Other Notable Developments

EPA Finalizes New Air Pollution Rules: The Environmental Protection Agency (the “EPA”) has revised the rule for New Source Performance Standards for Stationery Gas Turbines and Stationary Combustion Turbines. Under the new rule, the EPA will no longer consider the economic value of health benefits associated with the air pollution limits it sets.

Texas Attorney General Declares DEI Unconstitutional: Texas Attorney General Ken Paxton issued a legal opinion arguing that race- and sex-based public sector preferences are unconstitutional, and “a large body of DEI practices in the private sector triggers liability under Title VII, the Texas Commission on Human Rights Act, and Section 1981 in addition to state and federal securities law.”

Sierra Club Publishes Report on U.S. Public Pensions: The report evaluates how major U.S. pension schemes incorporate climate change solutions in their investment strategies. The report recommends that investing strategies focus on decarbonization, contain clearly articulated climate targets, avoid greenwashing, and support the transition to low-carbon industries.

U.S.: Trump Administration Withdraws United States from Global Climate Pact and Dozens of International Organizations

On January 7, 2026, President Donald J. Trump announced that the United States will formally exit the United Nations Framework Convention on Climate Change (the “UNFCCC”). The UNFCCC is the foundational treaty, established in 1992, for international climate cooperation that formed the basis for the 2016 Paris Agreement, from which the United States has withdrawn. The withdrawal is part of a sweeping move to sever ties with 65 international organizations and treaties that the Trump administration claims conflict with U.S. sovereignty, economic strength, and policy interests. The United States also withdrew from UN-affiliated entities, such as UN Women, UN-Water, and the UN Democracy Fund, as well as other global education, human rights, and cultural organizations.

Despite the federal shift, several U.S. states have vowed to continue aligning with the goals of the UNFCCC and the Paris Agreement.

EU: European Commission Advances Stricter Controls on Plastic Imports in 2026

On December 23, 2025, the European Commission announced a set of measures intended to optimize plastic recycling in the EU and pave the way for the introduction of a Circular Economy Act by the end of 2026.

These measures include a draft implementing regulation to set rules for when plastic waste ceases to be considered waste under the Waste Framework Directive. Waste is subject to stricter controls, and the draft implementing regulation is intended to simplify administrative procedures for recyclers so that recycled plastics can be reused in new products. A public consultation on the new rules was open until January 26, 2026.

The Commission also presented for a vote by EU Member States a draft implementing decision under the Single-Use Plastics Directive that would set rules for calculating, verifying, and reporting recycled content in single-use plastic beverage bottles. The rules would also allow chemical recycling of plastics where physical recycling is not feasible or where higher quality standards are required, for instance for food packaging.

In addition to these proposed implementing acts, the European Commission announced plans to relaunch and strengthen the Circular Plastic Alliance in Q1 2026. The Circular Plastic Alliance is a public-private initiative, first launched in December 2018, that promotes the goal of increasing the use of recycled plastics in products.

The Commission also announced that it was creating separate customs codes for virgin and recycled plastics, which will allow for better monitoring of virgin plastics imports and facilitate the enforcement of EU rules relating to these imports.

Lastly, the Commission announced the launch of a public consultation and call for evidence to evaluate the Single-Use Plastics Directive. The consultation is open until March 17, 2026.

The Circular Economy Act would establish a single market for recycled materials, which is intended to improve the demand and supply of recycled materials in the EU. The Act is intended to be adopted by the end of the year.

Links:
Commission Press Release
Draft Implementing Regulation on EU-wide End-of-Waste Criteria for Plastic Waste
Draft Implementing Decision under the Single-Use Plastics Directive
Circular Plastics Alliance

EU: European Securities and Markets Authority Warns Market about Greenwashing

On January 14, 2026, the European Securities and Markets Authority released a thematic note outlining its expectations of market participants as regards sustainability-related claims made to investors, with the objective of mitigating greenwashing risks.

The note sets out four key principles that market participants should follow to ensure that any disclosures made to investors are clear, fair, and not misleading. Specifically, market participants should ensure their disclosures are:

• Accurate: sustainability claims should accurately reflect the sustainability profile of entities or products, and cherry-picking of information should be avoided.

• Accessible: sustainability claims should be based on easily accessible information and must strike the right balance between providing an appropriate amount of detail and avoiding being overly simplistic.

• Substantiated: sustainability claims should be substantiated by reference to clear and credible reasoning and based on fair, proportionate, and meaningful methodologies (including comparisons, thresholds and underlying assumptions).

• Up to date: sustainability claims should be based on up-to-date information, and any material changes should be disclosed in a timely manner. 

The note also addresses two ESG strategies that are frequently referenced by market participants: ESG integration and ESG exclusions. The note observes that these terms can mean different things to different market participants and investors. While the note does not provide definitions of these terms, it calls on market participants to be clear as to how such terms are used in practice and provides illustrative examples of good and poor practices observed across the market.

Links:
ESMA Press Release
ESMA Thematic Note

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