Major ESG Developments in March 2025
Overview
The latest update from Wilson Sonsini's Sustainability and ESG Advisory Practice highlights significant regulatory and reporting developments in the ESG landscape. Key topics include the SEC's decision to end its defense of climate disclosure rules, the EPA's deregulatory actions, and updates to international ESG standards.
SEC Ends Defense of Climate Disclosure Rules
On March 27, 2025, the SEC voted to cease defending its climate-related disclosure rules, which had faced multiple legal challenges since their adoption in March 2024. This decision marks a significant shift in the regulatory landscape, as the SEC withdraws from ongoing litigation and yields its arguments to the court.
EPA's Deregulatory Actions
EPA Administrator Lee Zeldin announced a suite of 31 deregulatory actions on March 12, 2025. These actions aim to roll back various environmental regulations, including those related to oil and gas development, coal-fired power plants, and electric vehicles. The initiative reflects a broader push to align with President Trump's energy policies.
Changes in Proxy Advisor's Diversity Voting Guidelines
Proxy advisors have updated their voting guidelines to emphasize diversity on corporate boards. These changes are expected to influence shareholder voting behavior and encourage companies to prioritize diversity in their governance structures.
EU's Corporate Sustainability Reporting Directive
The EU has updated its Corporate Sustainability Reporting Directive, introducing more stringent reporting requirements for companies. These updates aim to enhance transparency and accountability in corporate sustainability practices across Europe.
Science Based Targets Initiative's Net-Zero Standards
The Science Based Targets initiative released a draft update to its corporate Net-Zero standards. This update provides clearer guidelines for companies aiming to achieve net-zero emissions, helping them align their strategies with global climate goals.
Litigation Challenging EPA Grant Fund Freeze
Litigation has emerged challenging the EPA's decision to freeze grant funds. This legal battle underscores the ongoing tensions between regulatory agencies and stakeholders over environmental funding and policy implementation.
Automotive Industry ESG Updates
The update also covers significant ESG developments in the automotive industry, highlighting the sector's efforts to enhance sustainability. Key initiatives include advancements in electric vehicle technology and increased commitments to reducing carbon emissions.
Conclusion
March 2025 has been a pivotal month for ESG developments, with significant regulatory changes and updates to international standards. These changes highlight the dynamic nature of the ESG landscape and the ongoing efforts to balance environmental, social, and governance priorities in corporate practices.
