March 13 -

By Sharon KimathiEnergy and ESG Editor, Reuters Digitalsharon.kimathi@thomsonreuters.com

Hello!

Today’s newsletter highlights the tension between the plans of U.S. President Donald Trump's administration to cut climate financing and courts pushing back, questioning his team for evidence to back its claims around fraud, waste and abuse of $20 billion in climate funding programmes.

Earlier this week, the Environmental Protection Agency Administrator Lee Zeldin ended financing from the Greenhouse Gas Reduction Fund that amounted to $20 billion, in a move that climate advocates and Democrats say illegally seizes money allocated for clean energy and transportation for disadvantaged communities.

U.S. District Judge Tanya Chutkan said she would order the administration to file a sworn statement detailing the evidence used to justify ending the grant, which aimed to fund greenhouse gas reduction projects.

The climate funding cutbacks and court case come in the midst of the EPA’s extensive deregulation and office shutdowns.

What is the evidence?

Is there any evidence to back Zeldin’s claims?

The EPA said in a statement that it had clawed back the funds, saying the program did not align with the agency's priorities and citing concerns with potential fraud, waste and abuse, although it gave no details.

"You can't even tell me what the evidence of malfeasance is," Chutkan told a lawyer for the Trump administration during a hearing in a U.S. District Court in Washington.

A lawyer for the Trump administration argued the court no longer had jurisdiction over the dispute because the grant had already been terminated.

Chutkan's demand for evidence came as part of a lawsuit brought by the Climate United Fund advocacy group, which sued the EPA and Citigroup's Citibank for withholding the funds that Sustainable Switch covered on Tuesday.

The EPA said it would work to use the funds "with enhanced controls" within the law but did not say specifically what it would do with the money.

"EPA will be an exceptional steward of taxpayer dollars dedicated to our core mission of protecting human health and the environment, not a frivolous spender in the name of 'climate equity'," Zeldin said.

The U.S. Justice Department and the Federal Bureau of Investigations are also reviewing the program, but the use of the FBI to investigate the fund has raised concerns with Democratic lawmakers who said the agencies have no grounds to probe Citibank or the grant recipients.

EPA cutbacks and office shutdowns

"Today is the most consequential day of deregulation in American history," Zeldin said in a video message posted on X.

In total, his agency announced more than 30 deregulatory measures in a succession of press releases.

Zeldin started the day by announcing he will narrow the definition of waterways that receive protection under the Clean Water Act – a move that could ease limits on runoff pollution from agriculture, mining, and petrochemicals.

The agency also said it will take steps to undo a scientific finding from 2009 that greenhouse gas emissions endanger public health, a provision that forms the bedrock of the EPA's greenhouse-gas regulations so far.

The agency later said it would review the Biden-era clean power plant rule that seeks to reduce carbon emissions from power plants to fight global warming and would also roll back greenhouse gas emissions standards for heavy- and light-duty vehicles for model year 2027 and later.

Zeldin’s EPA has also announced that it willshutter the agency's Office of Environmental Justice and Civil Rights, which focuses on minority and low-income communities that have been hard hit by air and water pollution, along with its 10 regional offices, as part of a broader reorganization of the agency.

Talking Points

• Mining deaths: Alseny Camara was one of six local workers killed between June 2023 and November 2024 in the construction of a port and a 670-kilometre railway leading to mines in remote rural Guinea, according to internal reports compiled by company officials that documented more than 40 undisclosed accidents, reviewed by Reuters. Click here for the full Reuters report.

• Humanitarian aid: The U.N. Palestinian refugees agency UNRWA said Israel's suspension of goods entering Gaza under its decision to halt humanitarian aid threatens the lives of civilians exhausted by 17 months of "brutal" war. Most of Gaza's 2.3 million people were dependent on aid, it said.

• Gaza report: This comes as the U.N. Independent International Commission of Inquiry on the Occupied Palestinian Territory, including East Jerusalem, and Israel said in a new report that Israel carried out "genocidal acts" against Palestinians by systematically destroying women's healthcare facilities during the conflict in Gaza, and used sexual violence as a war strategy.

• UK financial rule rollbacks: Britain's Prudential Regulation Authority and Financial Conduct Authority have scrapped proposed new rules to boost diversity and inclusion in the industry, and suspended a fresh crackdown on non-financial misconduct, citing fears of imposing unnecessary regulatory burdens on firms.

• NZBA-exit saga: The Net Zero Banking Alliance is canvassing members over changes to its rules, its chair told Reuters, after the withdrawal of some of the biggest banks. A review of its membership rules has been underway for more than a year, but pressure has mounted on the organisation since climate-sceptic Donald Trump won a second term as U.S. president.

ESG Spotlight

Now to leave you with a helpful message we could all use this time, as the city of Neuchatel, in western Switzerland, launched a pilot project with doctors last month to help struggling residents and to promote physical activity.

Swiss doctors are expanding the range of prescriptions for patients with mental health conditions and chronic illnesses to include strolls in public gardens, art galleries and museums. Five hundred prescriptions will be handed out for free visits to four sites, including three museums and the city's botanical garden.

Just what the doctor prescribed after curating all of that!

Today’s Sustainable Switch was edited by Mark Potter

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