Issue - June 24, 2025

📝 Editor’s Summary

Courts and regulators tightened the screws on ESG this week. In the United States, two Supreme Court moves—reviving refiners’ challenge to California’s EV mandate and agreeing to hear Big Oil’s bid to shift Louisiana coastal-damage cases—show the judiciary’s growing role in climate and environmental fights. At the same time, a Memphis data center notice foreshadows Clean Air Act litigation against Elon Musk’s xAI. In Europe, policymakers pulled in opposite directions: Brussels signaled that it would scrap its flagship Green Claims Directive even as it struck a deal to streamline the Carbon Border Adjustment Mechanism (CBAM), and watchdogs imposed or upheld greenwashing penalties on airlines, asset managers, and beverage brands.

📌 This Week’s Key Developments

Elon Musk’s xAI Threatened with Clean Air Act Suit over Unpermitted Gas Turbines
The Southern Environmental Law Center and NAACP issued a 60-day notice of intent to sue Elon Musk’s xAI for operating dozens of methane-fired turbines at its Memphis data center without any air-quality permits. Aerial and thermal images show at least 35 units running since June 2024, releasing smog-forming pollutants and hazardous chemicals near predominantly Black neighborhoods already burdened by industrial emissions. The groups claim that xAI’s actions violate the Clean Air Act and exacerbate Shelby County’s non-attainment ozone status; a federal lawsuit could follow if the company fails to obtain permits and install the best-available controls.
🔗 Read more → Southern Environmental Law Center

U.S. Supreme Court Revives Industry Challenge to California EV & Emissions Waiver
In a 7-2 decision, the Supreme Court said fuel producers and refiners do have standing to contest the EPA’s 2022 reinstatement of California’s Clean Air Act waiver, authority that lets the state impose stricter tailpipe limits and mandate zero-emission vehicle sales through 2025. Writing for the majority, Justice Kavanaugh rejected the lower-court view that the companies were mere “unaffected bystanders,” noting the rules directly curtail demand for liquid fuels. The ruling returns the case to the D.C. Circuit, where industry groups will press claims that California’s EV mandates overstep federal law. California vowed to “vigorously defend” its long-standing waiver power as more litigation over its 2035 gasoline-vehicle ban looms.
🔗 Read more → Reuters

Rio Tinto Pays $139 Million to Settle Oyu Tolgoi Delay Lawsuit
Rio Tinto has agreed to a $138.75 million class-action settlement, ending investor claims that it concealed 2.5-year schedule slippage and $1 billion-plus overruns during the 2018-19 underground expansion of Mongolia’s Oyu Tolgoi copper mine. The deal, filed in U.S. federal court and led by hedge fund Pentwater Capital on behalf of Turquoise Hill shareholders, also covers former CEO Jean-Sébastien Jacques. Rio denies wrongdoing, saying it settled to avoid litigation costs and uncertainty.
🔗 Read more → Mining.com

EU Strikes Deal to Streamline CBAM for Importers
Council and Parliament negotiators reached a provisional “Omnibus I” agreement to simplify the EU’s Carbon Border Adjustment Mechanism. Key changes include a single 50-tonne-per-year de minimis threshold that exempts most SMEs and individuals, while still covering approximately 99% of embedded emissions. The provisional agreement also eases authorization, data collection, and emissions calculation rules, allows importers to continue trading while awaiting 2026 registration, and clarifies provisions related to penalties and the certificate platform. Endorsement and formal adoption are expected by September 2025.
🔗 Read more → Council of the EU

U.S. Supreme Court Takes Up Chevron Bid to Shift Louisiana Coastal-Damage Suits to Federal Court
The Court agreed to review the petitions of Chevron, ExxonMobil, and other major companies to move a raft of parish-led lawsuits—including April’s landmark $740 million Plaquemines verdict—out of Louisiana state courts and into federal jurisdiction. The companies argue that their World War II-era production under federal contracts places the cases squarely in federal court, whereas the parishes say it is another delay tactic after a decade of procedural wrangling. A ruling could affect at least 10 active coastal-land-loss suits and set a nationwide precedent on where climate-related infrastructure claims are heard.
🔗 Read more → ABC News

⚖️ Regulatory Spotlight

EU to Withdraw Green Claims Directive After Political Pushback
Responding to demands from the center-right European People’s Party, the Commission signaled it will withdraw its 2023 Green Claims Directive, which sought to curb corporate greenwashing by requiring firms to substantiate environmental claims. Brussels says negotiations have steered the file toward “overly complex” rules that could burden up to 30 million micro-enterprises, clashing with its simplification agenda. Council and Parliament negotiators insist trilogue talks can still proceed until the College of Commissioners adopts a formal withdrawal.
🔗 Read more → POLITICO

🧼 Greenwashing Watch

EU Airlines Still “Flying Green” on Paper
Consumer watchdog BEUC says greenwashing remains widespread after reviewing 17 carriers: “green fares,” carbon-offset add-ons, and softened wording continue to mislead passengers about aviation’s climate impact, even as an EU probe into airline marketing is still underway.
🔗 Read more → Barron’s

German Prosecutors Drop Greenwashing Probe Into Former DWS CEO
Frankfurt prosecutors have closed their criminal investigation of ex-DWS chief Asoka Woehrmann, citing low public interest now that he’s out of capital-markets roles, and noting that ESG shortcomings at the asset manager weren’t solely his responsibility. DWS itself paid €25 million in February to settle the case.
🔗 Read more → Bloomberg

Royal Unibrew Hit With Record Danish Greenwashing Fine
The brewer will pay DKr 4 million (~ $617k) after regulators ruled that its “CO₂-neutral” Egekilde water misled consumers by omitting the reliance on carbon offsets; the label has since been removed.
🔗 Read more → Just Drinks

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