Economy and Society: March 11, 2026
In this week’s edition of Economy and Society:
- London Stock Exchange Group launches new ESG scores
- China sets lower carbon targets while expanding clean energy
- South Korea proposes phased ESG reporting beginning in 2028
- ESG legislation update
- Shareholder lawsuits rise after SEC proxy guidance suspension
- New lawsuit argues retirement plan ignored climate risk
Around the world
London Stock Exchange Group launches new ESG scores
What’s the story?
On March 9, 2026, The London Stock Exchange Group (LSEG) announced that it launched LSEG Sustainability Ratings and Data, a new suite of environmental, social, and governance (ESG) scores and sustainability analytics to help investors evaluate how companies manage material risks and opportunities. The company said the system is designed to support investment decisions, benchmarking, and corporate engagement by providing standardized sustainability data across markets.
Elena Philipova, LSEG’s director of sustainability solutions said, "By uniting 25 years of sustainable finance expertise, with datasets trusted by the global financial industry, we’re giving financial institutions the clarity and confidence to meet regulatory expectations, support transition-aligned capital allocations and build AI-ready ESG workflows.”
The scoring model evaluates companies on a 0-to-5 scale across 12 ESG themes, including climate transition, biodiversity, energy and resource use, labor relations, human rights, board governance, shareholder rights, anti-corruption, and tax transparency. The framework relies on 220 standardized indicators and more than 2,000 underlying ESG data points.
According to the LSEG, the dataset covers more than 16,000 companies and more than one million fixed-income instruments, representing about 99% of the FTSE All-World Index, a global benchmark that tracks large- and mid-cap stocks across developed and emerging markets.
The company said the scoring model uses a rules-based methodology rather than analyst judgment. LSEG said this will make the scores easier to compare and integrate into financial models and automated investment workflows.
The product also includes an optional ESG Scores Plus layer that adds additional data signals, such as corporate controversies, sovereign ESG risk, green revenues, and sustainable finance metrics. LSEG said this will allow users to expand analysis without changing the core ESG score used in financial workflows.
What’s the background?
Several organizations publish global sustainability reporting frameworks that guide how companies disclose ESG information. Financial data providers and investors often use these frameworks to build sustainability ratings and analytics tools.
- International Sustainability Standards Board (ISSB): Develops global standards for corporate sustainability disclosures as part of the IFRS Foundation’s reporting framework.
- Global Reporting Initiative (GRI): Publishes widely used sustainability reporting standards focused on organizations’ environmental and social effects.
- Sustainability Accounting Standards Board (SASB): Developed industry-specific disclosure standards focused on financially material sustainability information for investors.
- European Sustainability Reporting Standards (ESRS): Define corporate sustainability reporting requirements in the European Union under the Corporate Sustainability Reporting Directive (CSRD).
China sets lower carbon targets while expanding clean energy
What’s the story?
China released new climate and energy targets as part of its 2026–2030 Five-Year Plan, including goals to reduce carbon dioxide emissions intensity 3.8% in 2026 and 17% by 2030. Carbon intensity measures emissions per unit of economic output rather than total emissions. Because the government set a GDP growth target of 4.5%–5%, the overall emissions could increase even if the intensity target is met.
The plan also sets a goal for non-fossil energy to account for about 25% of total energy consumption by 2030, compared with roughly 15% today, while maintaining an earlier goal of more than 30% by 2035. At the same time, the plan signals continued reliance on coal. It calls for peaking coal consumption during the 2026 and 2030 forecast period rather than phasing it down, replacing language from a 2021 pledge that aimed to reduce coal use during the same period.
Why does it matter?
China produces about 30% of global greenhouse gas emissions, more than twice the share of the United States. Because the new targets focus on emissions intensity rather than total emissions, overall emissions could rise if economic growth remains strong.
Environmental groups said the targets are less ambitious than earlier proposals. Norah Zhang, China country lead for Climate Action Tracker, said the plan could have gone further in setting stronger climate targets: "the new plan misses an opportunity to create additional momentum through more ambitious goal setting for 2030 and beyond.”
What’s the background?
China has said it still plans to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. In 2025, the government announced a goal to reduce absolute greenhouse gas emissions 7%–10% from peak levels by 2035, marking its first target based on total emissions rather than emissions intensity.
Coal remains China’s largest energy source, accounting for more than half of total energy consumption, even as the country continues expanding renewable energy capacity such as wind, solar, and energy storage.
South Korea proposes phased ESG reporting beginning in 2028
What’s the story?
South Korea’s Financial Services Commission (FSC) released a draft roadmap on March 5 that would require public companies to disclose sustainability and climate-related information beginning in 2028. The proposal would require companies listed on South Korea’s benchmark KOSPI Index with assets greater than 30 trillion won (about $20.4 billion) to begin reporting under the new standards in 2028 using data from 2027. Requirements could expand in 2029 to KOSPI-listed companies with more than 10 trillion won ($6.8 billion) in assets, with possible later expansion to smaller firms depending on market readiness and international developments.
Companies covered by the rules would disclose information about sustainability risks, governance, and greenhouse gas emissions. Required disclosures would include:
- Climate-related risks and opportunities
- Governance structures and sustainability strategies
- Greenhouse gas emissions data
- Financial effects of climate-related risks
Under the framework, companies would initially report Scope 1 and Scope 2 greenhouse gas emissions — direct emissions from company operations and indirect emissions from purchased energy. Reporting on Scope 3 emissions, which includes supply-chain and product-use emissions, would receive a longer transition period of about three years, meaning disclosures for the first group of companies could begin around 2031.
The FSC said it will collect public comments on the proposal through March 31, 2026, with plans to finalize the reporting roadmap in April 2026.
What’s the background?
