Issue - August 26, 2025

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Good morning. It’s Tuesday, August 26, and this week’s ESG Litigation Weekly covers a federal challenge to the CP2 LNG air permit, a youth-led constitutional climate lawsuit in Wisconsin, and an EU–US trade framework signaling flexibility on CSRD and CSDDD, and more.

⚖️ ESG Casefile

Environmental Groups Challenge CP2 LNG Air Permit in Federal Court
Three environmental groups have filed suit in the Fifth Circuit Court of Appeals to block the Clean Air Act permit for Venture Global’s CP2 LNG export facility in Louisiana. The Louisiana Bucket Brigade, Sierra Club, and Environmental Integrity Project argue that the Louisiana Department of Environmental Quality issued flawed permits that endanger public health and worsen pollution in Cameron Parish, a low-income community already burdened by industrial activity. If built, CP2 would be among the nation’s largest LNG plants, with lifecycle emissions equivalent to annual emissions of more than 47 million cars or 54 coal plants. Critics warn of premature deaths, rising health costs, and local economic harm.
🔗 Read more → Sierra Club

Wisconsin Youth File Constitutional Climate Lawsuit Against State
Fifteen young Wisconsinites, ages 8 to 17, have sued the Wisconsin Public Service Commission and Legislature in Dane County Circuit Court, claiming that state laws promoting fossil fuels and blocking renewable energy violate their constitutional rights. The case, Dunn v. Wisconsin Public Service Commission, challenges statutes that prevent regulators from considering air pollution when approving new power plants and bar them from requiring utilities to expand renewable energy. Plaintiffs cite harms such as asthma, climate anxiety, flooding, and loss of cultural resources, and ask the court to strike down the laws and restore oversight needed to decarbonize the power sector.
🔗 Read more → Our Children’s Trust (PDF)

Judge Orders Shutdown of Florida’s “Alligator Alcatraz” Detention Center
A federal judge has issued a preliminary injunction halting operations at the controversial detention center built inside Big Cypress National Preserve, known as “Alligator Alcatraz.” The order requires the state of Florida and the Trump administration to stop construction, cease admitting new detainees, and wind down operations within 60 days. Judge Kathleen Williams found that the facility, which was built without environmental review, threatens endangered wildlife, wetlands, and water quality in the Everglades. The injunction will remain in effect while the lawsuit brought by environmental groups and the Miccosukee Tribe proceeds in court.
🔗 Read more → Friends of the Everglades

Qantas Fined Record A$90 Million for Illegal Outsourcing of Jobs
Australia’s Federal Court has ordered Qantas to pay an A$90 million penalty for unlawfully outsourcing more than 1,800 ground-handling jobs during the COVID-19 pandemic. Justice Michael Lee ruled the airline acted with disregard for workers’ rights and questioned the sincerity of its apologies. A$50 million of the penalty will be paid to the Transport Workers Union, with the allocation of the remainder to be determined at a later hearing. The fine is quoted as the largest imposed for workplace law violations in Australia. It follows earlier rulings against Qantas and is separate from the A$120 million compensation package for affected staff.
🔗 Read more → ABC News Australia

Bayer’s Monsanto Moves to Settle Sky Valley PCB Lawsuits
Monsanto, a Bayer subsidiary, has reached agreements in principle to resolve all pending lawsuits tied to alleged polychlorinated biphenyl (PCB) exposure at the Sky Valley Education Center in Washington state, covering more than 200 plaintiffs. The settlements, whose terms remain confidential, exclude nine prior jury verdicts involving 49 plaintiffs that are still under appeal. Bayer said the costs are covered by provisions taken in Q2 2025 and emphasized it may settle cases strategically to reduce litigation risk. The company also continues to pursue indemnity claims against former industrial customers under historic contracts related to PCB use.
🔗 Read more → Bayer

Campaigners Challenge HyNet Carbon Capture Project in Court
HyNot, a community campaign group, has filed for a judicial review of the UK government’s decision to approve the HyNet carbon capture and storage scheme in Liverpool Bay. The project, led by Eni, plans to produce blue hydrogen from fossil gas at Stanlow refinery and store captured CO₂ under the seabed. HyNot argues the approval was unlawful due to failures in environmental assessment, public consultation, and evaluation of accident risks. Campaigners say the scheme locks the UK into fossil fuel use, relies on unproven and costly technology, and poses serious health and safety hazards for local communities.
🔗 Read more → HyNot

🏛️ Regulatory Developments

EU–US Joint Statement Signals Flexibility on CSDDD and CSRD
The US and the EU issued a Joint Statement on a Framework Agreement on Reciprocal, Fair, and Balanced Trade, covering tariffs, market access, energy cooperation, and regulatory alignment. As part of the framework, the EU pledged to ensure that the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) do not unduly restrict transatlantic trade, including efforts to reduce administrative burdens, reconsider elements on civil liability and climate-transition obligations, and explore flexibilities for non-EU companies with strong domestic regulations.
🔗 Read more → European Commission

