Issue - June 3, 2025

📝 Editor’s Summary

From fiduciary reversals in the U.S. to climate liability rulings in Germany, ESG risk is entering a more contested legal phase. Meanwhile, regulators in Europe and Australia are tightening how companies disclose, offset, or defend their climate claims.

📌 This Week’s Key Developments

Labor Dept. to Rewrite ESG Fiduciary Rule
The U.S. Department of Labor told the Fifth Circuit it will withdraw the 2022 “Prudence and Loyalty” rule that let retirement-plan fiduciaries use ESG factors as a tiebreaker when investments were otherwise equivalent. The agency will start a new rulemaking — added to the Trump administration’s spring agenda — after 26 Republican-led states challenged the regulation, despite two prior court decisions upholding it. Timing for the replacement rule remains uncertain, but Labor says the process will move “as expeditiously as possible.”
🔗 Read more → ESG Dive

German Court Dismisses RWE Climate Liability Suit
Germany’s Higher Regional Court in Hamm has ended Peruvian farmer Saúl Luciano Lliuya’s decade-long case, ruling the flood risk to his home was too low to justify €17,000 in damages from energy giant RWE and barring further appeals. Crucially, the court said major emitters can in principle be held liable for climate-related harms under German civil law—an activist-backed finding expected to influence future claims.
🔗 Read more → BBC

FTC & DOJ Back Antitrust Suit Over ESG “Coal Collusion”
The FTC and Justice Department filed a court statement supporting Texas and 10 other states in an antitrust case alleging BlackRock, State Street, and Vanguard conspired, via “Net Zero” initiatives, to curb coal output and inflate energy prices. The agencies argue institutional investors can face liability when they leverage stakes in competing firms to pursue industry-wide objectives that suppress competition.
🔗 Read more → FTC

IFRS Issues GHG-Disclosure Q&A for IFRS S2
The IFRS Foundation released Q&A educational material on measuring and disclosing greenhouse-gas emissions under IFRS S2 Climate-related Disclosures. The resource clarifies the standard’s reliance on the GHG Protocol, explains scope and methodology questions, and supports implementation without changing S2’s underlying requirements.
🔗 Read more → IFRS

⚖️ Regulatory Spotlight

EU Council Agrees on CBAM ‘Simplification’ Regulation
The Council has reached a general approach on the Commission’s proposal to amend Regulation (EU) 2023/956 and “simplify and strengthen” the Carbon Border Adjustment Mechanism (CBAM). A single 50-tonne annual de minimis threshold would exempt small importers—mainly SMEs and individuals—from CBAM reporting and certificate obligations, yet still capture approximately 99% of embedded emissions. The draft also streamlines authorization, data collection, and emissions calculation rules, and introduces lighter procedures for claiming third-country carbon price deductions. Part of the EU’s wider “Omnibus” initiative to cut red tape, it now serves as the Council’s mandate for trilogue talks with Parliament later this year.
🔗 Read more → EU Council Document

🧼 Greenwashing Watch

EnergyAustralia Settles Greenwashing Lawsuit
EnergyAustralia apologized to 400,000 “Go Neutral” customers and settled a federal-court greenwashing suit, admitting carbon offsets don’t undo the climate harms from fossil-fuel electricity.
🔗 Read more → The Guardian

Heat-Dome Wrongful-Death Suit Targets Fossil Fuel Majors
A Seattle estate is suing Exxon, Shell, Chevron, BP and others, alleging decades-long climate deception that intensified the 2021 Pacific Northwest heat-dome and caused a fatal hyperthermia death; the case seeks damages and a court-ordered public education campaign.
🔗 Read more → Sabin Center for Climate Change Law’s Database 

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