, described by prominent meteorologist Dr. Jeff Masters as the world’s “gold standard” for evaluating the costs of extreme weather, has for decades gathered information from multiple sources – such as insurance organizations, state agencies, and FEMA – to estimate losses arising from individual disasters. In February and March, hundreds of NOAA meteorologists and staffers were fired or took early retirement, reportedly leaving about 40 percent of the nation’s weather forecast offices with significant staffing vacancies. On May 16, NOAA opened what it calls a "period of reassignment," asking meteorologists and staff still at the agency to consider transferring to fill some of these critical National Weather Service slots.

Administration shelves “social cost of carbon” metric. Federal agencies have been ordered by the White House to stop including the “social cost of carbon” – a metric indicating the environmental impact of climate change – when writing regulations, unless its use is explicitly required by law. The federal government has used the social cost of carbon metric for more than 20 years in considering the benefits and costs of policies and regulations. In a May 5 memorandum, Jeffrey B. Clark, acting administrator of the White House Office of Information and Regulatory Affairs, stated that “it is no longer federal government policy to maintain a uniform estimate of the monetized impacts of greenhouse gas emissions.” Clark went on to deride the scientific consensus regarding climate change, such as “whether and to what degree any supposed changes in the climate are actually occurring as a consequence of anthropogenic greenhouse gas emissions.”

The second Trump Administration’s first 100 days. Our alert explores some common themes in the developing enforcement posture of this Administration - changes in the enforcement landscape that place added pressure on compliance.

Visit our hub. For updates on breaking developments, see our hub, Navigating the presidential transition: Legal and regulatory insights.

Disclosures and voluntary reporting

As Omnibus I moves ahead, an EP committee contemplates even bigger changes. The European Parliament’s Committee on Economic and Monetary Affairs (ECON Committee is reportedly considering amendments to the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) that would dramatically cut the number of companies required to report. The changes are said to go beyond the amendments in the Omnibus I package, which itself proposes “simplification measures” to the CSRD, CSDDD, the EU Green Taxonomy, and the Carbon Border Adjustment Mechanism. The number of companies required to report would reportedly be slashed by about 80 percent – only companies with more than 1,000 employees or annual revenue greater than €50 million would need to report their sustainability data. Information requirements would also be scaled back.

Singapore launches sustainability reporting guide for business professionals. Singapore’s Accounting and Corporate Regulatory Authority (ACRA) has released its Sustainability Reporting Body of Knowledge (SR BOK), a guide to educate Singaporean business professionals on sustainability reporting that aligns with International Sustainability Standards Board (ISSB) standards. The launch of the SR BOK is part of the country’s broad Singapore Green Plan 2030, which the government describes as a “whole-of-nation movement” aiming to achieve net zero emissions by 2050.

Greenwashing

Settlement reached in greenwashing lawsuit against major Australian energy provider. EnergyAustralia, one of the Commonwealth’s leading energy companies, has reached a settlement with the activist group Parents for Climate in what is reportedly the first greenwashing case brought against a utility company in Australia. The litigation, brought in the New South Wales Federal Court, focused on EnergyAustralia’s GoNeutral program, under which the company calculated emissions linked to consumers’ energy consumption, then purchased carbon offsets that, the company said, rendered energy consumption “carbon neutral.” Consumers participating in the program, the company said, would have a "positive impact on the environment." Parents for Climate charged that the carbon offsets did not truly neutralize emissions and called the company’s claims misleading and deceptive. On May 15, Parents for Climate’s attorneys told the court that a settlement had been reached and that the group would file to discontinue proceedings. On May 18, as part of the settlement, EnergyAustralia released a statement that begins, “EnergyAustralia acknowledges that carbon offsetting is not the most effective way to assist customers to reduce their emissions and apologises to any customer who felt that the way it marketed its Go Neutral products was unclear. EnergyAustralia has now shifted its focus to direct emissions reductions.” It continued, “Offsets do not prevent or undo the harms caused by burning fossil fuels for a customer’s energy use.” According to the Government of Australia, EnergyAustralia is the country’s third largest emitter of GHGs.

Environmental: Regulatory

Senate votes to overturn California Clean Air Act waivers. On May 22, the Senate voted, 51-44, to overturn one of California’s Clean Air Act (CAA) waivers. Existing CAA preemption waivers grant California (and several states that follow California rules) the authority to enact vehicle emissions standards that are more stringent than federal standards. In March, the House passed three resolutions under the Congressional Review Act (CRA) seeking to overturn those waivers: HJ Res 87, a resolution that would reverse the EPA waiver for Advanced Clean Trucks; HR Res 88, which would terminate the California “Advanced Clean Cars II” regulations; and HJ Res 89, which would terminate California’s heavy-duty “Omnibus” low-NOx rule and Advanced Clean Cars II. Then, on April 4, the Senate Parliamentarian, Elizabeth MacDonough, issued a legal opinion stating that Congress does not have the legal authority to strike down the California CAA waivers under the CRA because the waivers are administrative adjudications, not rules, and are therefore not subject to the CRA. The Government Accountability Office similarly concluded that the CRA does not authorize congressional withdrawal of the CAA waivers. Majority Leader John Thune chose to proceed with the vote, despite the Parliamentarian’s ruling. On May 22, California Attorney General Rob Bonta announced that the state will sue the Trump Administration over Congress’s withdrawal of the waiver. A Senate vote on the remaining waiver is anticipated soon.

