Other Notable Developments

Human Rights and Sustainable Finance: The Office of the United Nations High Commissioner for Human Rights published a white paper on Human Rights and Minimum Safeguard Clauses in Sustainable Finance Taxonomies: A Comparative Analysis, finding that although there is an increasing interest in ESG investments, a benchmark is needed to inform what investments are genuinely sustainable and promote human rights. The white paper argues that a harmonized approach regarding the content of minimum safeguard clauses could guide investment decisions in a human rights-favorable direction.

U.S.: Eighth Circuit Orders SEC to Rescind or Defend its Climate Disclosure Rules

On September 12, 2025, the U.S. Court of Appeals for the Eighth Circuit issued an order holding in abeyance petitions for review of the U.S. Securities and Exchange Commission’s (the “SEC”) climate disclosure rules (the “Climate Disclosure Rules”). The court stated that the order will remain in place until the SEC decides to rescind or modify the Climate Disclosure Rules through ordinary rulemaking, or renews its defense of the rules in the litigation.

Following their adoption in March 2024, the Climate Disclosure Rules faced legal challenges from several states and private entities, with resulting petitions consolidated in the Eighth Circuit under State of Iowa, et al. v. SEC, No. 24-1522 (8th Cir. 2024). In March 2025, the SEC under the second Trump administration announced that it would stop defending the Biden-era rules. In a status report filed in July, the SEC urged the court to render a decision in the litigation, stating that the SEC did “not intend to review or reconsider the Rules at this time.” The court’s current order comes in response to the SEC’s July status report.

Link:
Order

U.S.: District Court Denies Second Attempt to Enjoin California’s Climate Disclosure Laws

On September 11, 2025, Judge Otis D. Wright II of the U.S. District Court for the Central District of California rejected a second attempt by a coalition of business groups to pause California’s Climate Corporate Data Accountability Act (“SB 253”) and the Climate-Related Financial Risk Act (“SB 261”). The coalition’s most recent motion sought to enjoin the enforcement of the climate disclosure laws during the pendency of their appeal to the U.S. Court of Appeals for the Ninth Circuit challenging the District Court’s initial order.

In August, Judge Wright denied a request by the U.S. Chamber of Commerce and other business groups for a preliminary injunction of the climate disclosure laws on First Amendment grounds, finding that the plaintiffs did not show that their First Amendment challenge will likely succeed on the merits against either SB 253 or SB 261. (For more on the District Court’s order denying the plaintiff’s first motion for a preliminary injunction, see our ESG Update.)

Following that order, the business groups appealed the District Court’s order to the Ninth Circuit and moved again for a preliminary injunction—this time seeking to enjoin the enforcement of the climate disclosure laws while their appeal to the Ninth Circuit is pending. In his most recent order, Judge Wright said that the plaintiffs failed to “show any material changes [with respect to the plaintiffs’ likelihood of success on the merits] warranting the Court’s reconsideration” and denied their motion for a preliminary injunction. Judge Wright paused proceedings in the District Court case until the resolution of the appeal. A hearing date for the appeal before the Ninth Circuit has not yet been set.

As a result of the order, implementation and enforcement of SB 253 and SB 261 will proceed until further notice. Reporting companies should continue preparing their disclosures.

For more on the reporting requirements under California’s climate disclosure laws, please see our Debevoise Debriefs on CARB’s second public workshop and CARB’s draft checklist. For additional background on California’s climate disclosure laws, see our Debevoise Update and ESG Updates here and here.

Link:
Order

U.S.: Federal Judge Blocks Texas Law Targeting ESG-Based Proxy Advice

On August 29, 2025, Judge Alan Albright of the U.S. District Court for the Western District of Texas granted a preliminary injunction preventing the implementation of a state law aimed at curbing proxy advisory firms’ use of ESG and DEI considerations in their proxy voting recommendations. Texas Senate Bill 2337 (“SB 2337”), which took effect on September 1, requires proxy advisory firms that serve companies headquartered or incorporated in, or re-domesticating to, Texas to disclose when their advice incorporated ESG or diversity-related factors, and to provide the financial justifications for doing so.

Judge Albright found that the plaintiffs met the standard for granting a preliminary injunction and enjoined SB 2337 only with respect to the two proxy advisory plaintiffs—Institutional Shareholder Services, Inc. (“ISS”) and Glass, Lewis & Co., LLC (“Glass Lewis”). The plaintiffs argued, among other things, that SB 2337 violates the First Amendment by engaging in viewpoint discrimination, is unconstitutionally vague, and is preempted by the federal Employee Retirement Income Security Act.

A trial date has been set for February 2, 2026. In recent weeks, Texas Attorney General Ken Paxton announced an investigation into ISS and Glass Lewis for “potentially misleading institutional investors and public companies by issuing voting recommendations that advance radical political agendas rather than sound financial principles.”

Links:

Docket

Docket

EU: Danish Regulator Issues Report Assessing EU Taxonomy Disclosures

In September 2025, Finanstilsynet (the “FSA”), the Danish financial supervisory authority, issued a report assessing EU Taxonomy reporting by 20 financial institutions operating in Denmark. The report concluded that the financial institutions’ qualitative EU Taxonomy disclosures were “characterized by significant shortcomings.” By contrast, the financial institutions’ quantitative reporting was considered generally satisfactory.

The FSA’s primary concern was that the qualitative disclosures were too general in nature. In particular, it found that such disclosures often described companies’ general sustainability efforts rather than their specific efforts in relation to the EU Taxonomy. For instance, institutions frequently explained how sustainability was integrated into their strategies or products without clarifying how these initiatives were related to the EU Taxonomy. The FSA also observed that, in several cases, it was difficult to locate qualitative disclosures within certain institutions’ reports. In this regard, the FSA specifically called out a lack of subheadings, or the use of subheadings that did not reflect the topics of the EU Taxonomy, that limited the “readability” of the disclosures.

The FSA stated that its findings would continue to be relevant following the introduction of the European Commission’s first Simplification Omnibus package (the “Omnibus Package”), given that the qualitative EU Taxonomy reporting requirements are expected to remain the same. For more on the Omnibus Package, see our Debevoise In Depth here.

Link:
Finanstilsynet Report [Danish]

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