JULY 3, 2026
Legal ESG — 2026-07-03
Legal ESG — 2026-07-03
The week of June 26 to July 3 delivered a compressed sequence of ESG regulatory turning points on both sides of the Atlantic, each carrying direct implications for how law firms staff and price ESG advisory work. The EU's ESG Ratings Regulation took effect on July 2, formally bringing MSCI, Sustainalytics, ISS, and other providers under ESMA supervision for the first time, while a Paris court forced TotalEnergies to fold Scope 3 emissions into its statutory vigilance plan — a ruling likely to reshape vigilance-plan drafting across French-exposed multinationals. In the United States, the SEC's proposed rescission of its 2024 climate disclosure rules entered a comment period running to August 3, even as courts continued to shield proxy advisers from state-level "anti-ESG" restrictions. Together with looming EU deadlines on green claims enforcement, forced labour guidance, and CSDDD implementation, the week underscores a market bifurcating between an EU tightening supervisory infrastructure and a US retreating from prescriptive mandates while common-law and consumer-protection theories of liability keep expanding.
Regulation & Disclosure
EU ESG Ratings Regulation enters into force, ESMA begins supervising MSCI, ISS, Sustainalytics
Regulation (EU) 2024/3005 became fully applicable on July 2, 2026, placing every ESG rating provider operating in the EU — regardless of where headquartered — under direct ESMA authorization and supervision for the first time in any jurisdiction. Existing providers such as MSCI, Morningstar Sustainalytics, ISS, and S&P Global must notify ESMA of intent to continue operating by August 2 and file full authorization applications by November 2, after which unauthorized providers must cease EU activity. For law firms, this creates immediate diligence work: clients that reference third-party ESG ratings in marketing, fund documentation, or SFDR Article 13 disclosures need to confirm their rating providers are on ESMA's registration track, and outside counsel should be advising on contractual contingencies if a provider fails to notify or is refused authorization. The regulation also amends SFDR to require disclosure of underlying rating information when ratings are used in marketing materials, adding a new compliance layer for asset managers and their counsel.
Source: Findex: EU ESG Ratings Regulation Takes Effect, Bringing Providers Under ESMA Oversight
EU ESG Ratings Regulation Enters Into Force — Regulation & Disclosure
Findex: EU ESG Ratings Regulation Takes Effect, Bringing Providers Under ESMA Oversight ↗ · article: articles/2026-07-03-eu-esg-ratings-regulation-esma.md · tags: Legal ESG, Legal Risk, Legal Operations
SEC climate disclosure rescission comment period runs to August 3
The SEC's proposal to rescind its 2024 climate-related disclosure rules, published in the Federal Register on June 3, keeps its formal comment window open through August 3, 2026, with a final rescission vote unlikely before late 2026 or early 2027. Crucially, the rescission does not eliminate existing materiality-based obligations: Regulation S-K Items 101, 103, and 105, along with MD&A requirements under Item 303, continue to require disclosure of material climate-related risks, meaning public company counsel must keep advising on principles-based climate disclosure even as the prescriptive 2024 framework unwinds. Securities counsel should be preparing comment letters now and advising SEC reporting teams that SAB 74 disclosures tied to the 2024 rules can generally be phased out only after a final rescission vote, not upon the proposal itself. The result is a prolonged transitional period in which corporate disclosure committees face reduced prescriptive obligations but undiminished litigation exposure for omitting material climate risk.
SEC Climate Rule Rescission Comment Period — Regulation & Disclosure
Finrep.ai: SEC Climate Disclosure Rescission — What Controllers and SEC Reporting Teams Need to Know Before August 3 ↗ · article: articles/2026-07-03-sec-climate-rule-rescission.md · tags: Legal ESG, Legal Risk, Legal Operations
Climate & Litigation
Paris court orders TotalEnergies to add Scope 3 emissions to vigilance plan
The Paris Judicial Court ruled on June 25 that TotalEnergies must disclose the climate risks tied to emissions from its oil and gas products — including Scope 3 emissions from end users' combustion of its fuels — and revise its statutory vigilance plan within six months to address them, applying France's 2017 duty of vigilance law to climate risk for the first time. The court stopped short of ordering production cuts or binding emissions targets sought by the NGO coalition (Sherpa, Notre Affaire à Tous, France Nature Environnement, and the City of Paris), but its reasoning — that "extracting, refining and marketing a barrel of oil inevitably leads to its combustion" — establishes that value-chain emissions fall within vigilance-law scope. For law firms advising energy and heavy-industry clients under French vigilance law or the incoming CSDDD, this is the clearest signal yet that vigilance plans must engage with downstream emissions, not just direct operational impacts, and that courts will treat inadequate Scope 3 treatment as an actionable gap rather than a voluntary disclosure choice. TotalEnergies has said it is reviewing its legal options while committing to update its plan.
