Other Notable Developments
Diversity Self-Assessment: The U.S. Securities and Exchange Commission announced that it began collecting regulated entities’ voluntary Diversity Self-Assessment Submissions. The SEC aims to use the data to improve its understanding of diversity practices and policies, increase awareness and identify opportunities.
Swiss Parliament Votes on Climate: On June 12, 2024, the lower chamber of the Swiss Parliament passed a non-binding motion rejecting the European Court of Human Rights’ ruling on climate. The motion noted that the ruling disregards Switzerland’s democratic process and violates the principle of separation of powers.
U.S.: California Uses Consumer Protection Law in Greenwashing Lawsuit
On June 10, 2024, California’s Attorney General, Rob Bonta, filed an amended complaint in the state’s lawsuit seeking climate change damages from several oil companies. The original lawsuit, filed in September 2023, accuses major oil companies and the American Petroleum Institute of deceiving the public and spreading misinformation regarding the relationship between fossil fuels and climate change. The suit seeks to hold the companies responsible for climate change-related harms resulting from decades of alleged deception.
The amended complaint applies a new California law, AB 1366, which became effective on January 1, 2024. The law authorizes the disgorgement of profits in cases of unfair competition and false advertising, and it establishes a Victims of Consumer Fraud Restitution Fund that will be financed by the profits disgorged from businesses that breach consumer protection laws. The amended complaint also adds new allegations of false advertising and misleading environmental marketing.
Links:
AB 1366
People ex rel. Bonta v. Exxon Mobil - Amended Complaint
U.S.: House Judiciary Committee Targets “Climate Cartel”
On June 11, 2024, the Republican-led House Judiciary Committee published an interim report titled “Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) investing.” The report claims to have found direct evidence of a “climate cartel” including, among others, Climate Action 100+ and the California Public Employees Retirement System (“CalPERS”).
The report asserts that members of the alleged cartel colluded by agreeing to use their shareholdings to pressure companies to disclose and reduce their carbon emissions. The allegations of collusion include CalPERS harnessing its $50 million stake in ExxonMobil to support Climate Action 100+’s efforts to replace the incumbent board with “directors of the climate cartel’s choosing.”
The Committee claims that these decarbonization efforts “necessarily cause[d] reduced output and higher prices,” particularly in the fossil fuel, aviation and agricultural sectors. The Committee further accuses the Federal Trade Commission and Department of Justice of failing to take action.
Both Climate Action 100+ and CalPERS have rejected the report’s findings. In a press statement, Climate Action 100+ stressed that, while investors are responsible for their own investment and voting decisions, ESG investing reflects a “common-sense approach” that has become “unduly politicized.”
Links:
House Judiciary Committee press release
Climate Action 100+ press release
U.S.: Department of Homeland Security Enforces Import Bans on Chinese Footwear, Seafood and Aluminum Firms over Uyghur Forced Labor Allegations
On June 11, 2024, the U.S. Department of Homeland Security (“DHS”) expanded its enforcement of the Uyghur Forced Labor Prevention Act by adding three Chinese companies to the list of firms whose products are barred from importation into the United States. The targeted companies are Dongguan Oasis Shoes Co, Xinjiang Shenhuo Coal and Electricity Co and Shandong Meijia Group Co, also known as Rizhao Meijia Group. This move aims to address concerns over the alleged use of forced labor involving Uyghur and other Muslim minority groups in China’s Xinjiang region.
DHS emphasized its increased scrutiny on the seafood, aluminum and footwear sectors, which are significant contributors to Xinjiang’s economy. This latest action builds on the ongoing efforts to restrict imports from companies implicated in the alleged exploitation of Uyghur forced labor.
Numerous firms already have been added to the Uyghur Forced Labor Prevention Act Entity List as part of the U.S. government’s broader strategy to combat what it describes as systemic human rights abuses in Xinjiang. While U.S. officials assert that the Chinese government has established labor camps for Uyghurs and other minorities, China vehemently denies these allegations.
Link:
Press Release
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