Senate votes to overturn a Clean Air Act rule for major industrial facilities. Deploying the Congressional Review Act, on May 1, the US Senate moved to overturn a 2024 rule that requires major industrial facilities to maintain strict pollution controls. The rule, Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act, requires about 1,800 factories around the country that emit certain chemicals – alkylated lead compounds; polycyclic organic matter; mercury; hexachlorobenzene; polychlorinated biphenyls; 2,3,7,8-tetrachlorodibenzofurans; and 2,3,7,8-tetrachlorodibenzo-p-dioxin – to tighten their air pollution controls. Should the House also move to overturn the rule, this would be the first time in the 58-year history of the Clean Air Act that Congress has succeeded in weakening it.

Stakeholders share their views at workshop on California climate disclosure laws. On May 29, the California Air Resources Board (CARB) staff conducted a public workshop to present details of CARB’s rulemaking efforts under California’s climate disclosure laws (SB 253, SB 261, and SB 219) and to collect stakeholder views on the process and substance of the eventual regulations. In 2023, California passed SB 253, requiring large companies doing business in California to annually disclose their GHG emissions, and SB 261, requiring disclosure of material climate-related financial risks. In 2024, both laws were amended by SB 219 after Governor Gavin Newsom sought additional time to implement them. Under SB 253, companies doing business in California and having over $1 billion in annual revenues will be required to report their Scope 1 and Scope 2 GHG emissions starting in 2026, and their Scope 3 emissions starting in 2027. Companies doing business in California and having more than $500 million in annual revenues will be required to disclose their climate risks in accordance with the TCFD or a successor standard on or before January 1, 2026. With passage of SB 219, the exact reporting deadlines for GHG disclosures in 2026 and 2027 will be determined by CARB in its rulemaking, which SB 219 provides shall conclude by July 1, 2026. By contrast, SB 261 does not have a regulatory mandate for climate risk disclosures, although CARB is seeking feedback on whether regulations would be an appropriate approach to implementing that law. The workshop opened with remarks from California Senators Scott Weiner and Henry Stern, the authors of SB 253 and SB 261, respectively. They assured gathered stakeholders that implementing and enforcing these laws would proceed according to the legislature’s prescribed timeline. But CARB shared that it now expects to issue final regulations “by the end of 2025” as opposed to the July 1 deadline. Multiple stakeholders raised concerns that year-end regulations could leave insufficient time for covered companies to prepare for compliance with the reporting deadlines, and especially the January 1 deadline for climate risk under SB 261. Beyond that, a significant portion of CARB’s presentation and the stakeholder feedback focused on how to define key terms like “doing business in California” and “revenue,” and on definitions and procedures relevant to consolidated parent-level reporting for subsidiaries. Multiple commenters also urged CARB to avoid deviation from the GHG Protocol in its regulations on emissions reporting given the legislature’s intent to minimize duplication of efforts. Stakeholders also sought clarification on climate-risk disclosure requirements under SB 261, such as whether the TCFD guidelines from 2017 or 2021 would be deemed the minimum standard and whether GHG disclosures should be deemed part of climate-risk reporting as directed under the TCFD and similar standards. CARB took note of the comments and assured stakeholders that the rulemaking process would be iterative and provide ample opportunity for further input and engagement. CARB made its presentation materials available beforehand and expects to share a video recording of the workshop in the coming days.

California: Proposed budget would reauthorize cap-and-trade program. California Governor Gavin Newsom has unveiled his proposed 2025-2026 budget, which includes a 15-year extension of the state’s Cap-and-Trade Program. The proposed budget would reauthorize the carbon trading program, a quarterly auction of emissions permits, through 2045. Newsom forecast this move last month in an announcement that he would ask the state legislature to extend the long-running emissions program, originally signed into law by Governor Arnold Schwarzenegger in 2006. Newsom also proposes to rename the program from Cap-and-Trade to Cap-and-Invest, the name borne by the similar programs in New York and Washington states. The program’s auctions reportedly bring California about $4 billion in revenue every year. About $1.5 billion of those revenues would move to the general fund to support the California Department of Forestry and Fire Protection. The proposed budget also guarantees a minimum funding level of $1 billion a year to support construction of a high-speed rail system. At this writing, legislative negotiations over the budget have begun. California Senate President Pro Tem Mike McGuire and Assembly Speaker Robert Rivas have already pledged to support the cap-and-trade program’s reauthorization. The reauthorization bills are AB 1207 and SB 840.

