Key news in this edition:
- World Bank lifts ban on nuclear energy finance.
- SEC withdraws from proposed ESG disclosures.
- EU Green Claims Directive put on hold.
Editorial
At the midpoint of 2025, the direction of ESG policy looks less uniform than it did at the start of the year. This month’s updates show how regulation is still moving, but at a more uneven pace, and often under growing political and legal pressure.
The World Bank has lifted its ban on nuclear energy finance giving lower income countries more options for building energy systems not dependent on coal. This aligns the bank in line with other major lenders that now support nuclear as part of the energy transition. It also introduces more competition for Russian and Chinese-backed nuclear projects, particularly in Central Asia and sub-Saharan Africa. In the US, the SEC has dropped several ESG-related rule proposals, including plans to increase transparency in how investment funds describe their sustainability strategies. While the agency has stepped back from introducing new rules, it continues to investigate greenwashing and other ESG-related misreporting. In the EU, the Green Claims Directive has stalled after negotiations collapsed over how far the rules should go. We have seen a more assertive approach in France. A coalition of environmental groups has brought a greenwashing case against TotalEnergies, one of Europe’s largest energy firms. At the same time, the French Senate has passed a law targeting fast fashion, putting new limits on cheap and low quality clothing imports and their promotion.
World Bank lifts ban on nuclear energy finance
On 11 June 2025, the World Bank lifted its decades-long ban on financing nuclear energy projects. World Bank President Ajay Banga framed the move as part of a broader development strategy. In an internal announcement, he described electricity as “a fundamental human right and the foundation of development”, noting that demand is set to rise further as economies grow and digitalisation expands. He further added that the goal of the policy change is to provide the opportunity for countries to freely choose how to provide reliable energy to achieve developmental goals.
World Bank also announced that going forward it will cooperate with the International Atomic Energy Agency (IAEA). This aims to ensure appropriate safeguards, regulatory oversight, waste management and safety standards as the Bank engages in nuclear projects.
The change aligns with a global trend. Following COP28, over 25 countries pledged to triple nuclear capacity by 2050. Major lenders, including the European Investment Bank, Canada and now the World Bank, have begun to reconsider nuclear power’s role in low‑carbon development
So what?
The change opens the door for new nuclear power investments in lower-income countries, particularly in sub-Saharan Africa, where energy infrastructure remains underdeveloped. This change in policy will also provide an alternative to the state-financed nuclear energy options offered by Russia and China. The Russian nuclear energy agency Rosatom recently won a bid to build the first nuclear reactor in Uzbekistan, while Kyrgyzstan and Tajikistan are reportedly considering future cooperation with Rosatom.
[Contributor: Nickolas Bruetsch]
SEC withdraws from proposed ESG disclosures
In June 2025, the US Securities and Exchange Commission (SEC) announced it would withdraw several proposed rules first introduced in 2022 during the previous administration. Among them was a proposal that would have required enhanced ESG disclosures from investment funds. The rule aimed to reduce the risk of greenwashing and ensure that investors received consistent and comparable information. Specifically, it would have required funds to detail their ESG strategies in registration statements, annual reports, and adviser brochures.
Despite stepping back from these proposals, the SEC continues to monitor how asset managers integrate ESG factors. Fund managers remain responsible for aligning their investment practices, marketing claims, and fund disclosures. Moreover, over the past year SEC has brought several enforcement actions against investment advisers for alleged misrepresentations or failures to comply with regulations concerning thematic investment strategies, including those related to ESG.
The move reflects wider political tensions around ESG in the US. Investor demand for transparency remains strong; however, progress on new rules has slowed following criticism of excessive regulation.
So what?
This withdrawal reflects the SEC's broader shift away from prescriptive disclosure requirements, especially those proposed under the previous administration. However, the SEC is not eliminating its oversight of ESG-related matters. In fact, the SEC's recent enforcement actions indicate that its focus may be shifting toward under-disclosure of ESG matters or alignment with internal policies.
[Contributor: Haddie Hamal]
EU Green Claims Directive put on hold
The Green Claims Directive, designed to introduce clear, EU-wide rules requiring companies to back up green claims with scientific evidence and independent third-party verification. The directive was intended to complement the broader Empowering Consumers for the Green Transition (ECGT) Directive, by setting specific, enforceable standards for voluntary claims and labels.
