Financial Services Blog

Welcome to the North America ESG Regulatory Newsletter! The goal of this newsletter is to inform practitioners about current and upcoming ESG regulations, and to provide other information helpful to navigating the rapidly evolving ESG regulatory landscape.

Trending Topics (in Collaboration with Fintech Studios, Inc.)

The scope of “Waters of the United States” (WOTUS), a term in the U.S. Environmental Protection Agency’s Clean Water Act (CWA) used to establish federal jurisdiction over “navigable waters” in the U.S., has had a tumultuous history. Recent updates to WOTUS under the CWA is a hot topic for federal and state regulators, as well as for the U.S. Supreme Court (see below).

North America Developments (Current & Upcoming)   


What’s happening? The EPA is finalizing technical revisions and clarifications for national emission standards for hazardous air pollutants of Municipal Solid Waste landfills established in a March 26, 2020 final rule.  The final rule took effect on February 14, 2022. 

Type: Final Rule 

Timing: Effective 2/14/2022 

Read more: Here  


What’s happening? The Employee Benefits Security Administration of the DOL issued a request for information (RFI) soliciting public input on how the DOL can protect the life savings and pensions of U.S. workers from harm related to climate risks.  The DOL also is developing a final rule encouraging retirement plan fiduciaries to use ESG factors in selecting investments. 

Type: RFI 

Timing: Announced 2/11/2022 

Read more: Here | or Here 


What’s happening?  A U.S. District Court in Louisiana issued a preliminary ruling against the Biden Administration’s estimates for the social cost of greenhouse gas emissions (GHG) based on global effects.  This metric has been used by federal agencies to justify regulations to curb GHG and to permit stronger requirements for energy producers and other climate-sensitive industries.  The Biden Administration is expected to appeal the federal district court’s ruling to a federal appeals court. 

Type: Preliminary ruling 

Timing: Issued 2/11/2022 

Read more: Here | or Here 


What’s happening? A report from the Center for American Progress lays out a roadmap for a new “Climate and Competition Agenda” for the CFTC.  The report outlines the top reforms that would make sure derivatives markets can facilitate the transition to a carbon-neutral economy; are capable of withstanding climate risks; and are competitive, transparent, and safe for all market participants under the CFTC’s jurisdiction. 

Type: Climate Agenda Roadmap 

Timing: Published 2/01/2022 

Read more: Here  


What’s happening?  The EPA and the Corps have continued work on a proposed rule to revise the definition of WOTUS under the CWA.  How WOTUS is defined may impact regulatory issues such as: (1) applicability of water quality standards; (2) total maximum daily loads; (3) dredge and fill permit requirements; (4) state / tribal water quality certification programs; and (5) National Pollutant Discharge Elimination System permit requirements.  

Current CWA litigation: On January 24, 2022, the U.S. Supreme Court granted certiorari in Michael Sackett v. EPA to determine if a federal appeals court used the right test to determine whether wetlands are subject to federal jurisdiction under the CWA. 

Type: Proposed rule 

Timing: Announced 12/07/2021; Litigation update 1/24/2022; Comment period closed 2/07/2022 

Read more: Here | or Here | Michael Sackett v. EPA Here 


What’s happening? NYS Comptroller, Thomas DiNapoli, and the NYS pension fund filed shareholder proposals seeking independent audits of several companies including Amazon, Chipotle, Dollar General, Dollar Tree, and Match Group’s practices related to racial equity.  The proposals are part of NYS’s effort to ensure companies address racial equity concerns in their operations and to hold them accountable if they fail to act. 

Type: Shareholder proposals 

Timing: Filed 1/19/2022 

Read more: Here 

Spotlight Topic Greenwashing

What is Greenwashing: Greenwashing involves a company conveying a false impression or misleading information to the public about the environmental impact of the company’s goals or products.  Most commonly, greenwashing occurs when a company makes a public statement promoting its sustainability efforts to appeal to customers, but then does not back-up these statements with real action. 

Regulatory Action: Multiple industries (e.g., cosmetics, fashion, finance, and oil & gas), as well as credit rating agencies, have recently faced criticism for greenwashing.  Regulators are publishing guidance and cracking down via litigation, along with shareholders and other private litigants. 

  • In January 2022, the Canadian Securities Administrators issued guidance clarifying expectations for ESG products with respect to fund names, investment objectives, investment strategies, and sales communications, etc. (Read more Here) 
  • In October 2021, NYS policymakers introduced the Fashion Sustainability and Social Accountability Act (sent to the U.S. Senate’s Consumer Protection Committee and to the NYS Assembly’s Consumer Affairs and Protection Committee in January 2022) requiring detailed environmental and social due diligence disclosures from retailers and manufacturers. (Read more Here | or Here) 
  • In March 2021, the U.S. Securities and Exchange Commission (SEC) created an ESG Task Force to investigate ESG-related violations, including greenwashing.  More recently, the Chair of the SEC’s ESG Task Force, Kelly Gibson, stated that increased enforcement actions for greenwashing will be a focus area in 2022. (Read more Here | or Here) 

Other Notable Developments:   

  • In March 2022, shareholders of the Royal Bank of Canada (RBC) will vote on strengthening RBC’s sustainable finance criteria as a response to previous sustainability-linked debt greenwashing concerns. (Read more Here) 
  • On February 8, 2022, BP, Chevron, ExxonMobil, and Shell appeared before the U.S. Congress to testify about their alleged role in climate change, while at the same time the companies spread disinformation about the climate impact of their products.  (Read more Here | or Here ) 
  • In December 2021, Shiseido and CoverGirl were sued regarding their cosmetics and the polyfluoroalkyl substances content in some of their products. (Read more Here | or Here) 

For questions or additional information on ESG regulations, including in North America, please contact Aaron Mendelsohn, George Dodd and Sarah Johnson 

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

Submit a Comment

Your email address will not be published. Required fields are marked *