New York state budget features largest climate spend in state history. New York state’s 2026 budget allocates $1 billion to support the Sustainable Future Program, which Governor Kathy Hochul describes as the largest climate, sustainability, and decarbonization initiative in the state’s history. The program earmarks funds for reducing emissions through home electrification, energy retrofits, and clean heating through, for instance, rebates to homeowners who install electric heat pumps; incentives for purchasing EVs, improving EV charging systems, and expanding the fleet of electric school buses; and expanded thermal and renewable energy in public institutions. The funds will be disbursed through utilities, direct rebate programs, and such agencies as the New York State Energy Research and Development Authority. In addition to the Sustainable Futures Program, the budget also sends $425 million to the state Environmental Protection Fund, with $90 million of that dedicated to sustainable farming practices and farmland protection. Also included are wide-ranging upgrades for New York mass transit networks, among them the Long Island Rail Road, Hudson Valley Rail System, and the New York City Subway system, and zero-emission bus fleet expansion. Hochul stated, “We’re investing in affordability, reliability, and clean energy all at once. This is about making sure New Yorkers have safe, modern energy – and a healthier planet.”

North Carolina: Farmers Protection Act forbids environmental criteria in agricultural lending. North Carolina’s Senate has passed SB 554, the Farmers Protection Act. A University of North Carolina School of Government digest of the bill states that the Act forbids banks and credit unions from “denying or canceling service for agricultural producers based on greenhouse gas emissions or use of fossil-fuel derived fertilizer or powered machinery.” The bill’s sponsors stated that the legislation was necessary to prevent discrimination in lending to farmers, although extensive hearings on the measure provided no evidence of North Carolina farmers affected by such financial practices. SB 554 now heads to the desk of Governor Josh Stein. If signed, the bill will take immediate effect.

Maine legislature considers “cost recovery” climate superfund bills. The Maine legislature is considering two bills that together would create a state climate “superfund.” Under the proposed measures, fossil fuel companies determined to be responsible for emitting at least a billion metric tons of GHGs into the atmosphere since 1995 would be held accountable for Maine’s costs in addressing climate disasters and mitigating the effects of climate change. The state treasurer would be required to calculate the companies’ debt to the state, with these one-time payments dedicated to addressing infrastructure damage from climate disasters and future mitigation efforts. On May 4, Maine’s Department of Environmental Protection Commissioner, Melanie Loyzim, called on the legislature to postpone consideration of the bill to 2026, pending the outcome of ongoing legal challenges to the similar laws of New York and Vermont. “Adopting some version of a climate superfund in Maine now creates an administrative burden for the department to develop a program that may be struck down by judges in the coming year,” she testified before the state’s Environment and Natural Resources Committee. The Maine bills are LD 1870, “An Act to Establish a Climate Superfund Cost Recovery Program to Impose Penalties on Climate Polluters” and LD 1808, “The Maine Climate Superfund Act.” At this writing, the bills are under consideration by the Environment and Natural Resources Committee.

Meanwhile, in California, support in the legislature for a proposed climate superfund law appears to be sagging. Adding to concerns in Sacramento about potential clashes with Washington are fears that the measure, SB 584/AB 1243, the Polluters Pay Climate Superfund Act of 2025, could increase fuel prices and unemployment. On April 29, one of the bill’s authors, Assemblymember Dawn Addis (D-Morro Bay), announced that she would postpone the Senate Judiciary Committee’s vote to “allow more time for meaningful conversations with stakeholders.” The proposal would, among other things, require the California Environmental Protection Agency (CalEPA) to carry out a comprehensive climate cost study to quantify the monetary damages attributable to fossil fuel emissions. These are defined as “all past and future climate harms and damages to the state from January 1, 1990, through December 31, 2045, inclusive,” from which CalEPA will “determine and assess, as provided, a cost recovery demand for each responsible party listed, which represents the responsible party’s proportionate share of the total damage amount.” Monies would be used for “projects and programs to mitigate, adapt, or respond to the damages and costs caused to the state from climate change.” Should the bill become law, it would “take effect immediately as an urgency statute.” Like the proposed Maine superfund law, the California law is being positioned as a cost-recovery and revenue-sharing measure. Addressing public concerns that the superfund law would raise fuel prices across the state, Addis stated, “We know given recent federal actions, the state budget may experience deficits. AB 1243 provides a material way to address these issues.” California is the first major oil-producing state to consider a climate superfund law. A 2024 version of the measure failed to advance. 