Tensions escalated after the Council proposed expanding the directive’s scope to include micro-enterprises, which total 30 million across the EU. The European Commission objected, warning that the added burden would be politically unworkable and indicated it would consider withdrawing the proposal entirely if the amendment was not dropped. The Polish Presidency, which was leading talks on behalf of member states, responded by suspending negotiations. A few days later, Italy withdrew its support, and the Council formally cancelled the final negotiations scheduled for 23 June.
So what?
The Green Claims Directive is not officially withdrawn, but its future is uncertain. If the proposal is dropped, the EU will lose a central piece of its plan to harmonise environmental marketing standards. However, the ECGT Directive, which already bans vague or unverifiable claims and restricts the use of offsetting-based labels, remains in force and must be transposed by March 2026. In the meantime, companies will face a fragmented landscape of national rules in how they present environmental credentials.
[Contributor: Dominik Wilk]
French Senate adopts fast fashion bill
On 10 June, the French Senate adopted a bill that will regulate the fast fashion industry in France. The bill is aimed at mitigating the environmental and social impacts of fast fashion, which has become one of the world’s worst carbon-emitting industries, responsible for approximately ten percent of global greenhouse gas emissions. The bill targets major non-European e-commerce platforms, specifically Shein and Temu, and defines fast fashion producers according to production volume, frequency of collection turnover, product lifespans, and the business models that do not encourage repair, reuse or recycling of garments.
Key provisions of the bill include an environmental tax of up to EUR 5 per item, rising to EUR 10 by 2030, with a cap of 50 percent of the item’s original price. This tax will be based on an eco-scoring system, which will rate the environmental footprint of clothing items and assign the item tax accordingly. Importantly, the bill also imposes a ban on advertising for ultra-fast fashion brands, particularly through social media and influencer marketing. Fashion retailers will also be required to disclose environmental impact information for each item, including related carbon emissions and recyclability. The bill has already faced criticism, largely based on its exclusion of European brands such as Zara and H&M from the advertising ban and the highest levels of taxation, although these brands will also be required to disclose items’ environmental information.
So what?
This new law has been regarded as a pioneering step forward for sustainability in the European textiles industry, and could set a precedent for the introduction of similar regulations in other European states. The law re-affirms the growing importance of supply chain visibility, particularly for retailers subject to EU law, and mounting regulatory requirements for high-emitting industries to track the environmental impact of their products.
[Contributor: Emma Shewell]
Greenwashing claims brought to court in France against a major energy group
On 5 June 2025, TotalEnergies, a France-headquartered multinational energy group, appeared in a French court over ‘greenwashing’ allegations, raised by environmental advocacy organisations.
Through their legal claim submitted in March 2022, Greenpeace France, Friends of the Earth France, and Notre Affaire à Tous, targeted the TotalEnergies’ rebranding campaign, from Total to TotalEnergies, and the group’s associated public messaging, which they alleged misled the public on the scope of its climate commitments. The environmental groups claimed that TotalEnergies’ rebranding highlighted its investments in renewable energy and diverted attention from its oil and gas operations, even though fossil fuels accounted for over 97 percent of TotalEnergies’ total energy production according to an analysis by Greenpeace.
According to Financial Times reporting, in their response, TotalEnergies stated that the campaign and communications were designed to explain the group’s transformation and the increase in its production of renewable energy, and that they never claimed fossil fuels were good for the climate.
TotalEnergies’ 2025 Sustainability and Climate Progress Report indicates the group’s strategy includes drastically lowering the emissions of greenhouse gas from its operations, while also planning to grow its oil and gas production by around 3 percent per year over the next five years.
The French court is expected to deliver a judgment in October 2025.
So what?
The trend of bringing greenwashing claims against energy companies have been on the rise in recent years, particularly in Europe, in line with the EU Unfair Practises Directive. While many of these proceedings are ongoing, pending a judgment, the judiciaries across Europe will likely take a precautionary and balanced approach to the protection of consumers from ‘greenwashing’, acknowledging that the energy transition from fossil fuels to renewable sources is a long process owing to technical and financial reasons.
[Contributor: Elif Korca]
