United States

SEC Publishes Spring 2023 Regulatory Agenda

On June 13, 2023, Chair of the U.S. Securities and Exchange Commission (SEC) Gary Gensler announced the release of the SEC’s Spring 2023 Regulatory Agenda (the Regulatory Agenda), which outlines the SEC’s rulemaking priorities over the next 12 months. The Regulatory Agenda includes a total of 55 rules, with 18 rules at the proposed rulemaking stage and 37 rules at the final rulemaking stage. The SEC anticipates finalizing its proposed Climate Change Disclosure Rule in October 2023, proposing its enhanced Human Capital Management Disclosure Rule in October 2023 and proposing its Corporate Board Diversity Rule in April 2024. While the Regulatory Agenda provides insights into Chair Gensler’s priorities and the anticipated timing of proposed and final rules, actual rule adoption or proposal timing may vary significantly, and could come before or after the listed dates.

For additional details about the SEC’s Regulatory Agenda, see our blog post on Known Trends, Wilson Sonsini’s public company blog.

EPA Launches $400 Million Clean School Bus Program

The U.S. Environmental Protection Agency (the EPA) released a notice of funding opportunity for the EPA’s 2023 Clean School Bus Grant Program. The program allocates up to $400 million in federal funding under the Infrastructure Investments and Jobs Act (the IIJA) to accelerate community efforts to replace existing school bus fleets with clean and zero emission fleets. Prospective applicants have until August 22, 2023, to apply for the 2023 Clean School Bus Grant Program.

BOEM Issues Environmental Assessment for Proposed Gulf Offshore Wind Lease

On May 30, 2023, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (the BOEM) issued its final environmental assessment covering proposed offshore wind leasing activities in the Gulf of Mexico, clearing the way for BOEM to conduct an offshore wind lease sale in U.S. waters off the coast of Texas and Louisiana. If BOEM decides to conduct a lease sale, it will develop an Environmental Impact Statement for proposed projects, which identifies project-specific risks for the proposed lease sale.

Treasury and IRS Release Proposed Rules on the Low-Income Communities Bonus Credit

On May 31, 2023, the U.S. Department of the Treasury (the Treasury) and Internal Revenue Service (the IRS) released proposed regulations pertaining to the application and eligibility criteria for the low-income communities bonus credit investment program (the Program), which increases the amount of the Internal Revenue Code (the Code) Section 48 investment tax credit for certain small wind, solar, and energy storage technologies. The proposed regulations provide helpful guidance for applicants who invest in facilities containing such technologies and seek a 10 percent or 20 percent allocation (i.e., bonus credit) of “environmental justice solar and wind capacity limitation” from Treasury. As detailed in our client alert published on June 7, 2023, the Program provides for four “Categories” of capacity allocation: 1) facilities located in a low-income community (as defined by census tract data); 2) facilities located on Indian land; 3) facilities installed on a residential rental building participating in an affordable housing program; and 4) facilities whose “financial benefits” are provided to households with income of less than 200 percent of the poverty line relative to family size, or less than 80 percent of area median gross income. The IRS has requested comments on the proposed regulations by June 30, 2023.

Treasury, Department of Energy (the DOE), and IRS Release Guidance and Proposed Rules on Advanced Energy Project Tax Credits

On June 14, 2023, Treasury and the IRS released two notices of proposed rulemaking regarding the direct payment of certain energy tax credits under Section 6417 of the Code (the Direct Pay Regulations) and the transferability of certain energy tax credits under Section 6418 of the Code (the Transferability Regulations). These proposed rules will have a significant impact on existing and future tax credit transactions. The Direct Pay Regulations provide guidance on when and how “applicable entities” (generally, tax-exempt and governmental entities) can elect to receive the value of certain tax credits in the form of a cash payment even if that entity has no federal tax liability. Certain tax-exempt entities and governmental entities are eligible to receive direct pay for 11 energy tax credits; for-profit companies and other entities can receive direct payment of 3 energy tax credits—carbon sequestration, hydrogen production, and advanced manufacturing production. The Transferability Regulations provide guidance for “eligible taxpayers” to transfer (sell) certain tax credits for cash, which will enable new types of financing of renewable energy projects apart from the traditional tax equity partnership structure. The IRS has requested comments on the proposed regulations by August 14, 2023, with a hearing to be held on August 21, 2023.

