In this week’s edition of Economy and Society:
- EPA repeals power plant carbon standards
- SEC asks court to enforce ISS subpoena
- EU truckmakers seek three-year emissions delay
- EU lawmakers advance sustainable finance disclosure changes
- BlackRock to liquidate two European ESG funds
In Washington, D.C.
EPA repeals power plant carbon standards
What’s the story?
The Environmental Protection Agency (EPA) on Sept. 14 repealed most Biden-era carbon emissions standards for coal- and gas-fired power plants and proposed eliminating remaining federal greenhouse gas requirements for the power sector.
EPA Administrator Lee Zeldin announced the actions during a meeting of G20 energy ministers in Houston. The Biden-era standards required certain coal-fired power plants and new natural gas plants to reduce their carbon dioxide emissions, including through carbon capture and storage technology. Carbon capture and storage involves capturing carbon dioxide before it enters the atmosphere and storing it underground.
The EPA said the proposed repeal of the remaining standards would save the power industry $370 million in compliance costs over 20 years. Zeldin said the changes would make it easier to build generating capacity as electricity demand increases. Zeldin said, "That means cutting red tape so we can build new power-generating infrastructure."
The agency also proposed rescinding remaining greenhouse gas requirements for power plants based on its position that the Clean Air Act does not authorize the EPA to regulate the power sector's greenhouse gas emissions. That proposal would affect the legal basis for future federal carbon regulations covering power plants.
Why does it matter?
The EPA's actions remove most federal carbon requirements from a sector that accounts for nearly one-quarter of U.S. greenhouse gas emissions and propose eliminating the remaining requirements. The Biden administration estimated its power plant standards would prevent one billion metric tons of greenhouse gas emissions through 2047 and produce $370 billion in net benefits.
The repeal reduces federal compliance requirements for power companies, but state emissions rules will remain in effect. National Mining Association President and CEO Rich Nolan said the repeal "corrects the egregious misuse of the Clean Air Act as a political tool to end American coal generation and implements the law as Congress intended."
Environmental groups opposed the changes and said they would increase greenhouse gas emissions and associated health and environmental costs. Center for Biological Diversity Climate Law Institute attorney Maggie Coulter said, "Denying the existence of a quarter of the country's climate pollution is utterly reckless. It will lead to more lost lives and suffering from intense heatwaves, drastic storms and destructive wildfires, just like those we've seen this summer."
What's the background?
The Biden administration adopted the power plant carbon standards in 2024. The Trump administration proposed repealing them in June 2025 as part of a broader reconsideration of federal regulations covering fossil-fuel power plants.
President Donald Trump (R) and the EPA separately rescinded the 2009 endangerment finding in February 2026. The finding had concluded that greenhouse gases threaten public health and welfare and provided the legal foundation for federal greenhouse gas regulations covering motor vehicles. The administration also repealed federal vehicle greenhouse gas standards tied to that finding.
A coalition of 25 state attorneys general and other state and local officials sued the EPA in March 2026 to challenge the rescission. The plaintiffs argue the EPA's action violates the Clean Air Act and conflicts with U.S. Supreme Court precedent. The case remains pending in the U.S. Court of Appeals for the D.C. Circuit.
The EPA based that February action on its interpretation that the Clean Air Act does not authorize the agency to regulate greenhouse gases based on global climate effects. The Sept. 14 power-sector proposal would further limit the agency's authority to regulate greenhouse gas emissions from power plants.
SEC asks court to enforce ISS subpoena
What’s the story?
The Securities and Exchange Commission (SEC) filed a court action Sept. 4 seeking to compel Institutional Shareholder Services (ISS), a proxy advisory firm, to comply with an administrative subpoena for information about its voting recommendations and clients' proxy votes.
The SEC filed the action in the U.S. District Court for the Eastern District of Pennsylvania. The agency said it began examining ISS, which is registered with the SEC as an investment adviser, in March 2026.
The SEC said registered investment advisers have a fiduciary duty under federal securities law to act in their clients' best interests. The agency is investigating, among other things, whether ISS's proxy voting advice is influenced by political or policy objectives in ways that could conflict with that duty. Proxy advisors provide institutional investors with research and recommendations on how to vote on matters such as director elections, executive compensation, and shareholder proposals.
