We are pleased to provide you with Gibson Dunn’s ESG Risk, Litigation, and Reporting update covering the following key developments during November 2025. Please click on the links below for further details.~~I. GLOBAL~~From November 10 to November 21, 2025, nearly 200 countries participated in the United Nation’s (UN) 30th annual climate meeting, COP30 held in Belém, Brazil. For the first time since its convening in 1995, the United States was absent from the COP. Leaders from each country in attendance agreed on a few notable climate action initiatives, such as the Mutirão Decision and the Gender Action Plan, as reflected in the final outcomes report. The Mutirão Decision addresses financing and investment in climate-based initiatives, including calling for the tripling of adaptation finance by 2030 compared to 2025 levels. Two key provisions of this decision are the Global Implementation Accelerator, which aims to help countries implement adaptation plans, and the Belém Mission to 1.5, which is a platform designed to “foster enhanced ambition and international cooperation across mitigation, adaptation, and investment.” The Mutirão Decision also addresses the role of trade in climate action by calling for a dialogue with the World Trade Organisation, United Nations Trade and Development, and International Trade Centre to consider the “opportunities, challenges and barriers in relation to enhancing international cooperation related to the role of trade.” The Gender Action Plan contains provisions meant to address the ways in which climate change, as the UN Women organization states, “is not gender neutral.” This document aims to serve as a tool for governments, policymakers, and private parties that provide climate finance and anticipates that these parties will consider the unique risks women and girls experience from climate change and advance “gender-responsive climate policies,” including in the following areas: capacity-building and knowledge sharing, participation and leadership, implementation, and monitoring and reporting. Notably, criticism of COP30 was that while discussed, no agreement on the transition away from fossil fuels or halting of deforestation was adopted in the final text.~~On November 25, 2025, ISS published its 2026 U.S. Benchmark Policy Changes, which are effective for meetings on or after February 1, 2026. ISS made several changes related to executive compensation, non-employee director compensation, capital structures, and environmental and social shareholder proposals, among others. In particular, ISS’s U.S. policy updates include a change in approach to shareholder proposals: rather than generally recommending votes “for” certain environmental and social shareholder proposals, ISS will now make recommendations on a case-by-case basis. This change applies to proposals requesting disclosure of climate change-related risks; greenhouse gas emissions; diversity policies, initiatives, or workforce data; supplier or human rights policies; and political contributions and trade association policies and activities. The 2026 updates also make certain changes to the factors that ISS will consider when determining its voting recommendations for these proposals. As rationale for these changes, ISS cited feedback from clients, declining shareholder support, the changing regulatory landscape, changes in company practices, and improvement in company disclosures in the past few years. ISS’s global approach to these proposals has been and continues to be to generally recommend votes on a case-by-case basis considering a variety of factors focusing on whether “implementation of the proposal is likely to enhance or protect shareholder value.”~~Glass Lewis recently published its 2026 Benchmark Policy Guidelines (GL 2026 Guidelines). The GL 2026 Guidelines include updates regarding pay-for-performance methodology, mandatory arbitration provisions in governing documents, amendments to a company’s governing documents, and shareholder proposals. With regard to shareholder proposals specifically, the GL 2026 Guidelines removed language indicating that Glass Lewis may “in certain very limited circumstances” recommend votes against members of a company’s governance committee if Glass Lewis believes that the company has omitted a shareholder proposal via the Rule 14a-8 no-action request process in such a way that exclusion “is detrimental to shareholders.” Instead, the GL 2026 Guidelines refer to recent changes in the U.S. Securities and Exchange Commission’s (SEC) changed approach to shareholder proposals and note that Glass Lewis is monitoring the “SEC’s ongoing changes and their ramifications” and may update its voting guidelines “prior to or during the 2026 proxy season should its approach to these matters change or regulatory developments warrant such an update,” while noting that the “basic premise” of Glass Lewis’s policy is that “shareholders should be afforded the opportunity to vote on matters of material importance.” The GL 2026 Guidelines also removed discussion related to oversight of environmental and social issues, including language that indicated Glass Lewis would recommend votes against members of the board, in favor of shareholder proposals, and/or against management proposals if companies “have not provided for explicit, board-level oversight of environmental and social matters and/or when a substantial environmental or social risk has been ignored or inadequately addressed.”