In wake of Held, Montana revises MEPA. In mid-December, the Montana Supreme Court ruled in favor of 16 young plaintiffs in Held v. Montana, holding that the state Constitution’s guarantee of a “clean and healthful environment” encompasses a right to a “stable climate system that sustains human lives and liberties.” This was the first time a court of last resort ruled in favor of plaintiffs in a so-called youth climate suit and the first time an appellate court has recognized a constitutional right to a “stable climate” – but Held’s reach is circumscribed, only invalidating legislative limits on environmental reviews under the Montana Environmental Policy Act (MEPA). In the wake of that ruling, both Republican and Democratic legislators in Montana proposed a host of bills that would amend MEPA, either by limiting environmental reviews or aligning MEPA with Held. On May 1, Governor Greg Gianforte signed one of those measures, HB 285, which would set new limits on MEPA’s environmental review process. Another bill, SB 221, which would limit the scope of environmental reviews for fossil fuel projects in the state, is, at this writing, on his desk.

Hawaii passes lodging tax to fund environmental protection efforts. On May 2, Hawaii’s legislature approved SB 1396, a measure that will raise the state lodging tax. With this law, Hawaii becomes the first state in the nation to dedicate tax revenue from lodging to environmental protection and climate change mitigation. Under SB 1396, Hawaii’s current tax on short-term accommodations will increase by .75 percent, to 11 percent. In addition, SB 1396 levies a 1 percent tax on tourists staying on cruise ships, prorated by the number of days a ship is docked. The revenue from the .75 percent new tax and the cruise ship tax is projected to approach $100 million a year and will be applied to such climate change mitigation projects as removing flammable invasive grasses, restoring Waikiki’s eroding beaches, and reinforcing homes against hurricanes. SB 1396 goes into effect January 1, 2026.

Canada: Ontario approves construction of small modular nuclear reactor. On May 8, the Province of Ontario and Ontario Power Generation announced the approval of construction permits for a 300-MW BWRX-300 reactor to be built at the Darlington Nuclear Generating Station in Bowmanville, Ontario, about 70 km east of Toronto. The plant, officials noted, would be the first small modular reactor (SMR) operating in the Western world – China and Russia already have operational SMRs. The reactor will be built alongside an existing nuclear plant operated by Ontario Power Generation and is the first of four SMRs projected for that site. The Canadian Nuclear Safety Commission issued a license for construction of the plant in April this year. The project is anticipated to begin providing power in 2030.

European Commission announces EUDR simplification; draft Delegated Act public consultation period closes: On April 15, 2025, the European Commission released updated guidance, FAQs, and a draft Delegated Act to simplify due diligence requirements under the EUDR, aiming to help companies and authorities demonstrate that products are deforestation-free. These updates, shaped by feedback from member states, partner countries, and industry, are expected to reduce administrative costs for companies by about 30 percent. On May 13, the draft Delegated Act’s public consultation period closed May 13. The draft Delegated Act proposes targeted changes to the list of regulated products and clarifies the regulation’s scope. The Commission is also finalizing a country benchmarking system, to be adopted by June 30, 2025.

European Parliament approves Omnibus I’s amendment to CBAM. On May 22, the European Parliament overwhelmingly approved an amendment to the Carbon Border Adjustment Mechanism (CBAM) which will exempt 90 percent of EU companies from the so-called carbon tax. The vote: 564 for, 20 against, and 12 abstentions. About 182,000 small and medium-sized companies that import modest amounts of products into the EU would be affected by the change. The amendment is part of the Omnibus I package that aims to simplify key reporting requirements of the EU’s Green New Deal – the Corporate Sustainability Reporting Directive (CSRD); the Corporate Sustainability Due Diligence Directive (CSDDD); and the EU Green Taxonomy, as well as the CBAM.

Backing away from Merz’s call to end the CSDDD. On May 26, German government spokesperson Stefan Kornelius walked back comments early this month by German Chancellor Friedrich Merz that called for an end to the CSDDD. Kornelius said that the government does not want to eliminate the disclosure directive, but to “streamline” it. Merz, who was appointed chancellor of Germany on May 6, called for the EU to “cancel” the CSDDD during his first official visit to Brussels on May 12. The coalition agreement that led to Merz’s appointment as chancellor includes eliminating the Supply Chain Act (LkSG), Germany’s human rights and environmental supply chain due diligence law originally put in place in 2021. While the coalition agreement also held that the LkSG would be supplanted by the CSDDD, Merz indicated that Germany would instead walk away from the Directive, revoking its national implementation. On May 19, French President Emmanuel Macron joined in. “Clearly we are very aligned now with Chancellor Merz,” he stated at the Choose France International Business Summit. “CSDDD and some other regulations have to not just be postponed for one year, but to be put out of the table.” Kornelius reportedly added that Germany’s goal is to “de-bureaucratize” the CSDDD in line with proposals in Omnibus I. Germany and France are Europe’s two largest economies.

