Other Notable Developments
Greenwashing Litigation: RepRisk released its annual greenwashing report, finding for the first time in six years a decrease, according to its assessment criteria, in the overall number of companies across sectors and jurisdictions associated with greenwashing risk.
Nuclear: Google announced an agreement to purchase nuclear energy from multiple small modular reactors, to be developed by nuclear technology company Kairos Power, in what Google described as the world’s first agreement of its kind.
Corporate Civic Engagement: The Berkeley Law Centre for Law and Business published a report on De-Risking Corporate Civic Engagement, which aims to educate employers and employees on mitigating legal risks associated with corporate civic engagement and to share ways to encourage employees’ voter participation.
U.S.: Supreme Court Declines to Stay the EPA’s Power Plant Rule While Litigation Proceeds
On October 16, 2024, the U.S. Supreme Court declined to stay a U.S. Environmental Protection Agency (“EPA”) rule requiring a 90% reduction in the greenhouse gas emissions of existing coal-fired power plants that expect to operate past 2039 and of new natural gas plants (the “Rule”), with deadlines starting in 2030. For more on the requested stay, see our previous ESG Weekly Update.
Twenty-five states and various industry groups had filed stay applications. Accompanying the Supreme Court’s order denying a stay, Justice Kavanaugh (joined by Justice Gorsuch) stated that the applicants had shown a “strong likelihood of success on the merits as to at least some of their challenges” to the Rule. However, Justice Kavanaugh reasoned that applicants were unlikely to suffer irreparable harm before the U.S. Court of Appeals for the D.C. Circuit decides the merits, given that there was no need to begin work to comply with the Rule until June 2025.
The D.C. Circuit Court previously refused to stay the Rule in July 2024 on the grounds that the applicants failed to show: (i) a likelihood of success of their claims that the EPA acted arbitrarily in determining that carbon capture or other emission control technologies can address emission reduction targets and (ii) irreparable harm because compliance deadlines under the Rule did not start until 2030.
Links:
U.S. Supreme Court Order
U.S. Court of Appeals for the D.C. Circuit Order
EPA Rule on Greenhouse Gas (GHG) Emissions
U.S.: Fifth Circuit Reviews Dismissal of Environmental Racism Suit Against Louisiana Parish
On October 7, 2024, the U.S. Court of Appeals for the Fifth Circuit heard oral argument on an appeal by Inclusive Louisiana, Rise St. James and Mt. Triumph Baptist Church involving allegations of environmental racism against St. James Parish. In November 2023, the district court had dismissed the complaint, which involves a region between Baton Rouge and New Orleans referred to as the “Chemical Corridor” because of its high concentration of industrial facilities.
The plaintiffs first filed suit in the Eastern District of Louisiana in March 2023, alleging that St. James Parish violated the U.S. Constitution’s Thirteenth and Fourteenth Amendments. The plaintiffs’ amended complaint, filed in July 2023, alleged that more than three-quarters of the parish’s industrial facilities were in the Fourth and Fifth Districts, which have majority Black populations. The plaintiffs further alleged that the placement of such facilities in largely Black communities caused adverse health outcomes, diminished property values and the desecration of significant cemeteries.
Link:
Amended Complaint
Canada: Government to Introduce Federal Climate Disclosure Regime
On October 9, 2024, the Canadian government introduced amendments to the Canada Business Corporations Act that would require large, federally incorporated companies to disclose climate-related financial information. The details of these reporting obligations, including the thresholds for companies to be in scope of the rules, are yet to be announced. The government stated that small- and medium-sized businesses will not be subject to the new requirements but will be encouraged to release climate-related information on a voluntary basis.
The government also announced a plan to release a voluntary “Made-in-Canada” sustainable finance taxonomy that would provide guidance on defining “green” and “transition”-related economic activities. This taxonomy will be developed and governed by an external third-party organization, the details of which have not been announced.
Link:
Press Release
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