Source: Reuters: TotalEnergies must address climate risks linked to its products, French court rules
TotalEnergies Ordered to Add Scope 3 Emissions to Vigilance Plan — Climate & Litigation
Reuters: TotalEnergies must address climate risks linked to its products, French court rules ↗ · article: articles/2026-07-03-totalenergies-scope-3-vigilance-plan.md · tags: Legal ESG, Legal Risk, Legal Operations
Multnomah County's $52 billion climate case against oil majors reaches key hearings
Oregon state court judge Adele Ridenour heard two full days of arguments this week in Multnomah County's roughly $52 billion lawsuit against Chevron and other fossil fuel companies over the 2021 Pacific Northwest heat dome, which killed 69 people. Defense counsel Theodore Boutrous argued federal law preempts the claims and that defendants' Oregon contacts are insufficient for the case to proceed there, while the county maintains it is pursuing deception-based claims rather than seeking to regulate emissions nationally; the same federal preemption question is expected before the US Supreme Court this fall in a related Colorado case. The case sits alongside nearly 40 similar state and local government suits nationally, and coincides with a growing legislative countertrend — Oklahoma and Louisiana have enacted industry-backed immunity laws, and federal immunity legislation is pending in Congress despite opposition from California, New York, and Oregon governors. Litigation counsel should track the anti-SLAPP motion hearings scheduled for October, which will test whether state anti-SLAPP statutes can be used defensively against municipal climate suits — a novel procedural vector with implications well beyond Oregon.
Source: The New York Times: Oil Industry Lawyers Fight a $50 Billion Climate Case in Oregon
Multnomah County Climate Case Hearings — Climate & Litigation
The New York Times: Oil Industry Lawyers Fight a $50 Billion Climate Case in Oregon ↗ · article: articles/2026-07-03-multnomah-county-oil-climate-case.md · tags: Legal ESG, Legal Risk, Legal Operations
Supply Chain & Human Rights
EU Forced Labour Regulation implementation guidance misses June 14 deadline
The European Commission's required Article 11 guidance packages — covering investigation procedures for competent authorities, due diligence expectations for economic operators, and complaint procedures for civil society — along with a public forced-labour risk database, were due June 14, 2026, but had not appeared as of late June, with no official explanation offered by the Commission. Enforcement of the underlying market prohibition does not begin until December 14, 2027, so compliance teams face uncertainty rather than immediate exposure, but the delay fits a broader pattern of slippage across EU supply-chain legislation, including the Deforestation Regulation and multiple CSDDD revisions. Counsel advising importers and multinational supply chains should note that the FLR's investigative framework already rewards documented, risk-based due diligence undertaken in advance of formal guidance — meaning clients should not wait for the guidance to begin mapping forced-labour exposure, updating supplier questionnaires, and aligning practices with the OECD Due Diligence Guidance and UN Guiding Principles, which the eventual EU guidance is expected to track closely.
Source: GAN Integrity: The EU's Forced Labour Guidelines Are Overdue. That's Not a Crisis
EU Forced Labour Regulation Guidance Delayed — Supply Chain & Human Rights
GAN Integrity: The EU's Forced Labour Guidelines Are Overdue. That's Not a Crisis ↗ · article: articles/2026-07-03-eu-forced-labour-regulation-delay.md · tags: Legal ESG, Legal Risk, Legal Operations
European Commission consultation on CSDDD implementation guidelines open until July 24
The Commission opened a stakeholder consultation on June 14 seeking input to shape the implementation guidelines for the Corporate Sustainability Due Diligence Directive, covering due diligence processes, stakeholder engagement, and penalties, with a response deadline of July 24, 2026, ahead of planned guideline adoption in Q1 2027. The questionnaire specifically invites comment on which scoping tools are cost-effective, what legal obstacles arise from third-country information-collection laws, and general best practices for due diligence — feedback that will directly shape compliance expectations for both EU-based companies and non-EU companies with significant EU-market turnover under Omnibus-adjusted thresholds. Law firms with CSDDD advisory practices have a limited window to submit client-informed comments that could materially affect the eventual guidance, particularly around Tier 1 versus extended-chain due diligence obligations and monitoring frequency, both of which were loosened under the Omnibus I simplification package finalized earlier this year. Firms should treat this consultation as a rare opportunity to shape enforcement-relevant guidance before it hardens into final form.
Source: Latham & Watkins: European Commission Opens Consultation on Future CSDDD Guidelines
CSDDD Implementation Guidelines Consultation — Supply Chain & Human Rights
Latham & Watkins: European Commission Opens Consultation on Future CSDDD Guidelines ↗ · article: articles/2026-07-03-csddd-consultation-deadline.md · tags: Legal ESG, Legal Risk, Legal Operations
Governance
Proxy advisers notch third court win against state "anti-ESG" laws
A federal judge in the Southern District of Indiana granted a preliminary injunction on June 26 blocking a state law that would have required proxy advisers ISS and Glass Lewis to disclose a "written financial analysis" whenever recommending votes against company management, finding the law amounted to unconstitutional viewpoint discrimination. The ruling marks the third such injunction — following similar wins in Texas and Kansas — against a coordinated wave of Republican-backed state legislation aimed at curbing proxy advisers seen as favoring ESG-linked shareholder resolutions on climate and workforce diversity. For governance counsel, the pattern suggests state-level anti-ESG proxy regulation faces a difficult constitutional path, though litigation continues in Kentucky, Florida, and four other states, with Florida separately pursuing consumer-protection and antitrust theories against the same firms. Corporate governance and public company advisory teams should treat proxy advisory engagement as a continuing area of regulatory volatility, with outcomes varying meaningfully by legal theory (First Amendment claims succeeding where antitrust and consumer-protection theories remain untested).