ECB warns against Omnibus I. On May 12, the European Central Bank released an opinion on Omnibus I in which it warns that the significant cuts the European Parliament is considering to sustainability reporting requirements could “significantly limit stakeholders’ access to important information” and, because some significant emitters would no longer be required to report, could create “unwanted outcomes.” In the opinion, the ECB proposes continuing to require medium-sized companies (those with 500-1,000 employees) to report, while modifying their reporting requirements to ensure “simplified sustainability reporting standards that are proportionate and relevant to the capacities and the characteristics of such undertakings and to the scale and complexity of their activities.” It also encourages the European Commission to “consider adopting sector-specific guidelines in order to foster a common approach.”

India calls for comments on draft Climate Finance Taxonomy. India’s Department of Economic Affairs is inviting expert comment on its draft Climate Finance Taxonomy. The taxonomy, released on May 8, aims to help achieve India’s climate goal of net zero by 2070 by encouraging transition financing for climate-friendly technologies and activities. This first draft focuses on manufacturing sectors whose emissions are notoriously difficult to abate – cement, iron, steel, aluminum – and on fostering climate adaptation and resilience building in the transportation, agriculture, power, and construction sectors. It also includes measures to address greenwashing and Do No Significant Harm (DNSH) requirements. The Finance Ministry stated that the taxonomy will “facilitate greater resource flow to climate-friendly technologies and activities, enabling the country to achieve the vision of being Net Zero by 2070 while also ensuring long-term access to reliable and affordable energy.” The taxonomy is part of the government’s overarching vision of Viksit Bharat 2047 – aiming to transform India into a developed nation by its centenary in 2047. Comments on the Climate Finance Taxonomy are due to the Department of Economic Affairs by June 25, 2025.

Environmental: Litigation

TRO issued in litigation over EPA reorganization. “To protect the power of the legislative branch” to steer major changes in federal agencies, on May 9 the US District Court for the Northern District of California issued a temporary restraining order (TRO) that paused, for 14 days, Trump Administration efforts to restructure the EPA and other federal agencies. In the lengthy TRO, the court stated, “The President has the authority to seek changes to executive branch agencies, but he must do so in lawful ways and, in the case of large-scale reorganizations, with the cooperation of the legislative branch.” The TRO in American Federation of Government Employees, AFL-CIO, et al. v. Donald Trump, et al. finds that the plaintiffs – federal worker unions, nonprofits, and local governments – have standing to bring the case and that their suit is “likely to succeed on the merits of at least some of their claims.” Immediately after the TRO was issued, the Department of Justice filed an appeal in the US Court of Appeals for the Ninth Circuit.

Arguments heard in green banks funding freeze appeal. On May 19, the US Court of Appeals for the District of Columbia Circuit heard arguments in litigation over billions of dollars in frozen funds granted through the Greenhouse Gas Reduction Fund (GGRF) – one of several lawsuits arising from the EPA’s attempt to claw back grants awarded to nonprofits, municipalities, and green banks across the country. In this case, a coalition of three nonprofit green banks – Climate United Fund, the Coalition for Green Capital, and Power Forward Communities – is suing the EPA, EPA Administrator Lee Zeldin, and the bank holding the frozen funds, charging that they illegally denied the groups access to funds awarded them last year. In April, the US District Court for the District of Columbia noted that the EPA had never provided any proof for its repeated claims that the green banks had engaged in fraud and issued a preliminary injunction barring the EPA from “unlawfully suspending or terminating” the grants and ordering the funds to be disbursed to the three green banks. That order was stayed pending the appeals court’s decision. The panel of judges could order that the funds be released to the plaintiffs, or it could overturn the DC Circuit’s order, clearing the way for EPA to claw back the funds.

Next, in another of the frozen funds lawsuits, the US District Court for the District of South Carolina, Charleston Division, has ordered the EPA to reinstate $176 million in 32 grants, totaling $176 million, that it had awarded to six municipalities and 13 nonprofits across the country for an array of environmental and climate projects. The lawsuit, brought in February, concerned a total of 38 grants awarded under the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and other federal programs which the EPA is seeking to claw back. In their original Complaint, the plaintiffs called the Trump Administration’s broad freeze of the grants “unlawful and arbitrary” and stated that the freeze “violates multiple statutory provisions, as well as fundamental constitutional and administrative safeguards” and “inflicts significant harm on Plaintiffs, preventing them from executing critical projects, carrying out their missions, planning for the future, paying their employees, contractors, or sub-awardees, and serving the communities where they are implementing these congressional priorities.” A May 16 filing by Administration attorneys conceded the plaintiffs’ claims on 32 of the 38 grants; the court’s May 20 ruling affects those 32 grants. Reportedly, the Administration intends to appeal the ruling. See some of our earlier coverage of the frozen funds litigation here.

