Recent Publications
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Department of Labor Proposes Rule to Remove Barriers to Considering ESG Factors in Plan Management
The Department of Labor recently proposed amendments to its “investment duties” regulation under Title I of ERISA. The proposal attempts to address several stakeholder concerns, including the current regulation’s perceived bias against ESG investing and voting proxies. To that end, the proposal clarifies that ESG factors may often be appropriate considerations for ERISA plan fiduciaries when making investment or proxy voting decisions on behalf of ERISA plans.
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SEC Division of Corporation Finance Publishes Sample Climate Disclosure Comments
The SEC Division of Corporation Finance recently issued a sample comment letter regarding a company’s climate-related disclosures. The comments highlight the SEC’s focus on risk and MD&A sections, and indicate that the SEC will review disclosures in corporate social responsibility/sustainability reports and compare them to those in SEC filings.
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SEC Approves Nasdaq Board Diversity Requirements
The SEC recently approved Nasdaq’s board diversity requirements, which will apply to all Nasdaq-listed companies, including non-U.S. issuers, smaller-reporting companies and controlled companies. This is a significant step by a U.S. stock exchange, and likely the first of more ESG-related rules to come, as the SEC has indicated its intent to take up board diversity rulemaking in the next year.
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IOSCO Issues Final Report on Sustainability-related Issuer Disclosures
The International Organization of Securities Commissions (IOSCO) has published a report that sets out a vision for a global baseline for sustainability standards for issuers. The report sets out expectations for an ISSB that would sit alongside the International Accounting Standards Board, building on and integrating the content and recommendations of existing frameworks, principles and guidance, and incorporating a “building blocks” approach that would enable certain jurisdictions to set reporting requirements beyond the ISSB’s baseline.
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President Biden Calls on Federal Government to Mitigate Climate-Related Financial Risk
President Biden recently issued an Executive Order on Climate-Related Financial Risk that calls on the federal government to take concrete steps to mitigate the growing physical and transition risks of climate change on the U.S. economy, workers and families. This client alert, part of a series focused on ESG disclosure and regulatory developments, highlights key aspects of the order.
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SEC Highlights Compliance Issues Related to Investment Advisers Offering ESG-Related Investment Products
The SEC’s Division of Examinations published a Risk Alert highlighting observations of deficiencies and internal control weaknesses from recent examinations of investment advisers offering products, including private funds, whose investment strategies incorporate environmental, social and governance factors.
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President Biden Sets Out Ambitious American Jobs Plan with Significant Climate-Related Proposals
President Biden recently set out his administration’s ambitious approximately $2.25 trillion American Jobs Plan to create jobs, rebuild the country’s infrastructure, address the climate crisis and better position the country to compete with China. Our alert summarizes the climate-related aspects of the proposal.
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CFTC Continues to Move Forward on Climate Change
Acting CFTC Chairman Rostin Behnam recently announced the establishment of a Climate Risk Unit to focus “on the role of derivatives in understanding, pricing, and addressing climate-related risk and transitioning to a low-carbon economy.”
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Acting SEC Chair Lee Discusses Additional Climate and ESG Initiatives
Building on the SEC’s ESG-related initiatives, Acting SEC Chair Allison Herren Lee, in a speech delivered March 15, identified additional opportunities where the SEC’s regulatory mission intersects with climate and ESG issues, and the associated initiatives she has directed the SEC to undertake.
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SEC’s Coates Calls for “Adaptive and Innovative” Policy on ESG Disclosure
On March 11, 2021, the SEC published a statement by John Coates, acting director of the SEC’s Division of Corporation Finance, in connection with remarks given at the 33rd Annual Tulane Corporate Law Institute.
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U.S. Department of Labor Will Not Enforce Final Rules on ESG Investing, Proxy Voting
In November and December 2020, the DOL published its final rules on “Financial Factors in Selecting Plan Investments” (the “Pecuniary Factors Rule”) and “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” (the “Proxy Voting Rule”), respectively.
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Acting SEC Chair Allison Herren Lee Issues Statement on the Review of Climate-Related Disclosure
Acting SEC Chair Allison Herren Lee issued a statement that she has directed the Staff of the SEC’s Division of Corporation Finance to “enhance its focus on climate-related disclosure in public company filings.”
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ESG Ratings and Data: How to Make Sense of Disagreement
Providers of ESG ratings play an important role in how markets assess the ESG performance of companies. However, their use of myriad methodologies and data, including aggregate E, S and G scores, for instance, can produce conflicting results and market confusion. Ratings discrepancies have important consequences for both investors and corporate managers; each must take steps to address potential ratings inaccuracies.
Introduction to ESG
Introduction to ESG
“ESG” describes a set of environmental, social and governance factors used to evaluate investment and company impacts beyond traditional financial measures. ESG topics are now the subject of significant focus by asset managers, asset owners such as pension funds and insurance companies, and other investors, as well as by proxy advisory firms, index providers, regulators and rating agencies.
