Sustainable Energy & Infrastructure Litigation Updates — November 2025

Federal Regulation

On October 9, 2025, SEC Chairman Atkins delivered a speech in which he inveighed against “shareholder proposals focused on environmental and social issues.” According to Chairman Atkins, “these proposals consume a significant amount of management’s time and impose costs on the company” even though “they almost always receive even lower support than shareholder proposals do generally.” Chairman Atkins therefore expressed the view that it would be beneficial to limit these ESG proposals, and he identified a legal mechanism for doing so — i.e., that “a company [is not] actually required to include these [ESG] shareholder proposals in its proxy materials” because “there is no fundamental right under Delaware law for a company’s shareholders to vote on [ESG] proposals,” and those ESG proposals can thus be excluded. In effect, the SEC appears to be discouraging shareholder proposals focusing on ESG issues, thereby removing another mechanism by which individuals and organizations focused on ESG issues can seek to impact corporate behavior.

Civil Litigation

Following a bench trial, Judge O’Connor (N.D. Tex.) had held that there had been a breach of the fiduciary duty of loyalty concerning a 401(k) retirement plan’s investments, which had considered ESG interests rather than strictly financial considerations. However, nearly 10 months later, the court nonetheless “denie[d] Plaintiff’s request for monetary damages,” although the judgment did award certain equitable relief (e.g., injunctions related to future investing practices and governance). Notably, since the “Court conclude[d] that Plaintiff failed to sufficiently establish actual monetary losses to the Plan,” there were no “actual, compensable financial losses as a result of Defendants’ breach,” and so no monetary damages were awarded. The court further held that “monetary equitable relief ... is not supported by the trial record.” In other words, despite successfully litigating this case through trial, the plaintiff class — and their attorneys — will receive no money from their courtroom victory. This decision is highly significant, as the lack of a damages award means it is far less likely that there will be many future litigations centering around ESG-focused investing by pension plans, since plaintiffs’ firms now lack the financial incentive to do so. In other words, the plaintiff’s victory ultimately proved hollow — while a court upheld their legal theory that ESG-focused investing constituted a breach of fiduciary duty, such a breach is effectively meaningless in the absence of a major damages award that would incentivize additional litigation in the future.

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