Attorneys General of 17 states and DC sue Administration over wind energy Memorandum. On May 4, the Attorneys General of 17 states and the District of Columbia filed suit in the US District Court for the District of Massachusetts to, their Complaint states, “challenge President Trump’s unlawful Presidential Memorandum halting federal approvals of wind-energy development and to enjoin federal agencies’ implementation of that Memorandum.” That Memorandum, Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects, was issued on January 20. The Attorneys Generals’ complaint states that the Memorandum “has stopped most wind-energy development in its tracks,” “harms the States’ efforts to secure reliable, diversified, and affordable sources of energy to meet the ever-increasing demand for electricity,” and jeopardizes “their billions of dollars in investments in supply chains, workforce development, and wind-industry-related infrastructure.” The Complaint also characterizes the Administration’s actions as “arbitrary and capricious” and contrary to “numerous federal statutes including the Clean Air Act, the Endangered Species Act, and the Outer Continental Shelf Lands Act.” The plaintiffs are calling on the court to declare the President’s directive illegal and to prevent the Administration from delaying or preventing development of wind energy projects. Wind power is the nation’s largest source of renewable energy, generating about 10 percent of the electricity the US uses.

State AGs ask court to declare Energy Emergency EO illegal. On May 9, a coalition of 15 US states filed suit in the US District Court for the Western District of Washington challenging President Trump’s January 20 Executive Order Declaring a National Energy Emergency. There is no energy emergency in the US, the complaint states: “The United States produces so much oil and natural gas, in fact, that companies have said they will not increase output in response to the President's declaration of a national energy emergency because it is not economical to do so." The EO, the complaint continues, violates the National Emergencies Act of 1976, legislation created to ensure that presidents deploy their emergency powers not for “frivolous or partisan matters” but "only when actual emergencies exist." The complaint charges that, “prodded onto the shakiest of limbs by the President's unsupported and unlawful Executive Order,” federal agencies like the US Army Corps of Engineers are striving to “broadly employ these emergency procedures in non-emergency situations,” for instance shortening or bypassing reviews of energy projects under the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act. “That unlawful process is facilitated by other agencies… which have themselves overextended their own emergency procedures to short-change or completely skip critical environmental review under the Executive Order’s directive.” These inherent shortcuts, the Complaint continues, “fundamentally undermine the rights of States” and by “unlawfully bypassing proper permitting procedures for hundreds of projects currently proposed in and around the Nation—and presumably many more in the future—will result in significant and irreparable harm to state natural and historic resources and the people and biota that rely on those resources for drinking, farming, recreating, and habitat.” Defendants in the case are the President; Lieutenant General William H. Graham, Jr., Commanding General of the US Army Corps of Engineers, and Travis Voyles, Vice Chair of the Advisory Council on Historic Preservation – both those agencies, the lawsuit charges, have taken numerous illegal actions in seeking to implement the EO. The Attorneys General are calling on the court to declare the energy emergency EO unlawful, and to bar the agencies from pursuing emergency permitting for non-emergency projects. On May 10, the state of Rhode Island joined the suit.

Montana youth plaintiffs sue President over energy EOs. On May 29, a group of young plaintiffs, among them litigants who prevailed in the landmark Held v. Montana case, have filed suit against President Trump, charging that three of his energy-related Executive Orders (EOs) will accelerate climate change, causing “irreversible harm” to the plaintiffs and violating their constitutional rights to life and liberty. “President Trump’s EOs falsely claim an energy emergency, while the true emergency is that fossil fuel pollution is destroying the foundation of Plaintiffs’ lives,” the initial Complaint states. The plaintiffs are asking the US District Court for the District of Montana to invalidate the EOs and order the President, as well as 11 federal agencies also named as defendants, not to enforce or implement them.

DOJ sues 4 US states over climate laws, climate lawsuits. The Department of Justice has filed lawsuits against four US states over state-level climate legislation and prospective climate litigation. The actions follow President Trump’s April Executive Order directing Attorney General Pam Bondi to halt enforcement of state- and local-level laws, regulations, and causes of action “purporting to address ‘climate change’ or involving ‘environmental, social, and governance’ initiatives, ‘environmental justice,’ carbon or ‘greenhouse gas’ emissions, and funds to collect carbon penalties or carbon taxes.” On April 30, DOJ sued the states of Hawaii and Michigan over their plans to file suit against major oil and gas companies seeking damages for harms caused by climate change. Then on May 1, the Department sued the states of New York and Vermont over their Climate Superfund laws. Here is more information on those cases.

The Administration’s lawsuits against New York and Vermont focus on those states’ Climate Superfund Laws, which require major oil and gas companies to pay into state-based funds based on their historic GHG emissions; those funds will support projects mitigating the impacts of climate change in each state. Attorney General Bondi called the laws “burdensome and ideologically motivated” and stated, “The Department of Justice is working to ‘Unleash American Energy’ by stopping these illegitimate impediments to the production of affordable, reliable energy that Americans deserve.” DOJ states that both Superfund laws are preempted by federal laws, like the Clean Air Act, and that because they “impermissibly regulate out-of-state greenhouse gas emissions,” they violate the Constitution. The New York and Vermont superfund laws are each already the objects of litigation filed earlier this year by business organizations and Attorneys General of Republican-led states, respectively. On May 1, 24 Republican-led states joined the Vermont litigation.