Please see our client alert for additional information related to the HBER and related Guidelines.

Also, on May 31, 2023, the Treasury, DOE, and the IRS jointly released Notice 2023-44 (the Notice), providing guidance on the program under Code Section 48C(e)(1) to allocate $10 billion of tax credits for qualifying investments in eligible advanced energy projects. The Notice, which updates prior guidance (Notice 2023-18) pertaining to the Code Section 48C program, provides new technical review criteria and application requirements. The review criteria now include: 1) commercial viability of the project; 2) impact of the project on greenhouse gas emissions; 3) whether the project will strengthen U.S. supply chains and domestic manufacturing for a net zero economy; and 4) whether the project will produce workforce and community engagement. The Notice also sets forth the process for submitting project concept papers and joint applications for DOE recommendations and advanced energy project credit certifications. Concept papers must be submitted by noon on July 31, 2023. The IRS will make final decisions for Round 1 allocations by March 31, 2024. The Notice reiterates that projects placed in service prior to being awarded an advanced energy project certification are not eligible to receive an allocation.

DOE Releases Clean Hydrogen Plan

In June, the DOE released the U.S. National Clean Hydrogen Strategy and Roadmap. The roadmap, which was produced pursuant to the IIJA, represents the DOE’s plan to facilitate domestic clean hydrogen production, processing, delivery, storage, and use. The roadmap identified three core strategies to support the development of a domestic clean hydrogen industry: 1) target high-impact, difficult-to-electrify end-markets, such as steelmaking, aviation, and heavy-duty transportation; 2) reduce the cost of clean hydrogen; and 3) deploy regional clean hydrogen hubs, which offer the potential for cost savings through co-locating hydrogen production near its end-uses.

DOE Launches EV Charging Industry Consortium to Improve Charging Experience

The National Charging Experience Consortium (the ChargeX Consortium), a consortium organized by the DOE’s national laboratories and authorized by the IIJA, held its inaugural meeting on June 1, 2023. The ChargeX Consortium aims to bring electric vehicle charging industry stakeholders together to address charger reliability issues and improve the charging user experience by June 2025. Interested organizations may express an interest in joining at the ChargeX Consortium website.

DOT Releases Interoperability Standards for Publicly-Funded Chargers

On March 30, 2023, the Federal Highway Administration and the U.S. Department of Transportation promulgated the National Electric Vehicle Infrastructure Standards and Requirements, which apply to all chargers constructed under the National Electric Vehicle Infrastructure (NEVI) program, as well as to all projects for funds made available under Title 23, United States Code. Title 23 includes charging programs under the IIJA. The regulation included detailed interoperability standards governing charger-to-EV communication, charger-to-network-communication, and charging network-to-charging network communication. For example, chargers subject to the rule must, by February 28, 2024, be capable of Plug and Charge under the ISO 15118-2 standard. Additionally, charger communications with charger networks must comply with the Open Charge Point Protocol, and communications between charging networks must comply with the Open Charge Point Interface.

Europe

EU Launches the European Single Access Point for Corporate Financial and Sustainability Information

On May 23, 2023, the Council of the European Union (the Council) announced that provisional agreement has been reached to create the European Single Access Point (ESAP) as a part of the Capital Markets Union (the Action Plan). The ESAP would create a centralized access point for financial and sustainability-related information already made public by European companies and would impose no new disclosure obligations on European companies. The ESAP is expected to gradually phase in beginning in the summer of 2027.

EU Publishes New Sustainability Rules in Revised Horizontal Guidelines

On June 1, 2023, the European Commission (EC) adopted revised Horizontal Block Exemption Regulations (HBER) and related Guidelines to include new rules on agreements among companies on sustainability goals. The updated legislative package covers research and development and specialization agreements, and will be effective starting July 1, 2023, for a period of 12 years. The package provides guidance for businesses in evaluating the compliance of their cooperation agreements with EU competition law. The new guidelines clarify that antitrust rules are not intended to prohibit agreements among rivals that want to pursue sustainability goals under certain conditions. While it is a shift towards a more flexible approach to sustainability collaboration, especially compared to other jurisdictions such as the U.S., the EC remains cautious and does not significantly depart from its traditional approach to horizontal cooperation.