EPA Grants Majority of Small Refinery Waiver Requests Under RFS
The US Environmental Protection Agency announced decisions on 175 petitions for small refinery exemptions under the Renewable Fuel Standard (RFS), covering compliance years 2016 through 2024. EPA granted full exemptions to 63 petitions, partial exemptions to 77, denied 28, and found 7 ineligible. The rulings follow consultation with the Department of Energy and consideration of statutory factors, refinery data, and economic impacts. The decisions clarify EPA’s interpretation of its authority under the Clean Air Act and mark final agency action on these petitions, with implications for future biofuel demand and refinery compliance.
🔗 Read more → EPA

USDA Blocks Federal Funding for Large Solar Projects on Farmland
US Department of Agriculture (USDA) Secretary Brooke Rollins announced that the USDA will no longer allow taxpayer dollars to fund large solar panel projects on prime farmland or approve the use of panels made by foreign adversaries in USDA programs. The move follows concerns that subsidized solar farms have displaced farmland, raising costs and limiting access for farmers. Effective immediately, wind and solar projects are also barred from USDA’s Rural Development Business and Industry Guaranteed Loan Program, while only small, facility-sized solar systems will remain eligible under the Rural Energy for America Program (REAP) Guaranteed Loan Program. The policy reflects the administration’s broader rollback of renewable energy subsidies in favor of farmland protection.
🔗 Read more → USDA

ISSB Issues Guidance on Disclosing Anticipated Financial Effects
The International Sustainability Standards Board (ISSB) released guidance to help companies disclose anticipated financial effects of sustainability and climate-related risks under IFRS S1 and S2. The material explains how businesses should report both quantitative and qualitative impacts on financial position, performance, and cash flows across short-, medium-, and long-term horizons. It highlights proportionality mechanisms that let companies use reasonable, supportable information available without undue cost or effort, while requiring alignment with financial statements. The guidance also includes examples showing how firms might disclose impacts from carbon pricing, flooding, water scarcity, and other climate-related risks and opportunities.
🔗 Read more → ISSB Guidance (PDF)

Public Hearings Show Broad Opposition to EPA’s Proposed Repeal of Endangerment Finding
At the first of four public hearings, experts and community members voiced strong opposition to the EPA’s proposal to repeal its 2009 endangerment finding, which underpins federal regulation of greenhouse gas emissions. Out of roughly 200 speakers, fewer than 10 supported the move, while the rest warned of major health, environmental, and legal risks. Medical associations stressed that rescinding the finding would worsen air pollution and harm vulnerable communities. State attorneys general criticized the proposal as unlawful and based on flawed science. Some industry groups, such as the American Petroleum Institute, on the contrary, expressed support for the EPA’s proposal.
🔗 Read more → Inside Climate News

UK Opens Consultation on Draft Transition Finance Guidelines
The UK Transition Finance Council has released draft Transition Finance Guidelines to steer capital toward companies credibly transitioning to net zero. The voluntary framework is interoperable with disclosure standards developed by ISSB and Transition Plan Taskforce (TPT) and is built to evaluate the credibility of an entity’s ambition, transition planning, and progress. It is designed to work across asset classes and jurisdictions, helping reduce greenwashing risks while supporting financing for high-emitting sectors. Feedback is invited until 19 September 2025, followed by a second consultation later in 2025, with final Guidelines expected in 2026.
🔗 Read more → Transition Finance Guidelines (PDF)

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🧼 Greenwashing Watch

Investors File Greenwashing Complaint Against Cenovus and Enbridge
Shareholder group Investors for Paris Compliance (I4PC) has lodged a complaint with the Alberta Securities Regulator (ASC), accusing Cenovus and Enbridge of misleading investors with their net-zero claims. The filing alleges both companies are expanding fossil fuel production while promoting net zero strategies, setting inadequate or misleading targets that downplay scope 3 emissions, and allocating only minimal capital to transition activities. I4PC also flagged Cenovus for withdrawing net-zero disclosures entirely in 2024. The group is urging regulators to investigate and issue guidance on net zero claims for Canadian-listed companies.
🔗 Read more → I4PC Complaint (PDF)

Copenhagen Fashion Week Faces Greenwashing Scrutiny
Copenhagen Fashion Week (CPHFW), long promoted as the “greenest” fashion week, is facing mounting criticism over alleged greenwashing and weak enforcement of its 19 sustainability requirements. Danish NGOs and the Consumer Ombudsman have raised concerns that brands continue to exaggerate their eco-claims, with examples including polyester-heavy collections marketed as “sustainable” and missed targets on plastic phase-outs. Critics warn that self-reporting, limited oversight, and a lack of third-party audits undermine the framework’s credibility. Without stronger accountability, CPHFW risks exporting its flaws to other fashion weeks that are adopting its standards, leaving its reputation and influence under threat.
🔗 Read more → Forbes

💡 Insight of the Week

ICJ Opinion Expands Litigation Risks for Companies and Investors
Principles for Responsible Investment (PRI) published an investor briefing for PRI signatories to better understand the International Court of Justice (ICJ) advisory opinion on States’ climate obligations. One of the key points highlighted is the implications for companies and institutional investors, particularly the potential effects on the litigation risk landscape. Corporations, especially state-owned enterprises and private actors tied to fossil fuel production or subsidies, may face new legal challenges if linked to a State’s breach of climate or human rights duties. Investors could also face liability or reputational risks, as well as exposure in Investor-State disputes, underscoring the need for robust due diligence and transition planning.
🔗 Read more → PRI Investor Briefing (PDF)

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