Sustainability Trends: attitudes, regulation, litigation – implications and strategic considerations

In this briefing, we examine the key regulatory and enforcement trends that have emerged and the continued rise in litigation pressure. We assess the implications of these trends in different parts of the globe and the subsequent strategic considerations for businesses.

In recent months have witnessed significant shifts in policy on sustainability issues. Although this is not a new trend, recent political changes have accentuated diverging attitudes towards ESG, resulting in increasingly polarised perspectives on environmental, social, and governance (ESG) standards. This tension has had important consequences. On the one hand, it is driving – at least in part – new regulatory and enforcement trends, those where the regulatory push continues and those where counterforces have slowed or reversed the tide. On the other hand, it has created a heightened focus on litigation, as different stakeholders increasingly turn to courts to pursue policy goals.

Political shifts are driving significant changes to Sustainability regulation and enforcement priorities. Particularly in the U.S. and EU where key sustainability regulations have been revoked, changed, or delayed. In APAC, the trend is still towards regulation, although the extra-territorial effect of regulatory changes elsewhere is having an impact. Simultaneously, with the trend toward regulatory retrenchment in the US and to a lesser extent the EU, emphasis on litigation continues and is increasing. As positions have polarised, there has been an uptick in cases where anti/pro ESG motivations have been a factor, often challenging climate policies or corporate ESG commitments. There is now a broad array of sustainability related cases across a range of issues: including, climate cases against fossil fuels companies, and now others (agribusiness); Non-climate aligned cases, mostly in the US - Rising anti-ESG litigation (antitrust) as red state enforcement trends have gained traction; Litigation against financial institutions/asset managers and Greenwashing, seeking to hold companies to prior commitments These global trends mask significant regional differences, requiring litigation risk to be managed at a jurisdictional level.