In this week’s edition of Economy and Society:
- Supreme Court hears major climate liability case
- California requires large companies to disclose historical ties to slavery
- States sue EPA over power plant emissions rollback
- UK adopts final climate reporting rules
- Oil and gas investment category faces opposition in Canada
In Washington, D.C.
Supreme Court hears major climate liability case
What's the story?
The U.S. Supreme Court heard oral arguments on Oct. 5 in Suncor Energy v. Boulder County, a case concerning whether federal law prevents state and local governments from using state law to seek damages from oil companies for the effects of global greenhouse gas emissions.
According to the question presented, the justices are also considering whether the Supreme Court has jurisdiction to hear the companies' appeal at this stage of the litigation. The issue arises because the Colorado Supreme Court's decision came before trial, while the U.S. Supreme Court typically reviews state court cases after a final judgment.
Boulder County and the city of Boulder sued ExxonMobil and Suncor Energy under Colorado law, seeking compensation for local costs associated with climate change. The Colorado Supreme Court allowed the lawsuit to proceed. Exxon and Suncor appealed to the U.S. Supreme Court.
The companies argue that federal law preempts state-law claims seeking damages for the effects of interstate and international greenhouse gas emissions. The Trump administration also appeared before the Court in support of the companies' position. Boulder officials argue that their claims concern the companies' conduct and alleged misrepresentations about fossil fuels and can proceed under Colorado law.
Why does it matter?
Nearly 60 similar lawsuits are pending across the country in which state and local governments seek damages from oil and gas companies for alleged climate-related harms. The Supreme Court's eventual ruling could determine whether some of those lawsuits can proceed under state law.
The case also raises a federalism question about the boundary between state and federal authority over climate-related claims. A ruling could clarify whether states and local governments can use state tort law to seek compensation for harms they attribute to global greenhouse gas emissions or whether federal law prevents those claims.
What's the background?
Boulder County, the city of Boulder, and San Miguel County originally filed the lawsuit together in 2018, alleging that Exxon and Suncor contributed to climate change and misled the public about the risks associated with oil and gas. San Miguel County's claims were later severed into a separate case, now pending in Denver District Court. The case before the U.S. Supreme Court involves only Boulder County and the city of Boulder, who seek monetary damages for climate-related costs, including infrastructure and public health expenses.
The Colorado Supreme Court ruled in May 2025 that the lawsuit could proceed. Exxon and Suncor appealed, and on Feb. 23, 2026, the U.S. Supreme Court agreed to hear the case. The Court directed the parties to address both whether federal law preempts the Colorado claims and whether the Court has jurisdiction to hear the case.
Justice Samuel Alito recused himself from the case. The Court is expected to issue a decision by the end of its current term in June 2027.
In the states
California requires large companies to disclose historical ties to slavery
What's the story?
On Sept. 30, California Gov. Gavin Newsom (D) signed Assembly Bill 2599, the Truth in Disclosure Act, which requires certain large companies doing business in California to disclose historical ties to chattel slavery.
The law applies to companies with more than $100 million in annual worldwide gross receipts that existed, or had a predecessor company that existed, on or before Dec. 31, 1964. Covered companies must search historical records and submit sworn affidavits disclosing whether they or related or predecessor companies participated in or profited from slavery-related transactions, including the purchase, sale, insurance, or use of enslaved people as collateral.
The California Civil Rights Department will publish the disclosures on a public digital platform. The first filings are due Jan. 15, 2029.
The law also requires covered companies bidding on or renewing state contracts worth $100,000 or more to certify that they complied with the disclosure requirements.
Why does it matter?
California is the first state to require large corporations across industries to disclose historical ties to chattel slavery, including through their corporate predecessors. Previous state disclosure laws, including California's, have generally focused on slavery-era insurance policies.
The law could produce new public records documenting whether major corporations or their predecessors participated in or profited from historical slavery-related transactions. The disclosures could also inform California's ongoing debate over reparations, following recommendations from the state's Reparations Task Force.
What's the background?
Assemblymember Isaac Bryan (D) sponsored AB 2599. The measure expands on a California law enacted in 2000 requiring insurance companies to disclose records of policies the companies or their corporate predecessors issued to insure enslaved people.
Bryan introduced AB 2599 following recommendations from the California Reparations Task Force, which the state created in 2020 to study slavery and discrimination against Black Californians and recommend potential remedies. The task force issued its final report in 2023, and the California Legislature passed AB 2599 in August.
Insurance industry groups opposed AB 2599, arguing that the law could duplicate disclosures insurers already made under California's 2000 slavery-era insurance law. That law required insurers to investigate and report records of policies connected to enslaved people.
States sue EPA over power plant emissions rollback
What's the story?
On Oct. 1, a coalition of 21 states and the District of Columbia sued the U.S. Environmental Protection Agency (EPA) over its repeal of major greenhouse gas emissions requirements for fossil fuel-fired power plants. The coalition filed the lawsuit in the U.S. Court of Appeals for the D.C. Circuit.
New York Attorney General Letitia James (D) led the challenge, which also includes Pennsylvania Gov. Josh Shapiro (D) and the mayors of New York City and Chicago and the City and County of Denver. The plaintiffs are asking the court to vacate EPA's repeal and restore the previous emissions requirements.
EPA finalized the partial repeal on Sept. 14. The agency eliminated three main parts of the Biden administration's 2024 Carbon Pollution Standards, including emissions guidelines for existing fossil fuel-fired steam-generating units and carbon capture requirements for certain new natural gas-fired power plants.