Source: Reuters: Proxy advisers notch third legal win staving off Republican 'anti-ESG' rules
Proxy Advisers Win Third Anti-ESG Law Challenge — Governance
Reuters: Proxy advisers notch third legal win staving off Republican 'anti-ESG' rules ↗ · article: articles/2026-07-03-proxy-advisers-anti-esg-injunction.md · tags: Legal ESG, Legal Risk, Legal Operations
Enforcement & Greenwashing
EU Green Claims Directive shelved, but ECGT enforcement lands September 27
While the standalone Green Claims Directive proposal remains dormant amid political backlash, the already-adopted Empowering Consumers for the Green Transition Directive (ECGT, Directive 2024/825) becomes directly enforceable across all 27 member states on September 27, 2026, banning unsubstantiated generic claims like "eco-friendly" or "sustainable," prohibiting offset-based "carbon neutral" product claims outright, and barring self-certified sustainability labels absent recognized independent certification. Penalties reach at least 4% of a trader's annual turnover in the relevant member state, or €2 million where turnover cannot be established, with no grandfathering for products already in market channels. Marketing, compliance, and litigation counsel should be running claims audits now — mapping every consumer-facing environmental claim, including brand names and visual identity elements, against the four prohibited categories, and documenting substantiation evidence chains before the enforcement date, since national consumer protection authorities will have direct enforcement power once the deadline passes and there is no transition period.
Source: My Green Comms: Green Claims Compliance 2026 — Why Enforcement Risk Is Higher, Not Lower
EU Green Claims Enforcement Begins September 27 — Enforcement & Greenwashing
My Green Comms: Green Claims Compliance 2026 — Why Enforcement Risk Is Higher, Not Lower ↗ · article: articles/2026-07-03-eu-green-claims-directive-enforcement.md · tags: Legal ESG, Legal Risk, Legal Operations
Law Firm ESG Practice
Greenpeace's anticipated JBS lawsuit signals climate liability spreading to agriculture
Following an April 2026 legal information-demand letter under new Dutch disclosure-access legislation, Greenpeace Netherlands is preparing what it describes as a precedent-setting climate and human rights lawsuit against JBS N.V. in Dutch courts, arguing the meat producer's methane emissions — estimated to exceed those of Shell and ExxonMobil combined in 2023 — and its planned $2.5 billion Nigeria expansion breach a Dutch corporate duty of care. Arnold & Porter's environmental practice flagged the matter as evidence that plaintiffs, emboldened by earlier greenwashing wins, are now extending direct climate-liability theories beyond fossil fuel companies into industrial agriculture, a sector with comparatively less litigation history and correspondingly less-developed defense playbooks. Law firms building out ESG and climate litigation capacity should treat the JBS matter as a bellwether for how Dutch duty-of-care doctrine and novel EU corporate-disclosure-access laws can be combined to compel pre-litigation transparency, a procedural tool likely to be replicated against other high-emissions food and agriculture clients. Firms are already responding to this expanding surface area: recruitment activity in ESG and sustainable finance practice groups continued this month, with New York firms advertising senior ESG counsel roles specifically covering climate-related regulation and transaction strategy work for private equity and corporate clients.
Greenpeace's Anticipated JBS Suit Expands Climate Liability to Agriculture — Law Firm ESG Practice
Arnold & Porter: Greenpeace's Anticipated Lawsuit Against JBS Signals More Aggressive Action Against Food Producers for Alleged Climate Change Impacts ↗ · article: articles/2026-07-03-greenpeace-jbs-climate-lawsuit.md · tags: Legal ESG, Legal Risk, Legal Operations
Upcoming Events
- July 24, 2026 — Deadline for stakeholder submissions to the European Commission's CSDDD implementation guidelines consultation.
- August 2, 2026 — Deadline for existing ESG rating providers active in the EU to notify ESMA of intent to seek authorization or recognition.
- August 3, 2026 — Comment deadline on the SEC's proposed rescission of 2024 climate-related disclosure rules.
- September 27, 2026 — EU Empowering Consumers for the Green Transition Directive (ECGT) becomes directly enforceable across all member states, targeting greenwashing claims.
- November 2, 2026 — Deadline for ESG rating providers to submit full ESMA authorization or recognition applications; unauthorized providers must cease EU operations thereafter.
- December 2026 (six months from June 25 ruling) — TotalEnergies must present its revised vigilance plan, incorporating Scope 3 emissions, to the Paris Judicial Court.
- October 2026 — Anti-SLAPP motion hearings scheduled in Multnomah County's climate liability case against oil majors.
- December 14, 2027 — EU Forced Labour Regulation enforcement begins.
Inside Practice · Legal ESG · Week of 2026-06-28 to 2026-07-03