Please see our client alert for additional information related to the HBER and related Guidelines.

EU Publishes Q&A on the EU SFDR

On April 5, 2023, the European Commission (EC) published a Decision answering questions raised by European Supervisory Authorities (ESAs) regarding what is a “sustainable investment” for the purposes of the Sustainable Finance Disclosures Regulation (SFDR). Published in 2019, the SFDR sets out a mandatory disclosure regime on a wide range of ESG metrics and criteria, applicable to asset managers and other financial market participants. The recent guidance contains the third set of questions and answers (Q&As) by the EC, following two previous Q&As in decisions published in July 2021 and May 2022. The new Decision includes guidance on the boundaries of “Article 9” products (i.e., those with the highest sustainability ambitions and disclosure obligations) and what it means to have sustainable investment as their objective. The Decision also contains interpretation of sustainable investments, as defined in Article 2(17) of the SFDR.

European Parliament Adopts Negotiating Position on Corporate Sustainability Due Diligence Rules

On June 1, 2023, the European Parliament adopted its negotiating position on the Corporate Sustainability Due Diligence Directive (CSDDD), which will require companies to integrate human rights and environmental impact into their corporate governance frameworks. The CSDDD would mandate that companies report on how their business model affects their sustainability, and on how external sustainability factors (such as climate change or human rights issues) influence their activities. European lawmakers have also suggested imposing penalties of up to five percent of a company’s global turnover if they are found to have breached their CSDDD obligations. EU Member States, via the Council, will now begin negotiations on the final text before its adoption. The new rules will apply to EU-based companies meeting certain thresholds. Importantly, non-EU companies with a turnover higher than €150 million, if at least €40 million was generated in the EU, will also be covered by the CSDDD.

EU Seeks Feedback on New Sustainability Reporting Standards

On June 9, 2023, the EC published a draft of the first set of European Sustainability Reporting Standards (ESRS) for consultation. The annual sustainability reporting required under the EU’s Corporate Sustainability Reporting Directive (CSRD), which applies also to U.S. companies that meet certain thresholds, must be done in accordance with the ESRS. The draft encompasses 12 ESRS in total (two cross-cutting standards that provide guidance on how to prepare the sustainability report, and 10 topical standards on climate change, pollution, water and marine resources, biodiversity and ecosystems, circular economy, own workforce, workers in the value chain, affected communities, consumers and end-users, and business conduct). The draft appears to ease the burden of the CSRD, including through proposals to make certain disclosures voluntary.

The ESRS draft will be open for public consultation until July 7, 2023. The draft will then be revised as necessary, before being approved and adopted into EU law in the form of an EU Delegated Regulation (making it directly applicable in the EU Member States). Adoption is expected by the end of 2023. For more information on the CSRD, see our client alert.

EU Adopts New Rules to Hamper Deforestation Worldwide

On May 16, 2023, the Council gave its sign off to new rules aiming to address the risks of deforestation and forest degradation brought about by the placement or exportation of certain products from the EU market. The EU Deforestation Regulation (EUDR) will require companies that place and make available on, or export from, the EU market, cocoa, coffee, soy, palm oil, wood, rubber, cattle, and their derivatives to prove that the products are “deforestation-free” and that their production process complies with the relevant legislation of the country of production (e.g., land use rights or environmental protection laws). The new law was published in the EU’s Official Journal on June 9, 2023, and it will enter into force by the end of the month. Companies will then have 18 months to comply with the new obligations.

European Parliament Supports New EU Directive on Green Claims

On May 11, 2023, the European Parliament voted to support the proposed EU Directive on Green Claims (DGC), which aims to give EU consumers more certainty about labels such as “eco-friendly” and “green,” and seeks to ban generic claims. The DGC would only permit sustainability labels that are based on official certification schemes, established by public authorities, or registered as certification marks. Once the DGC is formally adopted following negotiations between the EU’s co-legislators (unlikely before 2024), Member States will have to transpose it into their national legal systems within 18 months from its coming into force, with the rules applying six months later.

