ESG Law Outlook 2026: As regulators sharpen enforcement powers and NGOs deploy increasingly sophisticated strategies, companies face rising exposure across green claims, human rights, fraud and emerging technologies.
Forward Law Review asked leading practitioners to examine how ESG litigation and enforcement risks are set to evolve globally in the coming year.
Here are their predictions for 2026.
Menaka Nayar, partner at Kirkland & Ellis, New York; and Julia Waterhous, partner in San Francisco:
For 2026, we expect many of the themes in sustainability-related litigation that we have seen through 2025 to continue.
In 2025, private litigants and regulators continued to pursue ‘greenwashing’ claims, (eg challenging allegedly misleading sustainability statements), with climate-related claims – such as ‘carbon neutral’ or ‘climate-smart’ claims and statements on climate goals or targets – facing particular scrutiny in the US and Europe. Certain US state attorneys general and private plaintiffs have also started challenging claims related to Scope 2 emissions and renewable energy usage.
Other areas of focus that will likely continue include litigation around circularity (e.g., recent claims against major plastics manufacturers and consumer brands for allegedly misleading recyclability-related statements) and forced labour in supply chains (with claims on consumer protection and other grounds advancing in the U.S. and Europe).
Finally, recent first-of-kind lawsuits in California point towards novel areas of focus such as alleged harms of artificial intelligence (including claims for wrongful death, assisted suicide, and negligence stemming from LLM usage) as well as health risks attributed to ultra-processed foods. With heightened scrutiny of sustainability-related claims continuing into 2026, careful substantiation of claims and forward-looking risk management with appropriate processes and controls in place will be increasingly important.
Christelle Coslin, partner and co-head of global business & human rights at Hogan Lovells, Paris; Mark Lin, partner, Hong Kong; and Hannah Piper, partner, London:
Global ESG litigation is entering a new phase of complexity and intensity. Climate liability and environmental rights cases are set to expand, often intersecting with greenwashing disputes. Activist strategies and judicial creativity are driving claims based on misleading statements, failure to meet climate commitments and breaches of due diligence obligations.
Courts and enforcement authorities in several jurisdictions have already blocked advertising campaigns and sanctioned misleading environmental claims under local laws and regulations, including consumer-protection laws. While energy companies are currently the primary targets, greenwashing claims are expected to accelerate across sectors, including aviation, retail and financial services.
Human rights litigation is gaining momentum worldwide with cases increasingly targeting corporate involvement in conflict zones and high-risk jurisdictions. In France for example, the Duty of Vigilance Law remains a powerful tool for NGOs pursuing actions over risks in global supply chains, while in England claims have been based on parent company liability.
Finally, anti-ESG litigation in the US will remain a countertrend, challenging corporate sustainability initiatives and ESG values. At EU level, there has been some regulatory slowdown but pro-ESG litigation is still advancing.
Overall, 2026 promises heightened scrutiny, cross-border exposure and a surge in strategic litigation shaping the ESG landscape globally.
Beth Riley, partner at McMillan, Calgary; and William Pellerin, partner, Ottawa:
In 2026, greenwashing remains a central ESG concern. Recent amendments to Canada’s Competition Act require businesses to substantiate environmental claims, introducing steep penalties and a private right of action. This has led to ‘greenhushing’, with companies scaling back public ESG commitments to avoid litigation risk.
The government plans further amendments to clarify standards and limit enforcement to consumer-facing marketing, aiming to reduce uncertainty. Regulatory scrutiny is expected to intensify, but enforcement will focus on transparency and substantiation. Companies must ensure rigorous internal compliance and evidence-based disclosures to mitigate legal and reputational risks.
ESG strategy in 2026 is increasingly intertwined with trade and sanctions compliance. Geopolitical tensions – such as conflicts in Ukraine and the Middle East – have heightened scrutiny of supply chain integrity and responsible investment.
Canadian companies face growing pressure to align trade practices with climate and social priorities while navigating evolving sanctions regimes. The expansion of Indigenous Loan Guarantee Programs and critical minerals strategies reflect a shift toward secure, ethical sourcing. Businesses must remain agile, balancing regulatory requirements and reputational resilience in a volatile global environment, where ESG-related trade and sanctions risks are more prominent than ever.
Joshua Domb, partner, Gen-R Law, London:
Look out for the UK Serious Fraud Office opening its first investigation for the new offence of Failure to Prevent Fraud, contained in the Economic Crime and Corporate Transparency Act 2023. I expect there is likely to be an environmental/sustainability nexus to the subject matter under investigation.
If there is, and some part of the alleged fraud involves misrepresentations directed at consumers, the investigation may be conducted in cooperation with the Competition and Market’s Authority, which is also looking to flex its new enforcement muscles for breaches of consumer protection law under the Digital Markets, Competition and Consumers Act 2024.
Finally, I will not be surprised if any such investigation is prompted by a report submitted to the SFO (or CMA) by an NGO – Stand.Earth’s greenwashing complaint concerning Lululemon to the Canadian competition authorities offers NGOs a powerful (and hugely cost-effective) playbook in that regard.
Ruth Knox, partner and chair of ESG & sustainable finance at Paul Hastings, London:
We are at the early stages of a sharp uptick in climate and social litigation, driven by an increasingly clear clash of ideals becoming embedded in different legal regimes. As governments and regulators pursue competing policy objectives, those tensions are now being tested in the courts.
This is already evident in human rights litigation in the US linked to climate risk and impacts, challenges arising from corporate diversity initiatives, and NGO actions against the European Union over the legislative process behind revisions to the Omnibus Regulation. Together, these cases point to a more contested ESG enforcement and litigation landscape.
Ariane Le Strat, senior associate at Bird & Bird, London
As the economy embraces the use of AI, data centres’ enormous energy and water usage has put tech companies under renewed scrutiny, at a time when the UK and EU are entering a new era of accountability for green claims.
No longer just a reputational risk, misleading sustainability claims are now a financial and legal hazard. Since April 2025, the UK CMA can fine companies up to 10% of global turnover for misleading environmental claims – giving a lot more power to regulators than they previously had. In the EU, the Empowering Consumers Directive is currently being implemented across the single market, and the EU Green Claims Directive is also on the horizon. Scrutiny is intensifying as courts and regulators are cracking down and NGOs are actively monitoring green claims.
Expect renewed enforcement, tighter standards, and early test cases. Marketing teams will need airtight substantiation for every claim. Lawyers and compliance teams will play a bigger role and can even leverage AI – for example, to scan marketing materials for risk before they go live.