The complaints against Hawaii and Michigan each charge that the states’ intended suits violate “the intent of the Clean Air Act that enables the EPA authority to set nationwide standards for greenhouse gases.” The complaints against both states contain identical language charging that “the goal of the lawsuit is clear—to extract large sums of money from fossil fuel companies.” Of note: when the DOJ brought these suits, neither state had actually filed the litigation in question. On May 1, Michigan Attorney General Dana Nessel called the lawsuit against Michigan “at best frivolous and arguably sanctionable.” She affirmed that while the Michigan suit has not yet been filed, the state intends to proceed. The DOJ, she stated, “will not succeed in any attempt to preemptively bar our access to make our claims in the courts.” Also on May 1, Hawaii Attorney General Anne E. Lopez filed the state’s suit against seven groups of affiliated fossil fuel companies and the American Petroleum Institute. 

On May 11, the Colorado Supreme Court declined to dismiss a suit brought by the county commissioners of Boulder County and the City of Boulder charging that Suncor Energy and Exxon Mobil “intentionally misled the public” about the environmental impact of their products. The case is not preempted by federal law and may proceed in state court, the panel concluded. In January, the US Supreme Court declined to hear a challenge to a similar ruling from the Hawaii Supreme Court.

And on May 16, the Court of Common Pleas of Bucks County, Pennsylvania, dismissed, with prejudice, the county’s climate accountability case against major energy companies, concluding that the county lacks standing to bring its claims in county court and that its claims fall “solely within the province of federal law.”

Wrongful death climate lawsuit in Washington state court. A lawsuit filed on May 29 in Washington state’s King County Superior Court charges that major oil companies are responsible for the death of a woman on the hottest day in Seattle’s history. This is thought to be the first wrongful death case brought against fossil fuel companies arising from a climate disaster. The case was brought by Misti Leon, daughter of Julia Leon, age 65, who was found unresponsive in her car on June 28, 2021 and died later that day despite medical intervention. The Complaint states, “Defendants have known for all of Julie's life that their affirmative misrepresentations and omissions would claim lives. Julie is a victim of Defendants' conduct." It continues, “Plaintiffs do not seek to enjoin, restrict, or regulate any fossil fuel activities,” nor any of the defendants’ business activities, but, in addition to a monetary award to be determined at trial, are calling on the court to require the defendants to carry out “a public education campaign to rectify Defendants’ decades of misinformation.”

Supply chain integrity

Commissioner Uyeda: Conflict minerals rule is “costly and ineffective.” In related news, in remarks on May 19 at the annual SEC Speaks conference, SEC Commissioner Mark Uyeda criticized the conflict minerals rule, calling it “costly and ineffective” and stating that it “has created significant regulatory compliance costs for U.S. public companies without clear corresponding benefits.” The rule, originally issued in 2012, requires various disclosures concerning “conflict minerals” – tantalum, tin, tungsten, and gold originating in the DRC or an adjoining country. Uyeda stated that the rules “have the unfortunate effect of ceding U.S. influence in that portion of the world to geo-strategic powers that may have less respect for human rights and dignity. Importantly, this SEC rule hurts American companies from competing in a global marketplace.” He continued, “It is far past time to re-evaluate such obligations with a view to determining whether such disclosure requirements should remain in effect… the SEC should cease using financial disclosure regulations to bring about human rights changes in Africa, to the extent permitted by law.”

Congress considers bills that would combat forced labor in China. Both the Senate and House are considering proposed legislation targeting forced labor and child labor in China. The measures are:

• S 580, the Combating CCP Labor Abuses Act, a bipartisan bill that would direct the Department of Commerce to offer “training and guidance relating to human rights abuses, including such abuses perpetrated against the Uyghur population by the Government of the People's Republic of China,” to US businesses
  
  
• HR 2310, the China’s Odious and Brutally Atrocious Labor Trafficking Supply Chain Act, or COBALT Supply Chain Act, which would create a rebuttable presumption under Section 307 of the US Tariff Act that products containing cobalt refined in China are made using child or forced labor and
  
  
• S 1358, the Transaction and Sourcing Knowledge Act, or TASK Act, which would require the SEC to mandate disclosure by publicly traded companies of their due diligence and sourcing activities regarding products manufactured with forced labor from Xinjiang, as well as any activities involving companies on the Bureau of Industry and Security’s Entity List or designated by the Office of Foreign Assets Control as Chinese Military-Industrial Complex Companies.

ESG in financial services

US regulators call for downgrading of Basel Committee’s climate task force. US financial regulators, led by the Federal Reserve, are calling for the downgrading of a task force created to study the effects of climate change on the global financial system. The Basel Committee on Banking Supervision, itself established by the Group of Ten’s central bank governors in 1973, created its Task Force on Climate-Related Financial Risk in 2020 to study the impact of climate change on the financial system, with the higher goal of maintaining the stability and security of the global financial system. Reportedly, the US regulators will push for the Basel Committee to downgrade the task force to a working group, which would lessen its influence.