European Commission Takes Further Steps to Boost Sustainable Investment

On June 13, 2023, the EC published a new sustainable finance package covering the EU Taxonomy and ESG ratings. The EU Taxonomy Regulation (in force since July 2020) sets out the world’s first “green list” of sustainable business activities and aims to provide investors and other stakeholders with a universal set of sustainability metrics. The EC adopted targeted amendments to the EU Taxonomy Climate Delegated Act, which includes a list of economic activities contributing to the environmental objectives of climate change mitigation and climate change adaptation. The EC also adopted, in the form of the Environmental Delegated Act, a new set of eligibility criteria for economic activities making a substantial contribution to four additional environmental objectives: 1) ensuring sustainable use of water and marine resources; 2) protecting and restoring biodiversity and ecosystems; 3) transitioning to a circular economy; and 4) preventing and controlling pollution. The EC suggested giving a “green” label to, among others, ecosystem restoration activities, the manufacture of plastic packaging under specific conditions, and the collection and transport of hazardous waste. The EU Taxonomy Delegated Acts are approved in principle and are expected to apply as of January 2024. The EC also issued a Staff Working Document on the usability of the EU Taxonomy and the wider EU sustainable finance framework, providing an overview of the key pillars and taking stock of the recently adopted measures.

Additionally, as part of its efforts to promote sustainable private investment in green projects, the EC proposed a Regulation on the Transparency and Integrity of Environmental, Social, and Governance (ESG) Rating Activities to improve the reliability of ESG rating activities, by, among other things, requiring ESG rating providers, who will need to be authorized and supervised by the European Securities and Markets Authority (ESMA), to split out their services from any other business that could create a conflict of interest, including consulting. The proposal will now be debated with the European Parliament and Council in the formal “trialogue” process before proceeding to adoption.

Japan

Japan Publishes Draft Policy to Address Gender Inequality at Companies

Earlier in June 2023, Japan’s Council for Gender Equality approved a plan published by the Gender Equality Bureau to require companies listed on the Prime Market Index of the Tokyo Stock Exchange to have at least 30 percent women directors by 2030. The plan, which asks the Tokyo Stock Exchange to revise its rules for listed companies, if implemented, would also require all companies listed on the Prime Market Index to have at least one woman on their board of directors by 2025.

Standards and Frameworks

World Economic Forum and the IFRS Foundation Announce the Formation of a “Best Practices” Sustainability Reporting Committee

On June 6, 2023, the World Economic Forum and International Financial Reporting Standards (IFRS) Foundation announced the formation of the Forum ISSB Preparers Group. Forum ISSB Preparers Group members will be 20 “corporate leaders with diverse expertise in sustainability reporting,” tasked with sharing insights and best practices from corporations that use the International Sustainability Standards Board’s (ISSB) new sustainability disclosure standards, the first of which were published on June 26, 2023.

SBTi Releases Draft Financial Sector Resources

On June 15, 2023, the Science Based Targets initiative (SBTi) announced the publication of consultation drafts of its Fossil Fuel Finance Position Paper, Financial Institutions Net-Zero Standard, Near-Term Financial Sector Science Based Targets Guidance, and Near-Term Criteria and Recommendations for Financial Institutions. SBTi is soliciting public comment and input until August 14, 2023, and is hosting online discussion sessions on July 6, 2023.

2023 Proxy Proposal Data

Between January 1, 2023, and June 15, 2023, 227 companies in the S&P 500 held annual meetings. Those companies received 594 Rule 14a-8 stockholder proposals, 103 proposals related to environmental issues, 259 proposals related to social issues, and 174 proposals related to corporate governance issues. During the same period in 2022, S&P 500 companies received 545 Rule 14a-8 stockholder proposals, of which 94 related to environmental issues, 223 related to social issues, and 188 related to corporate governance issues.

So far this year, stockholders have voted to approve one environmental, five social, and 13 governance proposals. Notably, in the environmental category, stockholders of Coterra Energy Inc. approved a proposal requesting that the company report on the reliability of its methane emissions disclosures. We will continue to monitor ESG-related Rule 14a-8 proposals this proxy season.

IEA Releases Report Showing Record $1.7 Investment in Clean Energy

The International Energy Agency, an intergovernmental organization focused on energy policy, released the World Energy Investment report. The report projects that global investment in clean energy technologies, such as renewable power, electricity grids, energy storage, and low-emissions fuels, will be $1.7 trillion in 2023, compared to approximately $1 trillion that will be invested in fossil fuel technologies in 2023, such as coal, natural gas, and oil.

