Other Notable Developments

B Lab Issues New ESG Certification Standards: B Lab is a non-profit organization granting “B Corp” certification to for-profit organizations that voluntarily meet certain environmental and social standards. On April 8, 2025, B Lab issued new certification standards which move away from cumulative point scoring, and require certified companies to meet requirements across seven “Impact Topics.”

U.S.: SEC Ends Defense of Climate Disclosure Rules

On March 27, 2025, the U.S. Securities and Exchange Commission (“SEC”) announced it would no longer defend its rules mandating the disclosure of climate-related risks and greenhouse gas emissions (the “Climate Disclosure Rules”). These rules were initially adopted on March 6, 2024 under former SEC Chair Gary Gensler. Following their adoption, the rules faced legal challenges from several states and private entities, with the resulting petitions consolidated in the Eighth Circuit under State of Iowa, et al. v. SEC, No. 24-1522 (8th Cir. 2024).

In light of the ongoing litigation, implementation of the Climate Disclosure Rules has been paused. While the SEC had previously defended the rules, the Commission’s March 27 press release confirmed that it had submitted a letter to the court formally withdrawing its defense. The letter also instructed Commission counsel not to pursue the arguments presented in its prior brief and relinquished any scheduled oral argument time back to the court.

In response, SEC Commissioner Caroline Crenshaw issued a statement strongly criticizing the Commission’s decision. She asserted that the move was “inconsistent with the [Administrative Procedure Act], historical practice, and [embodied] bad governance.” Commissioner Crenshaw emphasized that the proper course of action would have been to initiate a formal rulemaking process to amend or rescind the regulation, rather than withdrawing its legal defense.

The case remains active, and the Eighth Circuit has not yet issued a ruling or public statement.

Links:
Climate Disclosure Rules
SEC Press Release
Commissioner Caroline A. Crenshaw Statement

U.S.: OCC Ends Climate Risk Guidance for Large Banks

On March 31, 2025, the U.S. Office of the Comptroller of the Currency (“OCC”) announced it terminated its involvement in the interagency principles for climate-related risk guidance for financial institutions managing more than $100 billion in assets. This action signifies a departure from previous efforts aimed at integrating climate-related considerations into banking risk management frameworks.

The principles encourage large financial institutions to consider various categories of climate risk, including those related to severe weather events as well as to regulatory changes and evolving market demands for their sustainable practices. Acting Comptroller of the Currency Rodney Hood, designated by U.S. Treasury Secretary Scott Bessent, said that the climate-related risk principles “are overly burdensome and duplicative” of the OCC’s existing guidance for banks’ risk management frameworks. In its announcement, the OCC stated that it “expects all banks to have effective risk management processes commensurate with their size, complexity and risk of their activities,” suggesting that the OCC believes effective risk management should be tailored by individual banks rather than through generalized regulation.

The OCC’s decision to cease its involvement in the interagency principles is consistent with actions taken earlier this year by it and other federal agencies, including the Federal Reserve Board, the Federal Depository Insurance Corporation and the U.S. Treasury Department, which withdrew from the Network for Greening the Financial System, a global coalition focused on mobilizing green finance and developing climate-related risk management strategies for the financial sector.

Links:
Office of the Comptroller of the Currency
Principles for Climate-Related Financial Risk Management for Large Financial Institutions

EU: European Council Approves “Stop-the-Clock” Directive

On April 14, 2025, the European Council approved the European Commission’s proposal to delay the application of the EU Corporate Sustainability Reporting Directive (“CSRD”) and the Corporate Sustainability Due Diligence Directive (“CSDDD”) to certain companies.

The proposal, also known as the “Stop-the-clock” Directive, will:

• delay for two years the application of CSRD requirements for large private companies and listed SMEs, which were due to come into scope in 2025 and 2026, to 2027 and 2028, respectively;

• delay for one year the first phase of the application of CSDDD, from 2027 to 2028; and

• delay for one year the deadline for EU member states to implement CSDDD in national law, from 2026 to 2027.

The Directive was published in the EU’s Official Journal on April 16 and entered into force the following day. EU Member States are required to transpose the Directive into their national legislation by December 31, 2025.

Links:
”Stop-the-clock” Directive
European Commission Press Release
European Commission Q&A

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