~~The GL 2026 Guidelines have retained Glass Lewis’s policy regarding board diversity, including a reference to its March 2025 “Supplemental Statement on Diversity Considerations at U.S. Companies.” As described in our March 2025 ESG Update, while Glass Lewis’s policy expects diversity on companies’ boards (generally expecting 30% gender diversity and at least one director from an underrepresented community) and disclosure of individual or aggregate demographic information for directors, when recommending votes against a director related to diversity, Glass Lewis will offer clients two recommendations: “one that applies [the] Benchmark Policy approach as articulated in [the] 2025 Benchmark Policy Guidelines for the US Market, and one that does not consider gender or underrepresented community diversity as part of the recommendation.” However, this approach may evolve in light of the Executive Order discussed below.~~For more information, see our client alert.~~II. UNITED KINGDOM~~On November 3, 2025, the Transition Finance Council published new drafts of (i) the Transition Finance Guidelines (Guidelines); and (ii) the Implementation Handbook. It also published a Consultation Question and Update and launched a corresponding second public consultation on the drafts. This follows a first consultation that closed last September, as a result of which the drafts were updated to revise the universal factors so they are more streamlined and better capable of assessment, map the guidelines to the Net Zero Investment Framework, and clarify the relationship between entity-level transition finance consistent with the Guidelines and green and sustainability-linked bonds and loans, amongst others. The consultation is open until January 30, 2026 and welcomes feedback from a range of stakeholders, including corporate entities and asset owners and managers.~~On November 3, 2025, the UK Government published the Producer Responsibility Obligations (Packaging and Packaging Waste) (Amendment) Regulations 2025 (Amended pEPR Regulations). The pEPR Regulations require businesses that supply packaging or packaged goods to cover the costs of managing household packaging waste and providing disposal information, intended to ensure that a portion of packaging is recycled and verified. The Amended pEPR Regulations will enable the appointment of a producer responsibility organisation (PRO) to take on key operational functions, allow producers to offset food-grade plastic packaging waste against their disposal cost obligations in certain circumstances, and aim to remove loopholes and improve clarity. Such amendments are due to come into force on January 1, 2026.~~Other highlights:~~III. EUROPE~~Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD): After trilogue negotiations began on November 18, 2025, the European Parliament and the Council of the EU have now reached a political agreement on key elements of the Omnibus Simplification Package. The Council and the European Parliament have already confirmed the compromise. The final text still needs to be approved by the Council of the EU and will enter into force twenty days after its publication in the Official Journal. For further details please see our client alert.~~Meanwhile, the European Commission’s “quick fix” Delegated Regulation (EU) 2025/1416 was published, providing transitional relief for Wave 1 companies. The regulation postpones certain ESRS disclosure requirements for the 2025 and 2026 financial years and extends phase-in provisions for complex topical standards such as biodiversity and social disclosures. This will allow Wave 1 companies to refrain from expanding their sustainability disclosures while the Omnibus Simplification Package is still under negotiations.~~ESRS: On December 3, 2025, the European Financial Reporting Advisory Group (EFRAG) submitted its final technical advice on its draft of simplified ESRS to the European Commission, building on the Exposure Draft published on July 31, 2025 and the EFRAG Sustainability Reporting Board’s internal vote in late November 2025. The new ESRS aim to, among other things, simplify the materiality assessment, provide a stronger emphasis on usefulness of information, significantly reduce data points, and increase interoperability with the International Sustainability Standards Board. For further details, please see our latest client alert on this topic.