U.S.: Oklahoma Supreme Court Holds Anti-ESG “Energy Discrimination” Law Unconstitutional as Applied to State Pension System
On April 7, 2026, the Oklahoma Supreme Court found that the Oklahoma Energy Discrimination Elimination Act of 2022 (the “EDEA”) is unconstitutional as applied to the Oklahoma Public Employees Retirement System (“OPERS”). The EDEA required the Treasurer to maintain a list of financial firms deemed to “boycott” energy companies and directed state entities to divest from those firms if they do not cease “boycotting” energy companies within 90 days of becoming listed.
The court cited the requirement set out in Article XXIII, Section 12 of the Oklahoma Constitution that OPERS assets be held, invested, and disbursed “for the exclusive purpose of providing for benefits, refunds, investment management, and administrative expenses of the individual public retirement system.” The court also cited the corresponding prohibition that the assets may not be encumbered or diverted to any other purpose. The court concluded that applying the EDEA to OPERS would impose an impermissible “dual purpose” on OPERS investment decisions by requiring divestment to advance the state’s energy policy objectives, thereby conflicting with OPERS’ constitutional obligation to act solely for retirement system purposes.
The decision is limited to the EDEA’s application to OPERS; it is unclear whether the EDEA may constitutionally be applied to other state entities.
Link:
Oklahoma Supreme Court opinion
U.S.: Utah Enacts Nation’s First Climate Liability Shield Law
On March 23, 2026, Utah Governor Spencer Cox signed into law House Bill 222, the first U.S. state-enacted legislation to broadly limit civil and criminal liability for damages or injuries arising from the actual or potential effects of greenhouse gas emissions. Under the law, a person may not be held civilly or criminally liable for such harms unless a court finds by clear and convincing evidence that the person violated either (1) an enforceable statutory limitation or restriction against emissions of a specific greenhouse gas originating in Utah or (2) the express terms of a valid state or federal permit governing the person’s greenhouse gas emissions. The law will take effect on May 6, 2026. House Bill 222 contains no express retroactivity provision, leaving its applicability to pending cases subject to dispute and judicial interpretation.
The law comes in the context of a lawsuit, brought by Our Children’s Trust on December 1, 2025, against Utah’s Board of Oil, Gas, and Mining; the state Division of Oil, Gas, and Mining (the “DOGM”); and the director of the DOGM. The lawsuit, which remains pending, seeks declaratory and injunctive relief, and alleges that certain permits authorizing coal, oil, and gas development violate the plaintiffs’ rights to life, health, and safety by contributing to air pollution and climate-related harms. In March 2025, the Utah Supreme Court affirmed a trial court’s dismissal of a similar lawsuit, Natalie R. v. State of Utah, on subject matter jurisdiction grounds. Similar liability-limiting proposals have been introduced in several energy-producing states, including Texas, Louisiana, Oklahoma, Wyoming, and West Virginia.
Links:
HB 222
Our Children’s Trust Press Release
Europe: Switzerland Proposes Sustainable Corporate Management Act Aligned with EU ESG Rules
On April 1, 2026, the Swiss Federal Council launched a consultation on Switzerland’s proposed Sustainable Corporate Management Act (the “SCMA”), which is open until July 9, 2026.
The SCMA is intended to align Swiss law with the EU’s revised sustainability framework while avoiding rules that go beyond the Omnibus amendments, which streamlined and narrowed sustainability reporting and due diligence requirements. It would introduce a two-tiered framework covering human rights and environmental due diligence and, for a broader group of companies, sustainability reporting.
The first tier would impose risk-based due diligence obligations on large enterprises, including Swiss companies with more than 5,000 full-time employees and more than CHF 1.5 billion in worldwide net turnover over two consecutive financial years, or meet thresholds tied to franchise and licensing income. Foreign companies may also fall within scope, where they meet the relevant thresholds by reference to their activities in Switzerland. These companies would be required to implement comprehensive ESG governance systems, including by adopting a sustainability strategy and code of conduct and introducing preventive and corrective measures to address adverse environmental and human rights impacts.
The second tier would apply to a broader group of large enterprises and would require sustainability reporting. Where a group meets the relevant thresholds, these obligations would generally be addressed at the level of the parent undertaking on a consolidated basis. Affected companies would be required to have their reports audited by an external auditing firm. Small- and medium-sized enterprises (i.e., companies below the applicable large-company thresholds noted above) would not be directly subject to these obligations, although they may be subject to information requests or contractual requirements through supply-chain relationships with larger covered entities.
Under the proposal, Swiss authorities would have powers to issue warnings, enjoin non-compliant conduct, impose fines, confiscate profits, and publish decisions. Serious reporting violations may give rise to criminal sanctions, whereas breaches of due diligence obligations may be subject to civil liability.
For additional background on sustainability reporting and due diligence in the EU post-Omnibus, see our Debevoise In Depth. For additional context on the challenges brought to similar legislative initiatives in the United States, see our ESG Update.
Links:
Press Release (in German)
Draft Act (in German)
Global: GHG Protocol Outlines Proposed Changes to Scope 3 Reporting Standard
On March 31, 2026, the Greenhouse Gas Protocol released a progress update on potential revisions to its Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The GHG Protocol develops widely used global, standardized frameworks to measure and manage greenhouse gas emissions, which often inform national disclosure regulation and voluntary reporting standards. Scope 3 emissions—indirect emissions from a company’s upstream and downstream value chain—are often the majority of a company’s carbon footprint but can be particularly challenging to measure and report.
The revisions, if adopted, would require companies to report at least 95% of required Scope 3 emissions to remain in conformance with the standard. The current standard does not quantify the requirement, instead requiring companies to account for all Scope 3 emissions and to disclose and justify any exclusions. The stated rationale for the change is to ensure “that all major activities attributable to a reporting company’s business (by emission magnitude)” are included in the company’s Scope 3 inventory while allowing exclusion of minor sources to permit “companies to focus calculation resources on those Scope 3 emission sources which account for the largest fraction of emissions.”
The proposed revisions would also create a new, optional Scope 3 Category 16 for “other value chain activities.” Category 16 would cover facilitated activities, licensing activities and other third-party activities from which the company earns direct, transactional income, but does not buy, sell, or own the underlying activity. Category 16 would, for example, cover many insurance and underwriting activities.
The proposed revisions included in the progress update are not yet subject to public consultation, although a complete draft standard is forthcoming.
Link:
Greenhouse Gas Protocol Scope 3 Standard Revisions Phase 1 Progress Update March 2026
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