Environmental Social Governance Backlash

Ongoing legislative and litigation battles, now in more than twenty states, are occurring over the use of ESG (environmental social governance) investment criteria for government funds, contracts, and pensions along with attempts to establish corporate disclosure requirements where ESG factors inform business choices. On one side stand ESG advocates who factor variables such as climate change into investment screens and supply chain decision-making. Their alleged ultimate goal is to mitigate the risks associated with environmental harm downstream and to create sustainable revenue flows. On the other hand, opponents view ESG investment risk screens as boycotts against specific industrial sectors such as nonrenewable energy. Both sides perceive the other as favoring undemocratic and unlawful constraints on free trade. Familiarity with the growing body of legislation and case law is increasingly necessary to effectively advise corporate clients and government entities.

ESG strategies such as divestment from the fossil fuel industry when required in negative investment screens for stock portfolios, partnership agreements, or government contracting have become associated with mitigating risks and enhancing corporate efficiencies on the one hand and targeted boycotts against excluded industries on the other. This has led to a raft of legislation across the country either strengthening ESG requirements such as in Oregon or laws that seek to undo ESG commitments such as in Florida, Texas, North Carolina, Idaho, and Utah. The latter often proceed by conditioning government contract awards on the removal of ESG scores thereby effectively banning the use of ESG criteria by recipients. Likewise, litigation is percolating in multiple states such as Oklahoma, Utah, Maryland, Texas, Louisiana, West Virginia, and Wisconsin asserting that government attempts to allow or require ESG factors in investment decision-making is ultra vires in contravention of federal law and free market principles.

This course is suitable to attorneys at any stage in their career who seek to better understand the burgeoning controversy regarding incorporating ESG risk factors into government contracts and corporate investment decision-making.

Learning Objectives:

• Review the origins and expanding meaning of “ESG” (i.e., “environmental social governance”) including the ongoing debate over whether ESG represents a threat to free market principles via the move away from shareholder theory to stakeholder theory
• Evaluate recent trends marked by legislation introduced in 37 states in 2023 to either prevent or encourage companies to consider ESG risk factors such as climate change preparedness and diversity of management/workforce in investment decisions along with litigation by investors directly against corporations
• Analyze the practical challenges of creating positive or negative investment screens for particular categories of stocks held in portfolios such as for those in the energy sector
• Comparatively assess controversies over ESG (environmental, social, governance) on the one hand and DEI (diversity, equity, and inclusion) on the other
• Analyze multiple cases across at least seven states in the past two years seeking to prevent retirement plan administrators from considering ESG factors when making investments on behalf of plan beneficiaries
• Forecast the efficacy of legislation and/or litigation whether favoring or disfavoring ESG criteria in changing actual corporate practices

Course Time Schedule:

Eastern Time: 2:00 PM - 4:00 PM
Central Time: 1:00 PM - 3:00 PM
Mountain Time: 12:00 PM - 2:00 PM
Pacific Time: 11:00 AM - 1:00 PM
Alaska Time: 10:00 AM - 12:00 PM
Hawaii-Aleutian Time: 9:00 AM - 11:00 AM

This course is also being presented on the following dates:

Friday, February 14, 2025
Friday, March 7, 2025
Friday, March 28, 2025
Friday, April 18, 2025
Friday, May 9, 2025