ESG Disclosures
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ESG Disclosures: Frameworks and Standards Developed by Intergovernmental and Non-Governmental Organizations
As ESG matters have increasingly become the focus of investors and regulators, standards of disclosure created by intergovernmental and non-governmental organizations, as well as industry participants, have gained market prominence. While most ESG disclosure is made on a voluntary basis, that is beginning to change, particularly in Europe.
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ESG Disclosures: Task Force on Climate-related Financial Disclosures
Since their publication in 2017, the Task Force on Climate-related Financial Disclosures (TCFD) recommendations for voluntary disclosures by companies concerning their climate-related financial risks have emerged as a leading international framework for climate-related disclosures. This client alert, part of a series focused on ESG developments, summarizes the aims of the TCFD and its disclosure recommendations.
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ESG Disclosures: The Push for Consistent and Comparable Standards – Europe
The European Union has taken a leading role in advancing ESG disclosure requirements across the full spectrum of sustainability topics. Some of the initiatives are focused largely on climate issues, while others address broader sustainability concerns. This client alert, part of a series that reviews developments in the ESG disclosure landscape, provides an introduction to the current ESG regulatory disclosure frameworks of the European Union.
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ESG Disclosures: The Push for Consistent and Comparable Standards – United Kingdom
The United Kingdom has been an early adopter of ESG regulations and guidelines; a number of recent initiatives in the United Kingdom highlight the extent to which a focus on ESG among corporates, investors and financial institutions has become a “new normal.” This client alert, part of a series that reviews developments in the ESG disclosure landscape, provides an introduction to the current ESG regulatory disclosure framework in the U.K.
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The U.S. Regulatory Framework for ESG Disclosures
The SEC takes a principles-based, materiality-focused approach to disclosure that applies equally to environmental, social and governance (ESG) disclosures. This client alert, part of a series that reviews developments in the ESG regulatory landscape, provides an introduction to the current ESG regulatory disclosure framework in the United States.
ESG in Conversation
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Takeaways – ESG Intersects with PE: Practical ESG Considerations for Private Equity
On October 27, Paul, Weiss hosted a virtual, senior-level roundtable, “ESG Intersects with PE: Practical ESG Considerations for Private Equity,” with general counsel, chief compliance officers and other C-suite executives from top private equity firms.
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Dave Curran Interviewed on Litera TV About Lawyers Leading Social Change
Chief Sustainability and ESG Officer Dave Curran was featured on an April 23 Litera TV episode of “Lawyers Leading Social Change,” with host Alma Asay, a domain expert for legal workspace technology company Litera and former Gibson Dunn attorney.
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Takeaways – ESG and Board Diversity, Equity & Inclusion: Connecting Aspiration to Action
Paul, Weiss hosted a roundtable, “ESG and Board Diversity, Equity & Inclusion: Connecting Aspiration to Action.”
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Takeaways — Bridging the Divide of ESG: Linking Business and the Legal & Risk Ecosystems
On February 3, Paul, Weiss hosted a joint webinar with the NYU Stern School of Business’s Center for Sustainable Business, titled “Bridging the Divide of ESG: Linking Business and the Legal & Risk Ecosystems.”
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Paul, Weiss Hosts ESG Virtual Webinar “Bridging the Divide of ESG”
Paul, Weiss recently hosted a virtual webinar, “Bridging the Divide of ESG: Linking Business and the Legal & Risk Ecosystems,” in collaboration with the NYU Stern Center for Sustainable Business.
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Takeaways – Attorney General Loretta Lynch in Conversation with Thomas Kim
On November 4, Paul, Weiss and Thomson Reuters hosted a fireside chat with litigation partner Loretta Lynch. The discussion was facilitated by Paul, Weiss Chief Sustainability and ESG Officer Dave Curran and Thomson Reuters Chief Legal Officer and Company Secretary Thomas Kim.
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Takeaways – Spotlight on the “G” in ESG: Societal Shifts Collide with Traditional Corporate Governance
On October 6, 2020, Paul, Weiss and Nasdaq organized a joint roundtable via Zoom leading over 40 general counsel, heads of sustainability, corporate secretaries and board members in a discussion regarding how societal upheavals, such as COVID-19 and Black Lives Matter, have accelerated the collision between ESG considerations and traditional corporate governance.
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Takeaways: Reflecting Forward – A View from the Inner Circle
Paul, Weiss recently hosted almost 50 senior Legal, Compliance, and Sustainability executives, directors and academic leaders in a closed-door roundtable discussion via Zoom to discuss how companies are adapting to the rapidly expanding ESG challenges.
ESG Lexicon
Paul, Weiss’s Sustainability and Environmental, Social & Governance (ESG) Advisory Practice helps clients develop integrated ESG strategies that safeguard corporate reputation, mitigate risk and leverage opportunity.