You’re Sued If You Do and Sued If You Don’t: (Anti-)ESG Climate Litigation and Deregulatory Conflict in the EU and US

In both the United States and the European Union, ESG-related regulation and litigation are evolving rapidly, shaped by shifting regulatory ambitions, political backlash, and intensifying legal conflict. Despite facing similar pressures, the two jurisdictions are moving in markedly different directions. In the European Union, ESG regulation remains comparatively institutionalised, even as recent reforms seek to narrow its scope and reduce compliance burdens. In the United States, by contrast, ESG governance has become increasingly fragmented, politicised, and contested across federal, state legislatures, and within judicial arenas. The EU has developed a dense framework of binding sustainability rules—most notably the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Green Claims Directive—aimed at embedding ESG considerations into corporate governance, supply chains, and market conduct. These measures have catalysed a growing body of ESG-related litigation, particularly concerning climate risk, human rights, and greenwashing. At the same time, political and business pressure has prompted regulatory retrenchment, including efforts to refocus obligations on larger firms and simplify reporting requirements. In the United States, ESG governance is more openly conflictual. Federal initiatives such as the SEC’s climate disclosure rule have faced sustained legal and political resistance, while certain state-level governments have emerged as key sites of anti-ESG mobilisation. Over a dozen states have enacted legislation restricting ESG-based investment practices and initiated lawsuits against asset managers and pension funds. Parallel waves of pro- and anti-ESG litigation have followed, producing mixed judicial outcomes and increasingly sophisticated legal strategies on both sides. Across both jurisdictions, litigation now plays a dual and paradoxical role: it operates simultaneously as a mechanism for enforcing ESG commitments and as a tool for contesting, delaying, or dismantling them. Yet despite intensifying climate obstructionism, corporate and investor engagement with climate action persists, particularly at sub-national levels in the US and among major market actors in the EU. This paper analyses ESG climate litigation as a site of regulatory conflict and power struggle in a post-globalisation order. Through a comparative overview of EU and US developments, it shows how courts have become central arenas in broader political battles over market governance, corporate accountability, and the role of law in addressing climate risk. By mapping these dynamics, the paper contributes to debates on regulatory capitalism, legal contestation, and the reconfiguration of authority in contemporary political economies.