Issue - October 6, 2026

Good morning. It’s Tuesday, October 6, and this week’s ESG Litigation Weekly covers challenges to revised U.S. fuel economy standards, sustainability reporting developments in the UK, New Zealand, and Nigeria, the dismissal of a plastic recycling claims lawsuit against ExxonMobil and other petrochemical companies for lack of standing, and more.

States and Environmental Groups Challenge Federal Fuel Economy Rule
States and local governments, along with a separate coalition of environmental and consumer groups, filed petitions on October 2 challenging the U.S. National Highway Traffic Safety Administration’s (NHTSA) SAFE Vehicles Rule III, which revises Corporate Average Fuel Economy standards for passenger cars and light trucks for model years 2022–2031. The California-led petition was filed in the First Circuit, while the environmental and consumer groups filed in the D.C. Circuit. The state-led coalition alleges violations of the Energy Policy and Conservation Act and Administrative Procedure Act, including failure to set standards at the statutory “maximum feasible” level. NHTSA says its approach complies with statutory restrictions on considering alternative-fuel technologies. The agency projects a combined required fleet average of about 34.9 mpg in 2031, compared with 49.3 mpg under its baseline retaining the 2024 standards. It also estimates that average upfront costs for new model-year 2031 vehicles would fall by $1,289 if manufacturers pass the projected savings to consumers.
🔗 Read more → Sierra Club (Press Release, Court Filing), California Attorney General (Press Release, Court Filing), U.S. Department of Transportation (Press Release), NHTSA (Final Rule)

States and Local Governments Challenge EPA Partial Repeal of Power Plant Carbon Standards
A coalition of states and local governments filed a petition in the D.C. Circuit challenging the U.S. Environmental Protection Agency’s (EPA) partial repeal of its 2024 Carbon Pollution Standards. The rule, published September 17 and effective November 16, 2026, repeals emissions guidelines for existing fossil fuel-fired steam generating units. It also removes carbon-capture-based standards for coal plants undertaking large modifications and Phase 2 standards for new baseload combustion turbines. The coalition alleges that EPA unlawfully abandoned the standards without adequately considering alternatives and the health and climate consequences. EPA says its reevaluation found that 90% carbon capture had not been adequately demonstrated for the relevant units, that costs were unreasonable, and that the applicable compliance timelines were not achievable.
🔗 Read more → New York Attorney General (Press Release, Court Filing)

Costco Faces Proposed Oregon Class Action Over Ethical Sourcing Claims
Two Oregon Costco members filed a proposed class action in the U.S. District Court for the District of Oregon on October 1, alleging misrepresentations about ethical sourcing and supply chain oversight. The complaint challenges representations concerning prohibitions on child and forced labor, traceability, disclosure of production facilities, and compliance monitoring. The plaintiffs allege that Costco’s oversight and reported labor abuses in supply chains for cocoa, cashews, seafood, and other products are inconsistent with those representations. They also challenge statements about Costco’s visibility into suppliers for its Kirkland Signature private-label brand. The lawsuit asserts claims under Oregon’s Unlawful Trade Practices Act and for unjust enrichment. It seeks actual damages or statutory damages of $200 per class member, whichever is greater, along with injunctive and other relief.
🔗 Read more → Larkins Vacura Kayser (Press Release, Court Filing), The Oregonian/OregonLive

EU General Court Partially Annuls Commission Decision on Transport Taxonomy Review
The EU General Court partially annulled the European Commission’s decision rejecting an internal-review request concerning aviation and maritime criteria under the EU Taxonomy. Environmental groups had challenged criteria allowing certain aircraft and vessels to qualify as contributing substantially to climate mitigation. In its September 30 judgment, the court found that the Commission erred in concluding that specified maritime criteria did not need a methane-slippage threshold or limit for gas-fueled ships. Where compliance relies on emissions thresholds, the court held that the criterion must include them or expressly reference the rules containing them. It annulled the Commission’s decision only on that issue and rejected the remaining grounds of challenge.
🔗 Read more → EUR-Lex (Court Judgment)

EU Anti-Greenwashing Consumer Rules Reach Application Date
September 27, 2026, was the date set for EU member states to apply national measures implementing the Empowering Consumers for the Green Transition Directive. The directive prohibits generic environmental claims, such as “green” or “eco-friendly,” unless supported by recognized excellent environmental performance relevant to the claim. It also prohibits claims that a product has a neutral, reduced, or positive greenhouse gas impact when based on emissions offsets. Sustainability labels must meet certification-scheme requirements or be established by public authorities. Claims about future environmental performance are subject to requirements for verifiable commitments, implementation plans, and independent review. The Commission’s September Q&A document notes that the rules also cover existing stock and identifies possible corrective measures, including stickers and supplementary information at the point of sale.
🔗 Read more → European Commission (Sep 2026 Q&A Document, Directive (EU) 2024/825)

