Before we dive into what the Trump Administration is doing to eliminate or scale back many rules in the Environmental, Social and Governance (ESG) context, there is one thing to remember – some US states and other countries where large entities do cross-border business have their own ESG-related mandates that need to be considered.

Indeed, state attorneys general have been active in this space as well, including by asking Congress (via a letter) to support the Biden-era Inflation Reduction Act’s intention to diversity the country’s energy resources and reduce harmful pollution.

And commitment to “responsible business practices” (or “ESG” or “corporate responsibility”) remains strong, with 71% of survey respondents now agreeing ESG matters for corporate performance, up from 60% in 2023, according to data from Thomson Reuters Institute. And 82% believe the role of ESG in corporate performance will continue to grow. 

But all of this rests against the backdrop of the federal rollback of ESG mandates, so let’s dig into those initiatives.

EPA proposes repeal of GHG emissions standards

The Environmental Protection Agency’s (EPA’s) Administrator signed a proposed rule that would repeal the greenhouse gas (GHG) emissions standards established for fossil-fired power plants under the Biden administration’s Carbon Pollution Standards (CPS) and a 2015 GHG New Source Performance Standards rule.

The proposal includes a primary proposal that would repeal all GHG standards for fossil-fired power plants based on a finding that such emissions do not “contribute significantly” to endangerment of public health and welfare, and an alternative (narrower) proposal that would repeal a subset of the requirements under the CPS based on a technical review of those standards.

If finalized, either approach would significantly alter the federal regulatory landscape for GHG emissions produced by power plants. EPA estimates compliance cost savings of approximately $19 billion (3% discount rate) or $9.6 billion (7% discount rate) over the 2026–2047 period for both the full and partial repeal scenarios.

The EPA Administrator also signed a proposed rule that would repeal 2024 updates to the Mercury and Air Toxics Standards for power plants.

139 EPA employees put on leave for letter criticizing Trump

Earlier this month, the EPA confirmed it had placed 139 employees on administrative leave after they signed onto a letter criticizing the Trump administration’s policies as undermining the agency’s “mission of protecting human health and the environment.”

The employees are on leave pending an investigation, with the EPA saying the workers signed onto the letter using their official titles and EPA positions. An EPA spokesperson said in a statement to Law360 that the EPA “has a zero-tolerance policy for career bureaucrats unlawfully undermining, sabotaging, and undercutting the administration’s agenda as voted for by the great people of this country last November.”

The letter was signed by EPA employees across all offices, regions and labs “in our personal capacity, on our own time and without agency resources,” it states.

The “declaration of dissent” was sent to EPA Administrator Lee Zeldin and published and shared publicly by the advocacy group Stand Up For Science.

DuPont settles in New York State PFAS case

Last week, the members of a proposed class of hundreds of residents whose drinking water was tainted by “forever chemicals” told a New York federal judge that they’ve reached a $27m deal with E.I. du Pont de Nemours & Co, ending claims that it is responsible for the contamination, putting the total settlements at $92m.

Other corporate defendants in the suit, such as 3M Co and Honeywell International Inc, were dismissed from the case after reaching a $65m settlement in 2021.

SEC withdraws greenwashing rule

Last month, the SEC officially withdrew a proposed rulemaking undertaken by the Biden Administration that sought to combat greenwashing in ESG or similarly labeled funds.

Initially crafted by the SEC in 2022, the proposed “Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Governance Investment Practices” rule was designed by the Commission to address the lack of clear rules communicating the ESG attributes of an increasing number of funds marketing themselves using terms such as “green” or “sustainable.”

Basically, the SEC would have required funds to provide disclosures demonstrating that these funds actually conformed to their proclaimed ESG strategy.

The move is yet another in a line of climate-oriented regulatory rollbacks, including the mandatory climate disclosure rule promulgated by the SEC – a rule the Trump Administration is no longer defending in the courts.