~~The European Commission indicated that it intends to review the draft and prepare its delegated act revising the original ESRS in the first half of 2026, with the applicability date of the new ESRS to be confirmed in the delegated act. The introductory wording in Delegated Regulation (EU) 2025/1416 seems to suggest that the revised standards will only start to apply for the reporting period of financial year 2027.~~Following a provisional political agreement between the Council of the EU and the European Parliament on December 4, 2025, the European Parliament adopted the agreed upon amendments on December 17, 2025, which include, among other things, the following:~~Next, the text must be endorsed by the Council and published in the Official Journal of the EU. For the amendments to enter into force as intended, the final text must be published before the end of 2025. If not, the current EUDR deadlines will continue to apply.~~In this context, a recent joint industry letter should also be noted, which expressed concerns about reopening or delaying the EUDR, emphasizing that many companies have already invested substantially in compliance preparation and warning that a postponement could undermine regulatory certainty and the EUDR’s environmental objectives.~~In line with a recent decision from the German Federal Court of Justice, the Regional Court Berlin similarly held in a decision dated October 16, 2025 that a company’s climate neutral claims were misleading, as they were lacking disclosure of the extent of reductions and offsetting. Simply referring to offsetting measures was considered insufficient. Further, the court held that it is necessary that companies communicate about the scope, nature, and effect of their reduction measures. The ruling is not binding yet.~~On November 20, 2025, the European Commission released its proposal to amend the SFDR. The proposal aims to improve the identification and analysis of sustainability-focused investment products after a comprehensive review of the SFDR by the European Commission showed that, among other things, the current framework produces overly long and complex disclosures and increases the risks of greenwashing and mis-selling.~~To address these issues, the proposal introduces three new categories for funds based on their sustainability or transition characteristics: Sustainable, Transition, or ESG Basic. The new categories are defined by the industries and activities a financial product must exclude from its portfolio and by its positive contribution, with at least 70% of the portfolio required to follow an ESG strategy aligned with the product’s category. Furthermore, the European Commission plans to reduce disclosure obligations for financial market participants, particularly streamlining product-level disclosures, by focusing on available, comparable, and meaningful data tied to the new fund categories.~~Other highlights:~~IV. NORTH AMERICA~~On December 11, 2025, President Trump signed an Executive Order directing the SEC, Federal Trade Commission, and Department of Labor to take various actions “to end the outsized influence of proxy advisors that prioritize radical political agendas over investor returns.” The Executive Order specifically calls out ISS and Glass Lewis and alleges that that they “control more than 90 percent of the proxy advisor market.” While having no immediate impact on ISS and Glass Lewis, the Executive Order heightens the regulatory scrutiny of and pressure on proxy advisory firms’ practices and on the actions of their clients. For more information, see our client alert.~~On November 12, 2025, media reports indicated that the Federal Trade Commission has opened a civil antitrust investigation into ISS and Glass Lewis, focusing on whether the firms’ practices constitute unfair methods of competition and how their recommendations impact shareholder votes, including on environmental and social shareholder proposals. The investigation reportedly examines the firms’ market position and competitive conduct in providing research, analysis, and voting advice to institutional investors.~~On November 20, 2025, Florida Attorney General James Uthmeier filed a complaint against ISS and Glass Lewis, alleging violations of state consumer protection and antitrust laws. According to the filing, the two firms “constitut[e] up to 97 percent of the market for proxy voting advice,” giving them “an astronomical impact on the American economy and corporate culture.” The complaint asserts that ISS and Glass Lewis have “used this enormous influence to push their own dogmatic agenda” and “controversial ideological mandates” rather than prioritize shareholder value. The filing also alleges coordinated conduct between ISS and Glass Lewis, asserting that the firms “agreed to move in lockstep, preventing competition and ensuring that neither will face competitive pressure.” The Attorney General seeks injunctive relief, damages, civil penalties, and other relief.