FTC Requires Anchor Glass Container to End Use of Noncompetes

The Federal Trade Commission (FTC) finalized a consent order against Anchor Glass Container Corporation (Anchor Glass), which had been accused by the FTC of imposing noncompete clauses on its employees that constituted an unfair method of competition under Section 5 of the FTC Act. Under the consent order, Anchor Glass is enjoined from entering into or enforcing noncompete restrictions against certain employees.

As discussed in our May newsletter, the FTC has proposed a Non-Compete Clause Rule, which would ban employers from entering into noncompete clauses with their workers.

DOL Faces Challenge to New ESG Retirement Investment Rules

A Republican-led challenge to the U.S. Department of Labor’s (DOL) new ESG investment rules is nearing conclusion in the U.S. District Court for the Northern District of Texas. The new DOL rules allow “retirement plan fiduciaries [to] take into account the potential financial benefits of investing in companies committed to positive environmental, social and governance actions as they help plan participants make the most of their retirement benefits.” The plaintiffs in this case, attorneys general from 25 states, contend that the new DOL rules’ allowance for nonfinancial ESG considerations when making retirement plan investment decisions are in contradiction to the requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The plaintiffs are seeking to have the new DOL rules vacated and declared unlawful.

A second challenge to ESG retirement plan investing has been brought in the U.S. District Court for the Northern District of Texas. An American Airlines Group Inc. (American Airlines) pilot filed a class-action complaint against the airline, in which the plaintiff alleges that American Airlines breached its fiduciary duty, in violation of ERISA, by entrusting employees’ retirement savings to investment funds that pursue ESG strategies. Without commenting on the specific facts of this case, it reflects the current environment, the ongoing politicization of ESG-based investments, and the new challenges facing plan fiduciaries.

Delaware Court of Chancery Issues Decision Rejecting Books and Records Demand

On June 27, 2023, the Delaware Court of Chancery issued a decision rejecting a books and records demand by a longstanding stockholder of The Walt Disney Company (Disney) that was aimed at investigating alleged wrongdoing by the Disney board in overseeing Disney’s response to Governor DeSantis. The stockholder alleged that the Disney board had put its own personal beliefs ahead of the good of the corporation and stockholders and took positions that impaired the company’s value. The court rejected that argument on a number of grounds, including that the plaintiff had not shown any credible basis that the board engaged in wrongdoing. Among other things, the court noted that a board has significant discretion in guiding corporate strategy and policy for the good of the corporation and its stockholders, including when navigating social issues and competing views of stakeholders. Please watch for our forthcoming client alert on the decision.

U.S. Supreme Court Addresses the Limits of the Right to Strike

In an 8-1 opinion in Glacier Northwest, Inc., dba CalPortland v. International Brotherhood of Teamsters, Local Union 174, the U.S. Supreme Court addressed the question of whether an employer may sue its employees’ union under state law for damage incurred by the employer as a result of the union’s strike. The Court held that Glacier Northwest, Inc. may sue its employees’ union under Washington State’s tort law because the strike was arguably not protected by the National Labor Relations Act, which would preempt the application of state law, and remanded the case for further proceedings.

California Public Utilities Commission Sued over Net Metering Reductions

The Center for Biological Diversity, the Environmental Working Group, and the Protect Our Communities Foundation appealed the California Public Utilities Commission’s (CPUC) recent rollback of net metering incentives for residential solar. In the petition, which was filed in the California First District Court of Appeal, the appellants argued that the CPUC’s rollback violated requirements imposed on the CPUC by California law. The appellants have asked the California court to set the CPUC’s decision aside and remand it to the CPUC.

Airlines Face Lawsuits Related to Sustainability Marketing Claims

On May 30, 2023, a California consumer filed a class action suit against Delta Air Lines, Inc. (Delta), alleging that Delta’s claims of carbon neutrality, which stem from Delta’s purchase of carbon offsets in voluntary carbon markets, were false and misleading, in violation of multiple California consumer protection laws. In their brief, the plaintiff contends that Delta’s claims were misleading in part because the offsets purchased by Delta did not actually reduce emissions that would not otherwise have been reduced, a concept which is often referred to as additionality.