According to the SEC's filing, ISS provided sample reports but declined to produce all of the client-level information the agency requested. The SEC opened an inquiry in July and issued an administrative subpoena on July 21. The agency is asking the court to order ISS to comply.
ISS objected in part on First Amendment grounds, arguing that disclosing confidential information about its clients' voting decisions could expose ISS and its clients to retaliation for protected speech. ISS also argued the requested client-level data is confidential and that disclosure could cause its clients competitive harm. According to the SEC's memorandum of law, ISS sent the agency a letter on Aug. 24, 2026 requesting confidential treatment for any documents it produced, and at one point proposed providing anonymized data instead. The SEC said anonymized data would not satisfy the subpoena.
An ISS representative said, "The SEC's current demand—that ISS disclose confidential and detailed information about how its clients have chosen to vote their or their clients' shares in corporate elections—raises serious First Amendment concerns. Complying would expose ISS and its clients to potential retaliation for their protected speech and voting decisions on matters of public importance."
The SEC rejected ISS's First Amendment objection in its filing, saying, "It is wholly appropriate for the SEC to look into whether ISS's investment advice to clients on proxy voting is driven by a particular political or policy aim to the detriment of its clients' interests."
The SEC said its investigation is continuing and that it has not concluded that ISS or any other person or entity violated federal securities laws.
Why does it matter?
The case centers on whether the SEC can enforce its subpoena for client-level voting information as part of its examination of ISS. The dispute also raises a First Amendment question over whether the agency's request improperly targets protected voting advice and decisions, as well as a separate question over the scope of confidentiality protections for proxy advisors' client data.
The federal dispute comes as ISS challenges state laws regulating proxy advice. On Sept. 4, ISS separately sued to block an Oklahoma law requiring additional financial analysis when proxy advisors recommend votes against company management. Federal judges have temporarily blocked related laws in Kansas, Indiana, and Texas while litigation continues.
What’s the background?
President Donald Trump (R) issued Executive Order 14366 in December 2025 targeting proxy advisory firms, including ISS and Glass Lewis. The order said the two firms control more than 90% of the proxy advisor market and criticized their support for some environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) policies.
The order directed the SEC chairman to review federal rules and guidance governing proxy advisors and shareholder proposals and to consider requiring greater transparency about proxy advisors' recommendations, methodologies, and conflicts of interest. It also directed SEC staff to examine whether registered investment advisers' use of proxy advisors for recommendations involving ESG or DEI considerations is consistent with their fiduciary duties.
The order separately directed the Federal Trade Commission to examine potential antitrust and consumer-protection issues involving proxy advisors. It directed the Department of Labor to review proxy advisors' role in voting shares for retirement plans governed by the Employee Retirement Income Security Act (ERISA).
Around the world
EU truckmakers seek three-year emissions delay
What’s the story?
European truck manufacturers have asked the European Union for a three-year delay in its 2030 carbon dioxide emissions target for new heavy-duty vehicles, moving the first compliance deadline to 2033.
The European Automobile Manufacturers’ Association (ACEA) said limited charging infrastructure, slow grid connections, energy costs, and low demand for zero-emission trucks make the current deadline difficult to meet. Chief executives from seven European truck and bus manufacturers backed the request.
EU rules require manufacturers to reduce the average carbon dioxide emissions of new heavy-duty vehicles by 45% in 2030 compared with 2019 levels. The required reduction increases to 65% in 2035 and 90% in 2040. Manufacturers that miss the targets face financial penalties.
ACEA said zero-emission trucks account for 2.4% of new heavy-duty truck registrations in Europe. Karin Rådström, president and CEO of Daimler Truck and chair of ACEA’s Commercial Vehicle Board, said, “We are fully committed to sustainable transport – the investments have been made, and a wide range of CO2-free vehicles is available today. But making them commercially viable at scale also depends on the wider ecosystem that is clearly delayed and not yet developing fast enough.”
Why does it matter?
