Today: Revolution Wind partnership seeks injunction to administration's suspension order; venture capitalists likely to continue pivoting away from climate in 2026; CBAM and the other climate regulations to look out for this year; Department of Justice targets firms on DEI using fraud law.

Welcome back: Danish energy company Orsted said its U.S. joint venture is seeking an injunction against the Trump administration’s order halting construction of all U.S. offshore wind projects, The Wall Street Journal's Billy Gray and Clara Hudson report.

The $5 billion Revolution Wind project, a 50-50 venture between the Danish renewable company and Global Infrastructure Partners’ Skyborn Renewables, filed a supplemental complaint challenging the order in the U.S. District Court for the District of Columbia. The project, which features turbines as large as skyscrapers, is off the coast of Rhode Island and Connecticut.

The U.S. government in December paused the federal leases for five East Coast projects in the works “due to national security risks identified by the Department of War in recently completed classified reports.”

It is the latest in a series of moves the Trump administration has taken that have shaken the renewable energy industry. Trump has previously paused federal permits and leasing for wind projects both on land and at sea, which threw the industry into months of uncertainty. The president has also directly criticized what he has called “big ugly windmills.”

Orsted said Friday that Revolution Wind would continue working with the administration toward a resolution, but believes the suspension—filed by the Interior Department—violates law.

• The Trump administration halted all U.S. offshore wind projects under construction due to national security risks, affecting five projects. (WSJ)

• Connecticut's governor criticized the order halting work on offshore wind projects, saying it will harm attempts to lower power bills. (Bloomberg)

• Dominion Energy sues Trump administration for halting offshore wind project after $9 billion investment. (ESG Today)

• A rollback of climate policies in 2025 has heightened concerns about rising greenhouse gases, even as a clean energy boom takes hold. (FT)

• In his first year back in office, President Trump has rapidly reshaped America’s climate and energy landscape. (NYT)

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Investors in climate tech have butted up against changing regulations, a loss in support for environmental policies and the growth of artificial intelligence this year, WSJ Pro Sustainable Business's Yusuf Khan reports. 

“So many people who were investing into climate have pivoted,” said George Darrah, general partner at London-based Systemiq Capital. He said that many startups and VCs have retooled companies that were focusing on climate and solutions to mitigate climate change into areas such as defense, which have proved more popular under the Trump administration, and Europe’s pivot to rearm in light of Russia’s invasion of Ukraine.

California-based startup Brimstone previously touted its innovative way to decarbonize concrete. Now it has pivoted heavily into critical minerals amid high demand from sectors like artificial intelligence and defense.

On Thursday, the European Union rolled out its new carbon tax, the Carbon Border Adjustment Mechanism. Exporters of high-impact goods such as steel, fertilizers and cement into the EU will now have to pay for their products’ emissions. The bloc wants to cut emissions worldwide for the heaviest emitting sectors, but also protect its own industries, which have faced competition from abroad, Yusuf Khan and Clara Hudson write.

The EU is also aiming to stop what is known as carbon leakage, in which companies based in Europe move carbon-intensive production overseas to regions without similar carbon taxes and policies, or when EU products get replaced by more carbon-intensive imports.

Instead, companies selling into the bloc will have to buy credits to cover emissions generated where the goods are produced. If the goods are subject to a carbon price in the country of production, that can be deducted. The objective is to get other countries to price carbon and reduce emissions of their own industries, making CBAM an ambitious effort to shape other countries’ regulations.

The Trump administration has launched investigations into the use of diversity initiatives in hiring and promotion at major U.S. companies, built on the novel use of a law meant to punish firms that cheat the government.

The Journal's Lydia Wheeler reports that the civil probes are proceeding under the umbrella of the False Claims Act, which has traditionally been used to go after contractors who bill the government for work that was never performed or inflate the cost of services rendered.

Now the DOJ is embracing the theory that holding a federal contract while still considering diversity when hiring is, in effect, fraud against the government that entitles it to recoup potentially millions of dollars.

Alphabet’s Google and Verizon Communications are among a list of companies that have received Justice Department demands for documents and information about their workplace programs, according to people familiar with the investigations.

• Tesla’s annual vehicle deliveries decreased for the second consecutive year, with a 9% drop in 2025 sales. (WSJ)
   
• Rivian said its fourth-quarter production and delivery totals met its expectations despite declining from the year before. (WSJ)
   
• Chinese electric vehicle maker BYD sees sales growth slow amid competition at home, but it is still set to top Tesla. (WSJ)
   
• Hybrid vehicles are in high demand, with nearly one in six new cars predicted to be a hybrid next year. (Bloomberg)
   
• Tech companies spend hundreds of billions on data centers, chips and networking, but they generally don’t break out the specific costs. (WSJ)
   
• Glencore has agreed to acquire a majority stake in Dutch energy solutions provider FincoEnergies. (ESG Today)
   
• An office romance at Nestlé cost the chief executive his job. Now the new boss is shaking up the food-and-drink maker. (WSJ)
   
• Lululemon founder Chip Wilson is initiating a proxy fight, nominating three director candidates to the board. (WSJ)
   
• Some of the largest reinsurance companies boosted profitability after they reduced coverage to limit their risk from catastrophic events. (FT)

WSJ Pro Sustainable Business gives you an inside look at how companies are tackling sustainability. Send comments to bureau chief Perry Cleveland-Peck at perry.cleveland-peck@wsj.com and reporters Clara Hudson at clara.hudson@wsj.com and Yusuf Khan at yusuf.khan@wsj.com. Follow us on LinkedIn at perrycp, clara-hudson and yusuf_khan.