Other Notable Developments

Net Zero Standard: The Science Based Targets initiative (“SBTi”) published its net-zero standard for financial institutions, which sets out a framework for financial institutions to set sector-specific targets consistent with reaching net zero by 2050.

Sustainable Investment: The United Nations Principles for Responsible Investment (“UN PRI”) released its Sustainability Value Creation Framework, which aims to integrate sustainability into core investment strategies.

Global: ICJ Issues Advisory Opinion on the Obligations of States Regarding Climate Change

On July 23, 2025, the International Court of Justice (the “ICJ”) issued its Advisory Opinion on the Obligations of States in Respect of Climate Change. The advisory opinion came in response to United Nations General Assembly Resolution 77/276, from March 2023, which requested an opinion from the ICJ on two questions:

(a) “[w]hat are the obligations of States under international law to ensure the protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases for States and for present and future generations?”; and

(b) “[w]hat are the legal consequences under these obligations for States where they, by their acts and omissions, have caused significant harm to the climate system and other parts of the environment […]?” 

In the advisory opinion, the ICJ determined that States have wide-ranging obligations to protect the environment, including under the United Nations Framework Convention on Climate Change, Paris Agreement, Convention on Biodiversity and United Nations Convention on the Law of the Sea. Additionally, the ICJ held that States are obligated to prevent climate change from interfering with the enjoyment of human rights and have international customary law obligations to prevent significant harm to the environment. The ICJ determined that these are due diligence obligations to be performed at a “stringent” standard.

Finally, the ICJ held that a breach of States’ obligations under question (a) may give rise to the “entire panoply of legal consequences provided for under the law of State responsibility.” These consequences may include: (i) cessation and non-repetition; (ii) restitution, involving the “re-establishment of the situation that existed before the wrongful act was committed,” including reconstruction of damaged infrastructure and restoration of ecosystems and biodiversity; (iii) where restitution proves impossible, and a sufficient causal nexus can be demonstrated, compensation; and (iv) satisfaction in the form of expressions of regret, formal apologies, public acknowledgments, or the provision of educational programs on climate change.

Links:
Resolution 77/276
Advisory Opinion
Official Summary

On July 23, 2025, the U.S. Securities and Exchange Commission (the “SEC”) filed a status report in State of Iowa, et al. v. SEC, No. 24-1522 (8th Cir. 2024), a lawsuit challenging the SEC’s Climate Disclosure Rules (the “Rules”). Adopted by the SEC under the Biden Administration, the Rules would require certain large U.S. companies to disclose publicly their greenhouse gas emissions and other climate-related information. Together with other states and industry groups, Iowa challenged the Rules, arguing that the SEC exceeded its authority.

In April 2025, the U.S. Court of Appeals for the Eighth Circuit held the litigation in abeyance after the SEC submitted a letter to the court formally withdrawing its defense (more on this here). The Court further requested the SEC to provide a status report on whether it intended to withdraw or modify the Rules. In response, the SEC issued a status report indicating that it did not intend to revisit the Rules and that the Eighth Circuit should render its ruling, given that the case already has been fully briefed. The SEC added that the ruling would “help determine the scope and need for further rulemaking.”

Commissioner Caroline A. Crenshaw criticized the SEC’s status report in a separate statement, noting, among other issues, that the SEC did not respond to the Court’s question as to whether the SEC will adhere to the Rules if the petitions for review are denied.

Links:

SEC Status Report

On July 29, 2025, the U.S. Environmental Protection Agency (the “EPA”) published a proposed rule that would:

(i) rescind the 2009 Greenhouse Gas Endangerment Finding under section 202(a) of the Clean Air Act (the “CAA”) holding that certain greenhouse gases (“GHG”) threaten public health, which was introduced during the Obama Administration and provided the statutory authority for the EPA to regulate GHG emissions; and

(ii) as a consequence of (i), repeal all subsequent GHG regulations that relate to motor vehicles and engines.

In the proposed rule, the EPA identified several “legal rationales” for the proposed recission, including that: (i) the EPA lacks the authority under the CAA to prescribe standards in response to global climate change concerns, rather than local or regional exposures, and instead should target air pollution that threatens public health or welfare through local or regional exposure; (ii) scientific and legal developments since 2009 undercut many of the founding assumptions of the Endangerment Finding; and (iii) notwithstanding the legal grounds for rescinding the Endangerment Finding, there is currently no requisite technology that addresses the identified dangers posed by GHG emissions.    

Links:

Reconsideration of 2009 Endangerment Finding and Greenhouse Gas Vehicle Standards

Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act