Fraud-on-the-Market Liability in the ESG Era

By Kevin S. Haeberle July 29, 2024 by renholding

Fraud-on-the-market (“FOTM”) suits are thought to generate considerable benefits for society – namely, those associated with increased stock-market price accuracy and liquidity. But these suits are also said to impose exceptionally large social costs relative to even those associated with …

How Industry-Wide Regulatory and Reputational Risks Can Shape Executive Incentives

By Francesca Franco, Claudia Imperatore and Mariya Ivanova July 26, 2024 by renholding

Over the past two decades, regulators, lawmakers, and stakeholders have increasingly urged companies to give greater weight to the broader interests of society alongside traditional financial goals. As a result, a notable percentage of firms – 64 percent of the …

Corporate Sustainable Finance

By Paul Rose July 23, 2024 by renholding

Sustainable debt financing—bonds issued to support projects that benefit the environment or social welfare—has skyrocketed over the past decade, rising from a niche market to a trillion-dollar business. Public finance has been an essential catalyst for the market for sustainable …

ISS Discusses the Quiet Relevance of Social Concerns, the S in ESG

By Tom Inchley July 23, 2024 by renholding

It has often been argued that the ‘S’ in ESG has been overshadowed in the ESG acronym, having long played third-fiddle to corporate governance and environmental concerns. There are various reasons for this, one being that the social pillar has …

Does Expected Shareholder Litigation Affect Corporate ESG Reporting?

By Lijun (Gillian) Lei, Sydney Qing Shu and Wayne B. Thomas July 16, 2024 by renholding

Many firms now issue ESG reports voluntarily in response to fast-growing investor and stakeholder demand. Yet survey evidence shows that corporate lawyers consider ESG-related disputes a top source of litigation risk for their clients.[1] In a new study, we …

Shareholder Voting and Citizen Democracy Interact in Providing Public “Goods”

By Robin Döttling, Doron Levit, Nadya Malenko and Magdalena Rola-Janicka July 11, 2024 by renholding

Concerns that public policy and regulation have been ineffective in addressing climate change and similar challenges have led to a search for possible solutions in financial markets. Investor activism promoting socially responsible corporate practices, the rise in environmental and social …

SEC Commissioner Peirce Offers a Hitchhiker’s Guide to ESG

By Hester M. Peirce July 5, 2024 by renholding

The last time I was in Poland was approximately three decades ago. It was a brief but memorable stop on an unfocused American student’s hop across Europe. Among other things, Poland provided me my only hitchhiking experience. Some kind soldiers …

Do Carbon Offsets Lead to Decarbonization or Transition-Washing?

By Sehoon Kim, Tao Li and Yanbin Wu June 20, 2024 by renholding

Voluntary carbon markets (VCMs) enable firms to offset their emissions by purchasing and retiring carbon-offset credits issued by third-party project developers. As nations and corporations increasingly commit to combating climate change, VCMs have emerged as a tool to support global …

Silent Greenwashing: The Economic Case for Moving from Voluntary to Mandatory Environmental Disclosure

By Julien Manili April 25, 2024 by renholding

As consumers demand protections for the environment, corporations increasingly tout their sustainability efforts. Yet, economic indicators demonstrate that those efforts are mostly talk. Research and development on greener products and processes remains remarkably low, at about 4 percent of global …

Does Being Ethical Pay for Firms?

By Saurabh Ahluwalia, Linda Ferrell, O.C. Ferrell and Priyank Gandhi April 19, 2024 by renholding

Most businesses follow an explicit or implicit code of conduct that guides their operations, their relations with the public, and their treatment of customers, employees, and other stakeholders. These rules often go beyond what is legally required, and businesses often …

Are Financial Firms Ready for Climate Regulation?

By Ben Brown and Nick van Baal April 8, 2024 by renholding

Regulators globally are requiring companies to disclose their greenhouse gas (GHG) emissions. For companies in some industries, Scope 1 and 2 emissions – covering, respectively, emissions from direct fuel use and from acquired energy – will cover most relevant emissions …

The Millennial Corporation: Strong Stakeholders, Weak Managers

By Michal Barzuza, Quinn Curtis and David H. Webber March 20, 2024 by renholding

After several years of dramatic growth, ESG investing seems to have entered a period of retrenchment. While it is impossible to predict the future trajectory of ESG, the movement has revealed important structural features of our financial system and the …

How Market Efficiency Plays a Role in ESG Disclosure

By George S. Georgiev March 1, 2024 by renholding

Proponents of ESG have recently had to contend with several developments that, at first blush, appear inconvenient. Investor support for ESG-focused shareholder proposals seems to have declined year-on-year, and some investors have abandoned ESG-themed funds while others have withdrawn from …

The Corporate Contract and the Private Ordering of Shareholder Proposals

By Mohsen Manesh February 26, 2024 by renholding

Should Coca-Cola do more to protect abortion rights?[1] Should Mastercard track gun purchases?[2] Should Disney’s workplace DEI trainings be more sensitive to conservative perspectives?[3] More importantly, should an activist holding only a nominal stake in any of …

Wachtell Lipton Discusses Compensation Season 2024

By Jeannemarie O'Brien, Adam J. Shapiro, David E. Kahan, Michael J. Schobel and Erica E. Aho January 29, 2024 by renholding

In contrast to the volatility that vexed the economy in 2022, markets rose in 2023 as inflation fell and the labor market remained strong. Entering 2024, ongoing international instability, rapidly changing technology and the United States presidential campaign are certain …

The Promise and Perils of Promoting ESG With Demand-Side Regulation

By Thilo Kuntz January 24, 2024 by renholding

In recent years, regulators and other proponents of greater corporate attention to environmental, social, and governance (ESG) factors have treated boards of directors as, in effect, supplying ESG, making the decisions that take ESG into account. Yet there are obvious …

How Stressing ESG Affects Firm Value

By Sonam Singh, Ashwin V. Malshe, Yakov Bart and Serguei Netessine January 17, 2024 by renholding

The intersection of business and sustainability has undergone a transformative shift in recent years. Once relegated to the periphery of corporate consciousness, environmental, social, and governance (ESG) factors are now at the forefront of companies’ strategic considerations. Yet they raise …

What Explains the Rise of ESG Assurance?

By Shawn Shi January 16, 2024 by renholding

Over the last decade, investors and other stakeholders have demonstrated a preference for firms that embrace good environmental, social, and governance (ESG) practices. It is natural, therefore for firms to try to improve their ESG profiles through ESG disclosures. The …

Wachtell Lipton Discusses Key Issues in Corporate Governance for 2024

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain and Carmen X.W. Lu January 10, 2024 by renholding

Over the past year, expectations for directors have continued to evolve, bringing new challenges and responsibilities to the boardroom. The remarkable speed, volume and proliferation of channels through which information travels today continue to place more scrutiny on boards and

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Delaware Vice Chancellor Travis Laster Says Bill Barr Could Use Some Help on Delaware Law

By Travis Laster December 7, 2023 by renholding

The universe regularly provides reminders to remain humble, including reminders that having expertise in one area does not make you an expert in adjacent areas. Former Attorney General Bill Barr recently provided one of those reminders with his opinion column

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