Speaking Sustainability

The U.S. District Court for the Western District of Texas entered a preliminary injunction against Texas Senate Bill 2337 (SB 2337) one day before the bill’s effective date. The bill would have regulated proxy advisory firms on their diversity, equity and inclusion (DEI)- and ESG-related investment recommendations and disclosures.

The California Air Resources Board (CARB) took a significant step forward recently in implementing the state’s climate disclosure laws: SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Disclosure law), in each case as amended by SB 219.

In the ongoing legal challenge to California’s climate-disclosure statutes (SB 253 and SB 261, discussed here by Akin), the U.S. District Court for the Central District of California recently issued an Order on August 13 that denied plaintiffs’ motion for a preliminary injunction. That motion was filed by the U.S. Chamber of Commerce and other business and farming groups arguing the statutes violated their First Amendment rights. The Court found that the plaintiffs were unlikely to succeed on the merits of their claims.

On August 13, 2025, the U.S. District Court for the Central District of California denied a motion for preliminary injunction filed by a coalition of business groups seeking to halt implementation of California’s corporate climate disclosure laws—SB 253 and SB 261. Senate Bill 253 (SB 253 )¹ requires entities that do business in California and whose total annual revenue exceeds $1 billion to disclose Scope 1 and 2 greenhouse gas (GHG) emissions beginning in 2026 (covering 2025 data), and Scope 3 emissions beginning in 2027 (covering 2026 data). Senate Bill 261 (SB 261),² passed as part of the same Climate Accountability legislative package, requires entities that do business in California and whose total annual revenue exceeds $500 million to publicly disclose the business’s climate-related financial risks and measures taken to reduce or adapt to that risk online every two years, beginning in 2026.³

Key Topics in Akin’s July 2025 Speaking Sustainability - Legal & Regulatory Update

The European Parliament and Council reached a provisional agreement (i.e., a post-consultation, non-binding political deal in relation to the final text of a legislative proposal) to streamline the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) on June 18, 2025. This is a key instrument to prevent carbon leakage and align trade policy with the EU’s climate goals. The changes are part of the EU’s broader sustainability legislative simplification package announced earlier this year. This proposal is intended to ease compliance burdens while maintaining the environmental integrity of the CBAM framework.

Wind energy projects along the coasts are facing uncertainty due to President Trump’s Presidential Memorandum¹ issued on January 20, “Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects.” This Memorandum introduces substantial policy changes that impact both onshore and offshore wind development.

The Biden administration has issued a Joint Statement of Policy and New Principles for Responsible Participation in Voluntary Carbon Markets (VCMs) outlining the U.S. government’s strategy to promote high-integrity VCMs. The U.S. Department of the Treasury and Internal Revenue Service (IRS) have released proposed guidance on the Clean Electricity Production Credit and Clean Electricity Investment Credit, aiming to provide clarity to developers of clean electricity projects. Finally, the Biden administration launched the Federal-State Modern Grid Deployment Initiative to unite states, federal bodies and industry stakeholders to expedite grid modernization efforts to tackle the challenges and opportunities posed in the 21st century.

The Senate Energy and Natural Resources Committee held a hearing on Demand for Electric Power in the U.S., highlighting the growing challenges and opportunities related to artificial intelligence (AI), data centers, semiconductor manufacturing and energy. The leading utility trade association, Edison Electric Institute, is suing the Biden administration over its recent ruling mandating fossil fuel power plants to utilize carbon capture and storage. The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have issued further instructions regarding the domestic content bonus of the Inflation Reduction Act (IRA) to support American workers and businesses in their efforts to advance the clean energy economy.