UK FCA Finalizes ISSB-Aligned Sustainability Disclosure Rules for Listed Companies
The UK Financial Conduct Authority (FCA) finalized rules replacing its existing climate disclosure requirements with reporting against the UK Sustainability Reporting Standards (SRS), the UK-endorsed versions of the International Sustainability Standards Board’s (ISSB) standards. In-scope issuers will report against UK SRS S1 and S2 on a comply-or-explain basis, including international companies with secondary UK listings and depositary receipt issuers. The rules apply to accounting periods beginning on or after January 1, 2027, with first reporting in 2028. Issuers may use one year of transitional relief for Scope 3 emissions disclosures and two years for non-climate disclosures under S1. They must disclose whether they obtained third-party sustainability assurance. The separate transition-plan statement requirement excludes issuers in the secondary-listing and depositary-receipt categories.
🔗 Read more → FCA (Press Release, PS26/19)

New Zealand FMA Extends Climate Reporting No-Action Relief
New Zealand’s Financial Markets Authority (FMA) extended its no-action approach for entities affected by proposed changes to mandatory climate reporting. The government had proposed removing listed issuers with market capitalization below NZ$1 billion, investment scheme managers, and health and life insurers from the regime. The legislation did not pass before Parliament’s final sitting ahead of the election. The extension covers reporting periods ending March 31, June 30, September 30, or December 31, 2027, or January 31, 2028. For affected entities, the FMA will not enforce obligations under Part 7A of the Financial Markets Conduct Act for those periods. The regulator says this expresses its enforcement intention and does not necessarily preclude third-party legal action.
🔗 Read more → FMA (Press Release)

Nigeria SEC Requires Sustainability Reporting Implementation Plans by October 15
Nigeria’s Securities and Exchange Commission directed public companies and significant public interest capital market operators to submit sustainability reporting implementation plans by October 15, 2026. Its circular reiterates the Financial Reporting Council’s roadmap, under which mandatory IFRS S1 and IFRS S2 reporting applies to public interest entities for accounting periods beginning on or after January 1, 2028. Mandatory adoption for small and medium-sized entities begins with periods starting January 1, 2030. Entities not yet subject to mandatory reporting may adopt voluntarily for periods ending on or before December 31, 2027. Implementation plans must address board oversight, gap assessments, reporting systems, internal controls and assurance, training, timelines, the expected first reporting year, and anticipated challenges.
🔗 Read more → Nigeria Securities and Exchange Commission (Circular)

ISO and UNDP Launch Global SDG Management System Standard
The International Organization for Standardization (ISO) and the United Nations Development Programme launched ISO/UNDP 53001:2026 on September 28. The management system standard sets requirements intended to help organizations integrate the UN Sustainable Development Goals into governance, strategy, operations, and decision-making. It covers identifying relevant impacts and priorities, setting objectives, evaluating performance, and continual improvement. The standard is intended for organizations of all sizes and sectors, including businesses, governments, educational institutions, and civil society organizations. ISO says it can be integrated with existing management systems, including ISO 9001 and ISO 14001, and is designed to remain relevant beyond 2030.
🔗 Read more → ISO (Press Release, ISO/UNDP 53001)

SBTi Releases Validation Resources for Corporate Net-Zero Standard V2.0
SBTi Services published implementation resources ahead of validation bookings opening for the Corporate Net-Zero Standard Version 2.0 on February 1, 2027. The materials include a preliminary submission form, preliminary target-setting data information, validation procedures, a validation schedule, and an updated operating procedure. The data document outlines expected inputs across Scopes 1, 2, and 3, including target boundaries, methods, pathways, and coverage calculations. The schedule describes regular and focused validation processes of 60 and 30 business days, respectively, with provision for additional time when further information is required. SBTi says companies may continue submitting targets under Version 1.3 until January 31, 2028, after which corporate target submissions will use Version 2.0.
🔗 Read more → SBTi (Press Release, Preliminary Target-Setting Data Points, Preliminary Submission Form, Validation Schedule)

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Federal Court Dismisses Plastic Recycling Claims Lawsuit for Lack of Standing
The U.S. District Court for the District of Kansas dismissed a proposed class action against ExxonMobil, other petrochemical companies, and the American Chemistry Council on September 29. Eight individuals and Ford County, Kansas, alleged that industry marketing misled consumers about plastic recyclability, increased purchases and prices, and raised the county’s waste-disposal costs. The court held that the plaintiffs lacked Article III standing because they had not adequately connected their alleged injuries to the defendants’ conduct. It identified missing allegations linking specific plaintiffs to particular products, advertisements or representations by particular defendants. The court stated that its order addressed only standing and did not consider the defendants’ remaining dismissal arguments.
🔗 Read more → Justia (Court Memorandum and Order), Reuters

EIOPA Flags Extreme Heat as a Climate-Related Health Risk for Insurers and Pension Providers
The European Insurance and Occupational Pensions Authority (EIOPA) identified extreme heat as a leading climate-related risk for life and health insurers and occupational pension providers. Its report examines effects on mortality, morbidity, and longevity assumptions. According to the report, heatwaves accounted for 97% of fatalities from weather- and climate-related extremes in the EU-27 between 1980 and 2024. Wildfires and vector-borne diseases present additional health risks. EIOPA’s illustrative framework combines hazard, vulnerability, and insurance exposure to assess heatwave risk across countries and business lines, but the report notes that available data are insufficient for firm conclusions. EIOPA says current financial impacts remain limited, expects risks to increase, and encourages insurers to incorporate them into forward-looking climate risk assessments.
🔗 Read more → EIOPA (Press Release, Full Report)

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