The states argue that EPA violated the Clean Air Act when it repealed the requirements.
Why does it matter?
The lawsuit is the latest legal challenge between states and the federal government over the scope of EPA's authority to regulate greenhouse gas emissions from the power sector. The outcome could determine whether EPA must restore major portions of the 2024 standards governing emissions from coal, oil, and natural gas-fired power plants.
The dispute also comes as EPA seeks to eliminate the remaining federal greenhouse gas standards for power plants, including certain efficiency requirements for new and reconstructed natural gas turbines and modified steam-generating units.
What's the background?
The Biden administration finalized the Carbon Pollution Standards in April 2024 under Section 111 of the Clean Air Act. The standards established greenhouse gas emissions requirements for new natural gas-fired power plants and guidelines for states to limit emissions from existing fossil fuel-fired power plants.
On Sept. 14, 2026, EPA Administrator Lee Zeldin announced the partial repeal. The EPA estimated the repeal would save $310 billion across the economy from 2026 through 2047. The agency argues that the changes will reduce regulatory costs and support reliable and affordable electricity.
The states contend that EPA lacks a lawful basis for eliminating the 2024 requirements and are asking the D.C. Circuit to restore the repealed standards.
Around the world
UK adopts final climate reporting rules
What's the story?
The United Kingdom's Financial Conduct Authority (FCA), the country's financial markets regulator, finalized new sustainability reporting rules on Sept. 30 that will require listed companies to report under the UK Sustainability Reporting Standards (UK SRS) on a comply-or-explain basis.
Under the approach, companies must either make disclosures under the standards or explain why they have not done so. The FCA initially proposed requiring companies to make climate-related disclosures under UK SRS S2 while allowing other sustainability disclosures to operate on a comply-or-explain basis.
The FCA changed its approach following public consultation. Some respondents argued that mandatory climate reporting could impose disproportionate costs on smaller companies and produce information of limited value when climate and sustainability issues are not material to their businesses.
The rules will apply to accounting periods beginning Jan. 1, 2027, with companies making their first reports in 2028. Companies will receive one year of transitional relief for Scope 3 emissions disclosures and a two-year relief for broader sustainability disclosures under UK SRS S1.
Why does it matter?
The final rules move UK-listed companies to sustainability reporting standards aligned with the International Sustainability Standards Board (ISSB), replacing the country's existing climate disclosure rules based on the Task Force on Climate-related Financial Disclosures framework.
The FCA's decision also represents a shift from its original proposal to mandate climate disclosures. Sustainable investing groups supported the move toward internationally aligned standards but argued that the comply-or-explain approach could result in less complete and comparable climate information for investors.
What's the background?
The UK government finalized UK SRS earlier in 2026. The standards are the UK's version of the ISSB's international sustainability and climate disclosure standards, known as IFRS S1 and IFRS S2. The government initially made the standards voluntary while the FCA considered how they would apply to listed companies.
The FCA proposed new reporting rules in January that would have required climate disclosures under UK SRS S2 while initially applying a comply-or-explain approach to broader sustainability and Scope 3 emissions reporting. Following consultation, the FCA instead adopted comply-or-explain reporting across the entire UK SRS framework.
Oil and gas investment category faces opposition in Canada
What's the story?
According to a report from Business Future Pathways (BFP), about two-thirds of respondents opposed a proposal to include some oil and gas investments in the abatement category of Canada's sustainable finance taxonomy.
BFP is an independent initiative working with the Canadian Climate Institute to develop Canada's sustainable finance taxonomy. BFP conducted the consultation after releasing its draft methodology in July.
A sustainable finance taxonomy classifies economic activities according to whether they meet defined environmental or climate-related criteria. BFP proposed three categories: green, transition, and abatement measures. The proposed abatement category would cover investments that significantly reduce emissions from high-emitting activities expected to experience declining demand as the economy moves toward net-zero emissions, including upstream oil and gas production.
Why does it matter?
Canada would be the first major economy to include oil and gas-related activities in a sustainable investment taxonomy if BFP adopts the proposed category.
The taxonomy is intended to give investors and lenders common criteria for identifying green and transition investments. Participation is voluntary, but the classifications could influence which projects investors and financial institutions consider eligible for sustainable financing.
The consultation results could influence whether BFP includes the abatement category in its final methodology. BFP plans to use that methodology to develop criteria determining which activities qualify under the taxonomy.
What's the background?
The Canadian government announced funding in December 2025 to develop the country's sustainable finance taxonomy. The Canadian Climate Institute, in collaboration with BFP, is developing the framework.
BFP released its draft methodology on July 9 and accepted public comments through Aug. 13. BFP collected the feedback through a five-week public consultation open to individuals and organizations inside and outside Canada. Participants responded to a questionnaire about the draft taxonomy methodology.
Roughly two-thirds of public respondents opposed the abatement category, while about one-quarter expressed support conditional on strong safeguards. Opponents raised concerns that the category could extend the life of fossil fuel assets, create carbon lock-in or stranded-asset risks, and make Canada's taxonomy less compatible with taxonomies in other countries.
Respondents were considerably more supportive of the other proposed categories. More than three-quarters supported the overall approach to the green category, and more than two-thirds supported the transition category, although respondents called for clearer criteria and safeguards for determining which investments qualify.