ESG Weekly Update – March 27, 2024

27 March 2024

Other Notable Developments

Clean Vehicles Rule: On March 20, 2024, the U.S. Environmental Protection Agency released the national pollution standards setting out the final rule applicable to cars, light-duty trucks, and medium-duty vehicles manufactured from 2027 to 2032 and onwards. The rule aims to encourage the transition to cleaner vehicles by imposing stricter emissions standards.

U.S.: SEC Climate Disclosure Rule Challenges Consolidated and Stay Lifted

Since the Securities and Exchange Commission (the “SEC”) announced its climate disclosure rules (the “Rule”) on March 6, 2024, litigants filed nine legal challenges. These included suits in the Second, Fifth, Sixth, Eighth, Eleventh, and DC Circuits, all of which the SEC requested on March 19 be consolidated. At the request of petitioners Liberty Energy and Nomad Proppant Services, the Fifth Circuit stayed the Rule’s effectiveness.

On March 21, the U.S. Judicial Panel on Multidistrict Litigation granted this request and consolidated the suits in the U.S. Court of Appeals for the Eighth Circuit, following a random selection from among the circuits in which cases had been filed. Republican presidents previously nominated 16 of the Eighth Circuit’s 17 judges.

As part of this consolidation, before transferring its cases to the Eighth Circuit, the Fifth Circuit lifted its earlier stay on the Rule’s application. The Rule is therefore currently in effect pending further action in the Eighth Circuit.

Court Order
Debevoise In Depth – SEC Issues Long-Awaited Climate-Related Disclosure Rule
Debevoise In Depth – An In-Depth Analysis of the SEC’s Climate-Related Disclosure Rules
Debevoise In Depth – Potential Legal Challenges to the SEC’s Climate Disclosure Rule

EU: Council Postpones Vote on EU Nature Restoration Law

On March 22, 2024, Member States of the European Union (“EU”) delayed voting, for the second time, on the EU Nature Restoration Law. If passed, the law would require the EU to restore 20% of land and sea areas by 2030. To reach this target, Member States would be required to restore “at least 30% of habitats covered by the new law (from forests, grasslands and wetlands to rivers, lakes and coral beds) from a poor to a good condition by 2030, increasing to 60% by 2040, and 90% by 2050,” according to a press release.

The law was approved by the EU Parliament on February 27, making the Council’s vote a formality. However, recent protests staged by farmers across Europe have put pressure on governments to relax environmental legislation.

EU Parliament Press Release
EU Legislative Observatory

UK: Climate Activists in England and Wales Are Restricted from Relying on Climate Change to Prevent Prosecution for Criminal Damage

On March 18, 2024, the Court of Appeal for England and Wales found that the “consent” defense under Section 5(2)(a) of the Criminal Damage Act 1971 is of limited assistance to climate activists prosecuted for criminal damage.

Section 5(2)(a) provides, in relevant part, that persons charged with criminal damage of property shall be treated as having a lawful excuse if they believed that the person entitled to consent to the damage would have consented if they had known of the damage and its circumstances. In several recent cases, climate activists successfully raised the defense of lawful excuse, arguing that they honestly believed the property owner would have consented to the damage if they had known about the full circumstances of climate change.

As part of the UK government’s broader strategy of deterring disruptive protests, the Attorney General applied to the Court of Appeal to clarify the limits of Section 5(2)(a). In particular, the application was prompted by the acquittal of an activist group known as Burning Pink, which was accused of criminal damage after throwing pink paint and attaching a letter to the premises of Greenpeace, Amnesty International, the Conservative Party, and other organizations.

The Court of Appeal reasoned that, in the underlying acquittal, the circumstances of the damage included the act of protesting against climate change but not the facts or effects of climate change. The court therefore considered that, as a matter of law, the “circumstances” referred to at Section 5(2)(a) do not include “the merits, urgency or importance of the matter about which the defendant is protesting, nor the perceived need to draw attention to a cause or situation.” In future climate change protest prosecutions, the “circumstances of the damage” will be limited to the fact that the damage was caused as part of a protest.

Court of Appeal Judgment

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