The Legal 500 Green Guide: United States 2024

United States 2024

Market overview

Welcome to the second edition of the United States Green Guide.

The US still falls far behind the EU when it comes to implementing hard climate change policies and emissions reductions measures. However, in August 2022, the US House of Representatives approved the landmark Inflation Reduction Act (IRA), expected to spur an estimated $370 billion in clean energy and climate investments over the next decade.

The Incoming climate-related Securities and Exchange Commission’s (SEC’s) rules will require many companies to disclose their climate-related risks. This will likely make numerous businesses vulnerable to the type of litigation we see more of in Europe, holding companies responsible for their climate impacts. The US Federal Trade Commission (FTC) also updated its Green Guides prompting increased stringency and transparency in company marketing when it comes to green claims. This too could lead to more legal cases against major polluters. These changes represent a shift away from the typical market and voluntary-led climate change efforts in the US and call for genuine and demonstrable actions. Law firms are playing a necessary role, educating clients and ensuring they are cautiously proactive when it comes to their ESG efforts.

ESG has become increasingly wrapped up in debates around ‘wokeness’ as part of the wider culture wars afflicting the US. This poses a threat to investors and has resulted in an uneven regulatory landscape across the country as state-level regulations are sometimes at odds with federal goals. Some states have instigated crackdowns on sustainable investing, passing laws to restrict the consideration of ESG factors in making financial decisions. In March 2023, President Biden used his first presidential veto, overriding a proposal by House Republicans to prevent pension fund managers from taking factors such as climate change into consideration when making investment decisions. Increasingly, law firms are forming designated ESG practices, in response to client demand, coordinating efforts to help navigate this tricky terrain.

As sustainability climbs up the global agenda, law firms must also understand their position as a part of their clients’ supply chains and expect greater scrutiny of their own green strategies and credentials. Compared to their European counterparts, US law firms fall behind. Some firms are starting to set net zero targets, and it is now more important than ever to have measurable goals to ensure claims are substantive.

We hope you find our second guide highlighting key firms engaging with sustainability in the US market useful and look forward to continually evolving our coverage as the market develops.