On June 7, 2023, the District Court of Amsterdam authorized a civil lawsuit accusing KLM Royal Dutch Airlines (KLM) of misleading its customers in relation to its sustainable practices, to move forward. Several environmental organizations, with the support of Client Earth, are claiming that KLM’s Fly Responsibly campaign violates the Dutch implementation of the EU’s Unfair Commercial Practices Directive for giving customers the idea that its flights will not negatively impact the climate. The claimants also submitted an expert evidence report concluding that the airline cannot validly claim that donating to reforestation schemes or KLM’s use of biofuels compensates for the impact flying has on the environment. The Dutch Court’s decision establishes for the first time that an environmental NGO can bring a greenwashing action under the recently passed Dutch class action law.

On June 22, 2023, the European Consumer Organization (BEUC) filed a complaint with the EC against 17 airlines (including Ryanair, Lufthansa, KLM, Air France, and Brussels Airlines) for allegedly making misleading claims about the sustainability of their businesses. BEUC has identified several practices that it alleges constitute greenwashing: 1) claims that the payment of extra credits can “offset,” “neutralize,” or “compensate” for CO2 emissions of a flight; 2) misleading affirmations to convince consumers to pay more for “sustainable aviation fuels”; or 3) suggesting that air travel can be “sustainable,” “responsible,” and “green.”

UK High Court Dismisses ClientEarth’s Lawsuit against Shell for Mismanagement of Climate Emergency Risks

As previously discussed in our March 2023 newsletter, ClientEarth filed a lawsuit in the United Kingdom (UK) against the board of directors of Shell PLC (Shell) for allegedly breaching their fiduciary duties by failing to implement a climate change risk management strategy and for unreasonably relying on carbon capture and offsetting to reduce emissions. On May 16, 2023, the UK’s High Court (the UK High Court) dismissed the lawsuit. The UK High Court wrote that it is up to the directors to determine how they prioritize their duties and also noted that ClientEarth held only a small stake in Shell, suggesting that the case was not motivated to promote Shell’s success. ClientEarth has announced that it will as the UK High Court to reconsider the decision.

Italian Fossil Fuel Company Eni Faces Climate Change Lawsuit

On May 9, 2023, 12 Italian citizens, along with Greenpeace Italy and ReCommon, filed a lawsuit in Rome against Eni S.p.A. (ENI), Italy’s largest multinational fossil fuel company. The lawsuit aims to hold ENI accountable for its contribution to climate change and seek damages for past and potential future impacts. The plaintiffs assert that ENI’s activities violated human rights, including the right to life and a healthy environment, and seek to establish a precedent that private energy companies like ENI are bound by the commitments of the Paris Agreement. The plaintiffs demand damages for affected communities and request that ENI adopts an industrial strategy to reduce its emissions by 45 percent by 2030 in line with the Paris Agreement.

Governments in the EU and U.S. Face Climate Change Lawsuits

In the EU, in late March 2023, the European Court of Human Rights (ECHR) held hearings for two climate change cases against Switzerland and France. In the first case, the “Club of Climate Seniors,” an association of elderly people in Switzerland, backed by Greenpeace Switzerland, accused the Swiss government of failing to protect their lives, homes, and families from the consequences of global warming. The second case was brought by a former mayor in France, who argued that the central government has not taken sufficient action to prevent climate change, thus increasing the risk of flooding in his home. While the ECHR acknowledged that the European Convention on Human Rights does not explicitly include a right to a healthy environment, it decided to hear the cases based on the potential harm to existing protected rights through exposure to environmental risks.

In the U.S., oral arguments in Held v. State of Montana were held over the course of June 2023. The plaintiffs in Held—16 Montana youth—allege that Montana violated Article II, Section 3 of the Montana Constitution, which guarantees Montana citizens “the right to a clean and healthful environment,” and Article IX, Section 1 of the Montana Constitution, which requires the “state [to] maintain and improve a clean and healthful environment in Montana for present and future generations” through its promotion of and support for fossil fuel extraction and burning. In their original complaint, the plaintiffs asked the court to declare certain of Montana's policies unconstitutional and require that Montana take action to remediate the impacts from the state's greenhouse gas emissions, among other prayers for relief.

House Overturns Heavy Duty Truck Rule

On May 23, 2023, the U.S. House of Representatives voted to overturn the Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards rule from the EPA. The rule created stricter emissions standards for heavy-duty vehicles. President Biden has expressed his intent to veto the reversal should the Senate also vote to overturn the final rule.

