Sky Blog
Environmental, Social, and Governance (ESG) activity at real-world firms is largely about disagreements among shareholders over optimal corporate decisions and not about conflicts between shareholders (as a group) and stakeholders (e.g., customers, suppliers, and employees) who have transactional or contractual …
Firms’ green claims have become ubiquitous in recent years. Products are “recycled” or “responsibly sourced,” financial instruments are “green” or “ESG,” firms promise to become “carbon neutral” or “net-zero,” and so on. But can the recipients of such claims assess …
Last week, California Governor Gavin Newsom signed into law Senate Bill 219, which applies broadly to public and private companies “doing business” in California. The law will require companies that have total annual revenues of over $1 billion dollars …
The U.S. Securities and Exchange Commission (“SEC”) has disbanded its Climate and ESG Task Force in the Division of Enforcement. The Task Force was established in March 2021 with the purpose of identifying ESG-related misconduct, including material gaps or misstatements …
In recent years, climate change and stakeholder demand for sustainable practices have prompted increasing numbers of companies to account for environmental, social, and governance (ESG) factors in their business strategies. Companies’ success in doing so can be measured with ESG …
Corporate governance and political governance are increasingly intersecting, as corporations engage in some of the most contentious and important social challenges of our time with their voice, capital, and actions. In a recent article, I examine this new convergence …
The three “first-in-the-nation” California climate-related disclosure laws enacted late last year are each the subject of proposed amendments making their way through the legislative process. These proposed amendments, which require further legislative approvals and the governor’s signature, would delay key …
In recent years, one of the most significant developments in corporate governance has been the adoption and expansion of voting choice programs by the largest institutional investors. Such changes have come in response to growing scrutiny and pressure from asset …
On May 24, 2024, the Council of the European Union gave its final approval to the Corporate Sustainability Due Diligence Directive (CSDDD or directive) that was proposed by the European Commission in February 2022.[1] This milestone marks the completion …
State-owned enterprises (SOEs) can help cause but also solve the climate crisis. A lot depends on the controlling shareholders of SOEs – governments – which wield significant legal and economic power over SOEs’ actions. If we are serious about holding …
On October 24, 2023, the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (together, the “Agencies”) released their final Principles for Climate-Related Financial Risk Management for Large Financial Institutions (the …
There have been dozens – and probably hundreds – of client alerts, briefs, white papers and other thought leadership pieces on the California bills awaiting signature that will require greenhouse gas emissions (SB 253) and climate risk (SB 261) disclosures. …
Corporations have a history of using deceptive tactics to enhance their public image on environmental compliance while advancing their profit-focused objectives. This phenomenon began in the late 1980s, along with the rise of environmental consciousness. A new generation of environmentally …
An increasing number of consultancies, financial technology firms, data providers, and investment advisory groups offer information about localized physical climate risks like floods, hurricanes, and wildfires. In recent years, mainstream financial services companies have acquired many of the early climate-analytics …
The Securities and Exchange Commission (SEC or Commission) is considering proposals that would require public companies to disclose reliable and complete information about the risks of climate change. The Commission’s efforts will fall short, however, unless it addresses the role …
In 2022, the Securities and Exchange Commission (SEC) proposed climate disclosure rules requiring each public company to tell investors specifically about the financial effects of climate risk on the company and how the company assesses those risks. The rules will …
In response to growing concern about the effects of climate change, different regions of the world have adopted mandatory greenhouse gas (GHG) disclosure rules, including Australia, the European Union, and the United Kingdom. Notably, the U.S. Securities and Exchange Commission …
In 2022, public companies witnessed a new kind of corporate governance activism. New rules and regulations from the Securities and Exchange Commission (the SEC) use the lever of mandated disclosure to push for corporate governance actions, and in some cases …
Both anticipated and less expected changes occurred across the ESG landscape in 2022. Anticipated changes included regulatory developments across the globe, including in the US, the UK, and the EU. Less expected changes included global and regional political shifts, such …
The U.S. Department of Labor (the “DOL”) recently issued a final rule (the “Final Rule”) that seeks to clarify the circumstances under which a fiduciary subject to ERISA may consider climate change and other environmental, social …