The request could affect the pace of the EU’s effort to reduce emissions from commercial transportation. Manufacturers say meeting the targets depends not only on producing zero-emission trucks but also on fleet operators having sufficient charging infrastructure and an economic incentive to buy them.
Truckmakers are asking policymakers to accelerate charging infrastructure and grid connections and to use revenue from emissions trading to support zero-emission vehicle adoption. A three-year delay could give manufacturers and fleet operators more time to make the transition while reducing manufacturers’ near-term exposure to penalties. Keeping the existing deadline would maintain the current timetable for reducing emissions from new heavy-duty vehicles.
EU lawmakers advance sustainable finance disclosure changes
What’s the story?
A European Parliament committee voted Sept. 10 to advance changes to the European Union’s Sustainable Finance Disclosures Regulation (SFDR) that would create three categories for investment products making sustainability-related claims and reduce some disclosure requirements.
The Economic and Monetary Affairs Committee approved its negotiating position for talks with the Council of the European Union by a 37-9 vote, with four abstentions. SFDR requires financial firms to disclose sustainability information about investment products to help investors evaluate and compare them. The proposed changes would establish three categories:
- Sustainable: Products that contribute to ESG goals and meet high sustainability standards.
- Transition: Products investing in companies or projects moving toward ESG goals.
- ESG Basics: Products that incorporate ESG goals but do not meet the Sustainable or Transition criteria.
The proposal would also reduce some disclosure requirements. Only certain financial market participants would have to report their effects on the environment and society, professional investors would be exempt, and financial advice and portfolio management would fall outside the regulation’s scope.
Lead lawmaker Gerben-Jan Gerbrandy said, “The goal remains intact, but the means are far more effective for consumers and more efficient for businesses: more clarity on how sustainability can be claimed, and a lot less paperwork.”
Why does it matter?
If approved, the proposal would replace the existing framework with standardized categories intended to make sustainability-focused investment products easier for investors to compare and reduce the risk of greenwashing, or making misleading claims about an investment’s environmental characteristics.
The committee’s position also sets up negotiations between Parliament and the Council over how fossil fuel investments should be treated. EU member states adopted a negotiating position in June that would allow certain fossil fuel companies into the Transition category if they meet specified investment and emissions requirements. Parliament’s committee added the requirement that qualifying companies invest more in environmentally sustainable activities than in new fossil fuel projects.
The committee’s negotiating mandate is scheduled to be announced at the beginning of Parliament’s October I plenary session. Parliament and the Council of the European Union would then need to negotiate the final legislation before it can take effect.
On Wall Street and in the private sector
BlackRock to liquidate two European ESG funds
What’s the story?
BlackRock is liquidating two European sustainability-focused investment funds after both failed to attract enough investor assets to reach commercial scale, despite both funds outperforming their respective sector averages over the last three years.
The asset manager notified shareholders Aug. 24 that it would close its Luxembourg-domiciled Impact Bond Fund and European Sustainable Equity Fund. BlackRock launched the Impact Bond Fund in October 2022 to give investors exposure to an impact-focused fixed-income strategy. The fund held €84.7 million in assets at the end of July. For comparison, BlackRock managed €1.84 trillion in European fund assets as of June 2026, according to Morningstar.
BlackRock said, “After careful consideration, the directors… have concluded that the fund is unlikely to attract significant further subscriptions in the near future and believe that placing the fund into liquidation is in the best interests of shareholders.”
BlackRock launched the European Sustainable Equity Fund in June 2021. BlackRock cited a lack of client demand in deciding to close the fund, which held €8.25 million at the end of July.
Why does it matter?
The closures show that investment performance did not translate into sufficient investor demand for either sustainability-focused fund. The Impact Bond Fund returned 14.3% over three years, compared with an 11.1% average. The European Sustainable Equity Fund returned 36.6% over the same period, compared with a 15.8% sector average, and ranked in the top quartile of its category over three- and five-year periods.
A BlackRock representative said, “The firm continually reviews its fund range to ensure that the investment characteristics and positioning of our funds remain both relevant and consistent with the current investment environment and expectations of our clients.”