This rule is one in a series of new rules from the EPA regulating vehicle emissions. Please see our April 2023 newsletter information on other recently proposed rules.

President Biden Signs Debt Limit Bill, Which Includes Permitting Reform Measures

On June 2, 2023, President Biden signed the Fiscal Responsibility Act of 2023 (the Act) into law, thereby ending budget ceiling negotiations between President Biden, Democratic, and Republican lawmakers, and averting a U.S. debt default. As discussed in our April 2023 newsletter, there were several sustainability-related legislative proposals considered for inclusion in the Act, and the version signed into law includes a number of measures intended to reform and streamline the energy permitting process, including measures that imposed a one-year deadline for federal agencies to issue environmental assessments under the National Environmental Policy Act (NEPA) and a two-year deadline for federal agencies to issue environmental impact statements under NEPA.

Senator Heinrich Introduces a Pair of Transmission Reform Bills

Senator Martin Heinrich (D-NM), a Democratic member of the Senate Committee on Energy and Natural Resources, introduced a pair of transmission reform bills in the Senate. The first bill, the Grid Resiliency Tax Credit Act, would provide a 30 percent investment tax credit for new large-scale transmission lines and grid enhancing technologies. The second bill, the Facilitating America's Siting of Transmission and Electric Reliability (FASTER) Act, seeks to address bottlenecks in transmission siting, permitting, and construction. After introducing both bills in the Senate, Senator Heinrich referred the FASTER Act to the Senate Committee on Energy and Natural Resources and the Grid Resiliency Tax Credit Act to the Senate Committee on Finance.

House Financial Services Committee Holds Second Hearing on ESG Policies and Investing

On June 6, 2023, the Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs (the Subcommittee) held the second hearing, entitled ESG Part II: The Cascading Impacts of ESG Compliance, in a series of hearings Republicans have used to cast a negative light on corporate ESG policies. The first hearing, ESG Part I: An Examination of Environmental, Social, and Governance Practices with Attorneys General, was held on May 10, 2023. It is unclear whether there will be future hearings in the series because none are currently calendared. The Subcommittee is part of the House Financial Services Committee, which is also the home of the Republican ESG Working Group.

Wilson Sonsini to Participate in Panel Discussion on Renewable Energy Credits

On July 12, 2023, at 11 a.m. PT, the Center for Resource Solutions will host a panel discussion on the legal basis for the use of renewable energy credits in the U.S. Wilson Sonsini will be represented on the panel. Registration information can be found here.

Wilson Sonsini Advises On.Energy on $20 Million Financing

On June 13, 2023, On.Energy, a prominent end-to-end integrator of battery energy storage and an Independent Power Producer, announced it raised $20 million in equity financing in a Series B round led by Philadelphia-based investment firm Ultra Capital. New York-based venture capital firm Phalanx Investment Partners also participated in the round. Wilson Sonsini served as On.Energy’s counsel in the transaction. The Wilson Sonsini team that advised On.Energy on the transaction was led by Jason Slagle, James Newhouse, and Scott Zimmermann. Please see our client highlight for more information.

Clean Energy and Climate Solutions Federal Funding Database

Wilson Sonsini’s Energy and Climate Solutions group is pleased to share our Clean Energy and Climate Solutions Federal Funding Database, a digital resource listing current and prospective openings for federal funding applications issued across several government agencies, including (but not limited to) the DOE, EPA, U.S. Department of Agriculture, and DOT.

The database is seeded with opportunities funded by the Bipartisan Infrastructure Law of 2021 (BIL), the Inflation Reduction Act of 2022 (IRA), and other previously authorized statutes and appropriations bills. The database summarizes billions of dollars’ worth of grant, loan, and other non-dilutive awards from the federal government, as well as specific deadlines, opportunities to engage, eligibility requirements, and links to application information. These non-dilutive federal funding opportunities support a redundant and therefore stable capital stack, bring a host of reputational benefits, and allow enterprises to leverage federal systems and expertise.

For a general guide to understanding how this federal funding works at a high level, particularly for those with less background on these topics, please see our white paper, Federal Funding Opportunities for Scaling Climate Solutions.

If you would like to receive alerts when the Clean Energy and Climate Solutions Federal Funding Database is updated, you can subscribe here.