~~On November 21, 2025, SEC Commissioner Mark T. Uyeda delivered remarks at the U.S.–Japan Symposium organized by Harvard Law School’s Program on International Financial Systems. He stressed that sustainability or ESG-related disclosures should be required only when they are “financially material,” stating that non-financial policy metrics such as environmental policy issues should be reserved for environmental regulators, not financial regulators. Commissioner Uyeda reiterated that under the current U.S. disclosure framework, issuers must report climate or sustainability information only if it materially affects their business, financial condition, or operating results. He cautioned that imposing broader ESG mandates on corporate disclosure or stewardship regimes risks turning disclosure obligations into instruments for advancing “policy aspirations” and that doing so could blur the line between investor-relevant information and broader regulatory or political goals. The Commissioner’s remarks are consistent with prior comments, including those summarized in our May 2025 update.~~Various federal agencies have continued to advance deregulatory actions, including the following:~~Other highlights:~~In case you missed it…~~V. APAC~~From November 24, 2025, Taiwan’s sustainable bond regime fully incorporates blue and biodiversity bonds under its green bond framework, aligning with the 2025 ICMA Green Bond Principles. Eligible categories include marine conservation, biodiversity protection, water resource conservation, waste recycling or reuse, development of renewable energy and energy technology, and other climate change adaptation projects or projects approved by the Taipei Exchange (TPEx), with several successful issuances already in the market. TPEx is actively encouraging issuers to explore these instruments as demand for nature-linked financing grows ahead of COP30 in Brazil.~~On November 11, 2025, the Hong Kong Special Administrative Region (HKSAR) Government announced that it successfully priced its third batch of digital green bonds (HKD, RMB, USD, and EUR) under the Government Sustainable Bond Program, raising around HKD 10 billion (~USD $1.28 million), marking the world’s largest digital bond offering to date and the first digital bond offering that integrates tokenized central bank money (e‑HKD and e‑CNY) as a settlement option. The four tranches were priced on November 10 as follows: HKD2.5 billion (2-year, 2.5%), RMB2.5 billion (5-year, 1.9%), USD $300 million (3-year, 3.633%), and EUR300 million (4-year, 2.512%). The subscriptions across four currency tranches exceeded HKD130 billion from a broad base of global institutional investors. Proceeds will be used to finance or refinance projects under the HKSAR Government’s Green Bond Framework, reinforcing Hong Kong’s strategy to scale green and sustainable finance and position itself as a leading digital assets hub.~~On November 6, 2025, the ASEAN Capital Markets Forum (ACMF), a high-level grouping of capital markets regulators from 11 ASEAN jurisdictions, introduced several key ESG-related initiatives, including an updated version of the ASEAN Simplified ESG Disclosure Guide for Small and Medium Enterprises, which has been refined to provide guidance to SMEs in preparing ESG disclosures, a roadmap for the development of interoperable, high-integrity carbon credit markets in the region, and an updated version of the ASEAN Taxonomy for Sustainable Finance, which serves as a reference point to guide capital and funding toward activities that help promote sustainability in the region.~~Other highlights:~~The following Gibson Dunn lawyers prepared this update: Lauren Assaf-Holmes, Carla Baum, Nyala Carbado*, Becky Chung, Mellissa Campbell Duru, Ferdinand Fromholzer, Julia Lapitskaya, Vanessa Ludwig, Leo Métais*, Babette Milz, Johannes Reul, Meghan Sherley, Nicholas Tok, Maggie Valachovic, and Mason Ye*.~~ESG: Risk, Litigation, and Reporting Leaders and Members:
Susy Bullock – London (+44 20 7071 4283, sbullock@gibsondunn.com)
Perlette M. Jura – Los Angeles (+1 213.229.7121, pjura@gibsondunn.com)
Ronald Kirk – Dallas (+1 214.698.3295, rkirk@gibsondunn.com)
Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com)
Michael K. Murphy – Washington, D.C. (+1 202.955.8238, mmurphy@gibsondunn.com)
Robert Spano – London/Paris (+33 1 56 43 13 00, rspano@gibsondunn.com)~~*Nyala Carbado and Mason Ye, recent law graduates in Los Angeles and Orange County respectively, and Leo Métais, a trainee solicitor in London, are not yet admitted to practice law.~~© 2025 Gibson, Dunn & Crutcher LLP. All rights reserved. For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~
Dec 17
Deal Summary