The IFRS Foundation created the International Sustainability Standards Board (ISSB) in 2021 to develop global standards for sustainability reporting. Its first two standards—IFRS S1 on sustainability-related disclosures and IFRS S2 on climate-related disclosures—are designed to give investors consistent information about how companies manage climate and other sustainability risks.
Several countries and financial regulators have begun adopting or aligning with the ISSB framework as they introduce mandatory climate and sustainability reporting requirements. On Feb. 24, 2026, the European Council adopted revisions narrowing the scope of EU's Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). The United Kingdom also finalized voluntary sustainability reporting standards modeled on the ISSB framework.
South Korea’s proposal would integrate those global standards into the country’s corporate disclosure system while allowing companies additional transition time to build reporting infrastructure.
In the states
ESG legislation update
Sixteen states took action on 31 ESG-related bills last week (since March 3). Indiana enacted HB 1273 on March 3, 2026, requiring proxy advisory firms to publicly disclose whether ESG-related recommendations against corporate management are supported by written financial analysis and to provide that information to investors, company management, and the public.
States with legislative activity on ESG last week are highlighted in the map below. Click here to see the details of each bill in the legislation tracker.
On Wall Street and in the private sector
Shareholder lawsuits rise after SEC proxy guidance suspension
What’s the story?
The number of shareholder lawsuits increased during the most recent proxy season after the U.S. Securities and Exchange Commission (SEC) stopped responding to most Rule 14a-8 no-action requests in November. Companies typically file these requests to seek confirmation that SEC staff will not recommend enforcement if a shareholder proposal is excluded from the company’s proxy statement. Without those responses, companies must decide on their own whether a proposal can be excluded, increasing the risk of litigation from shareholders who challenge the decision.
The change has already led to several lawsuits. Investors filed cases against AT&T, Axon Enterprises, and PepsiCo after the companies attempted to exclude shareholder proposals from proxy statements. In some cases, the lawsuits prompted companies to reverse course and allow the votes to proceed. Reuters reported that PepsiCo agreed to include a proposal related to animal-welfare practices in its supply chain after the shareholder who filed it sued the company.
New York City pension funds also sued AT&T after the company declined to include a proposal requesting additional disclosure about workforce demographics. New York City Comptroller Mark Levine (R) later said AT&T agreed to settle the lawsuit and allow the vote. A separate lawsuit filed against Axon Enterprises over a proposal requesting a report on the company’s political contributions remains pending in federal court.
Why does it matter?
Rule 14a-8 governs how shareholders can submit proposals for votes at corporate annual meetings, and the SEC’s no-action letters have traditionally provided guidance on whether companies can exclude those proposals. The agency’s decision to stop issuing most responses shifted that responsibility to companies, creating uncertainty for both investors and corporate managers.
Giovanna Eichner, a shareholder advocate at Green Century Capital Management, said “More than anything, this lack of structure and rules is actually just leaving everyone unsure about the best way to move forward.”
What’s the background?
The SEC announced on Nov. 17, 2025, that its Division of Corporation Finance would not respond to most Rule 14a-8 no-action requests during the 2025–26 proxy season, except for issues related to state-law jurisdiction. The SEC said the decision was due to resource constraints following the government shutdown and the existing Rule 14a.8 guidance. Companies seeking to exclude shareholder proposals must still provide the required 80-day notice before filing proxy materials but must determine on their own whether a proposal qualifies for exclusion.
Rule 14a-8 allows shareholders who meet ownership thresholds to submit proposals for inclusion in corporate proxy statements, where investors vote on issues ranging from governance changes to environmental and social policies. For decades, companies relied on SEC staff no-action letters to determine whether those proposals could be excluded.
New lawsuit argues retirement plan ignored climate risk
What’s the story?
A new lawsuit filed against Cushman & Wakefield, a global commercial real estate services firm headquartered in Chicago, argues the company violated its fiduciary duties under federal retirement law by offering a 401(k) investment option that does not consider climate risk. The case was filed in the U.S. District Court for the Western District of Washington in Seattle. The complaint claims the company exposed employee retirement savings to financial risk by including the Westwood Quality SmallCap Fund, whose managers say they do not model or manage climate-related risks in the portfolio.
The lawsuit argues that climate-related risks can affect the long-term value of investments and that plan fiduciaries must account for those risks when selecting retirement plan options. According to the complaint, the Westwood fund holds greater exposure than its benchmark index to sectors considered vulnerable to climate-related financial risks.
The case reverses the argument made in a recent lawsuit involving American Airlines, in which plaintiffs alleged the company violated its fiduciary duties by allowing ESG considerations to influence retirement investments.
Why does it matter?
The lawsuit against Cushman & Wakefield highlights how legal disputes over ESG considerations in retirement plans are emerging from both directions.
The competing claims reflect an ongoing debate over how fiduciaries should interpret their duties under the Employee Retirement Income Security Act (ERISA) when evaluating environmental and social risks in retirement portfolios.
What’s the background?
On Sept. 30, 2025, U.S. District Judge Reed O’Connor, a President George W. Bush (R) appointee, of the U.S. District Court for the Northern District of Texas ruled in Spence v. American Airlines Inc. that American Airlines breached its duty of loyalty under the ERISA by allowing ESG considerations to influence its 401(k) retirement plan. O’Connor ordered the airline to remove ESG considerations from the plan, appoint independent benefits committee members, and prohibit non-financial proxy voting. The court did not award damages after finding the plaintiffs showed no financial loss. The ruling has not been appealed.
The case was originally filed in June 2023 and marked the first federal ruling restricting ESG considerations in a corporate retirement plan, raising questions about how courts may evaluate environmental and social factors when plan fiduciaries select retirement investments.