Meanwhile, on May 7, the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) released its first set of short-term climate scenarios for financial systems and financial services companies. The scenarios’ five-year time horizon analyzes the interplay of financial risks and macroeconomic variables – such as extreme weather events, sectoral dynamics, government policies, and supply chain impacts – to help the financial sector better prepare for potential economic and financial consequences of climate change in the near term. Founded in 2017, the NGFS describes itself as “a coalition of the willing” that works to strengthen “the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize mainstream finance in the context of environmentally sustainable development. “

New York City pension systems require asset managers to comply with city’s climate standards. The public markets asset managers for New York City’s Board of Education Retirement System (BERS), Teachers’ Retirement System (TRS), and New York City Employees’ Retirement System (NYCERS) have been instructed to submit a written plan to the New York City Comptroller’s Bureau of Asset Management by June 30 setting out their net zero action plans. Asset managers will need to ensure that all portfolio companies meet certain standards, among them measuring and reporting their Scope 1 and 2 and material Scope 3 emissions; setting clear goals to reach net zero using quantified climate measurement standards; and adopting a detailed transition plan to achieve net zero. Asset managers themselves will be expected to adopt climate stewardship practices, such as incorporating material climate change-related risks and opportunities in their investment decision making. Comptroller Brad Lander said that asset managers who fail to comply may be dropped. BERS, TRS, and NYCERS collectively hold more than $280 billion in assets.

ESMA publishes technical standards for providers of ESG ratings. The European Securities and Markets Authority (ESMA) has issued a consultation paper proposing new draft standards for providers of ESG ratings. The paper sets out technical standards that would, it states, “facilitate the smooth implementation” of the EU’s Regulation on the Transparency and Integrity of Environmental, Social and Governance (ESG) Rating Activities. Among other factors, the technical standards aim to ensure that companies that provide ESG ratings avoid conflicts of interest by siloing ratings activities from other business activities, and that ESG ratings are reported in a more transparent manner and are more consistent across providers.

ESG in the marketplace

Two scientific societies will produce replacement for next National Climate Assessment. The American Geophysical Union (AGU) and the American Meteorological Society (AMS) have announced a joint effort to produce a special collection on climate change in the United States, following the dismissal of the scientists working on the next National Climate Assessment by the Trump Administration. This new initiative is intended to sustain the momentum of the National Climate Assessment, though it is not a direct replacement, and will involve contributions from scientists that would have participated in the 2028 Assessment, with findings published across 29 peer-reviewed journals. The future of the congressionally mandated federal climate report remains uncertain, but the AGU and AMS collaboration aims to ensure continued scientific progress and support for climate-related decision-making.

EU and UK will integrate their emissions trading systems. Aiming to align their efforts to support net-zero goals, the European Commission and the UK government announced that they have arrived at a “Common Understanding” that they will work together to integrate their emissions trading systems. This integration would, among other things, allow products originating in either entity to benefit from mutual exemptions set out in their Carbon Border Adjustment Mechanism (CBAM) policies. The EU’s CBAM goes into effect on January 1, 2026, followed by the UK’s on January 1, 2027. The Common Understanding was announced on May 19 during the EU-UK Summit. 

Report: Climate-driven foreclosures will increasingly place lenders in peril. First Street’s 13th National Risk Assessment, which it describes as the "first national-scale analysis of the relationship between physical climate risk and mortgage defaults," concludes that "climate-driven foreclosures" are increasingly placing lenders in financial jeopardy. The assessment reviewed what it calls the “escalating financial toll” of foreclosures in the wake of extreme weather events, looking at both direct results– foreclosures of uninsured homes after, say, a flood or wildfire – and indirect ones – long-term downward pressures on home values that erode equity. First Street concludes, “The combined effects of direct disaster impacts and indirect economic pressures could result in up to $1.2 billion in credit losses from severe weather events by 2025, rising sharply to $5.4 billion by 2035.” Read the report here.

ESG calendar

Key global reporting deadlines

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Coming events

• Taking place on June 16, DLA Piper’s webinar, Sustainability in an uncertain world, examines how businesses can respond to regulatory changes and monitor their impact on international commitments in today’s uncertain global environment. Register here.
• The International Civil Aviation Organization’s Aviation Climate Week will take place June 2–4 in Montréal.
• The 2025 UN Ocean Conference will be held June 9–13, 2025 in Nice.
• The UN’s 4th International Conference on Financing for Development  takes place June 30 – July 3 in Seville.
• The 13th International Conference on Sustainable Development will take place September 10–11, 2025 in Rome.
• Climate Week NYC will take place September 21–28, 2025 in New York City.
• The 2025 United Nations Climate Change Conference (COP 30) will be held November 10–21, 2025 in Belém.