Legal Considerations in Responsible Investment


G&E's ESG Institute Submits Amicus Brief in Supreme Court Case Supporting Corporate Liability for Child Slavery in Supply Chain

On behalf of investors and investment managers dedicated to ESG principles, the ESG Institute submitted an amicus brief to the United States Supreme Court on Wednesday, October 21, 2020, for consideration in the pending Nestlé USA, Inc. v. Doe I case. Respondents, former child slaves, allege that Nestlé USA is liable under the Alien Tort Statute (ATS) for incorporating and facilitating child slave labor operations on cocoa farms in West African countries in its cocoa supply chain. Writing in support of Respondents, the ESG Institute argues that ESG investors have a particular interest in ensuring that the ATS be available as a legal mechanism for holding corporations accountable for their ESG transgressions.

The ESG Institute further asserts that permitting corporate liability under the ATS would incentivize U.S. companies to adopt and enforce humane and ethical business operations, such as closely monitoring their supply chains, in an effort to eradicate forced and child labor. The ESG Institute believes that doing so will ultimately advance the goals of ESG investing, which continues to grow at an unprecedented rate. The date set for the case to be argued before the Supreme Court was December 1, 2020.  Read the Amicus Brief

Background on the ESG Institute

Global investor interest in sustainable and responsible investment continues to accelerate at a rapid pace. The Global Sustainable Investment Alliance (GSIA) estimates $30 trillion in global assets are managed under responsible investment strategies, representing a 34% increase since 2018. Responsible investment strategies consider environmental, social and governance (ESG) factors in portfolio selection criteria and management with the belief that better corporate ESG profiles result in fewer disasters and corporate scandals. Investment policies that integrate ESG criteria tend to express investor values specific to weapons, carbon emissions, fossil fuel reserves, labor conditions, human rights, corporate governance, executive compensation and other concerns aimed at solving social or environmental problems. Corporate engagement and shareholder activism are also strategies investors are increasingly using to influence corporate behavior driven by ESG guidelines.

With over 23 years of actively protecting and promoting the rights of institutional investors and public entt & Eisenhofer (G&E) has built its legacy in corporate governance with an unwavering commitment to responsible investment. We continue to build on our history with an initiative designed to address the increasing dialogue on ESG criteria within the institutional investment community. The mission of the Grant & Eisenhofer ESG Institute, led by its co-directors Deborah Elman and Caitlin Moyna, is to provide thought leadership on legal issues related to ESG considerations and socially responsible investment. Key members of the global investment and ESG communities will participate on an Oversight Board to provide strategic insight and development for the Institute. The Oversight Board members have been thoughtfully selected to provide a diverse range of perspectives, experience and backgrounds that will collectively direct the future evolvement of the ESG Institute. Members bring global experience from asset managers, public pension funds and nonprofits.

Some of the legal issues the ESG Institute will focus on include:

  • Sustainability and Fiduciary Duty
  • Climate Change and Securities Law
  • Corporate Legal Responsibility for Activity in Developing Countries
  • International Whistleblower Developments
  • Legal Challenges to Limit Compensation

The ESG Institute meets periodically with high quality events both in the US and Europe to provide continuity and a forum for engagement to connect like-minded participants and organizations. The Institute will seek regular feedback from participants and the Oversight Board. Our objective is to continuously address the legal issues that decision makers and stakeholders in the investment community are grappling with in implementing sustainability considerations and responsible investment criteria.

Proportion of Global SRI Assets by Region

* Source: 2018 "Global Sustainable Investment Review" released by the Global Sustainable Investment Alliance

Related Articles

U.S. Bans Importation of Malaysian Palm Oil Products Following Petition Filed by G&E ESG Institute
In an important human rights order issued Sept. 30, U.S. Customs and Border Protection banned all palm oil and palm oil products manufactured by Malaysia’s biggest palm oil producer, FGV Holdings Berhad.
G&E Petitions to Block Palm Oil Imports Produced by FGV Holdings Berhad Using Child and Forced Labor
As part of ongoing efforts to advocate for sustainable and responsible business practices, the Grant & Eisenhofer ESG Institute has filed a petition with U.S. Customs and Border Protection (CBP) to block the import of palm oil produced using forced and child labor.
ESG Initiatives Adopted by Exchanges
According to the fifth annual Sustainability Survey published by the World Federation of Exchanges (WFE), 90% of exchanges incorporate ESG initiatives.
Hedge Funds Making Progress, But Slow to Adopt ESG
According to a survey of institutional investors by research firm, Preqin, 65% of hedge fund managers do not have an ESG policy.
Uzbek Working to End Forced Labor in Cotton Fields
For decades, the government of Uzbekistan systematically forced over a million of its citizens into the country’s cotton fields. Government officials knocked on doors, threatening expulsion from school, job loss, and loss of social security benefits for those who refused to participate in the forced labor.
EU Agrees on New Requirements Regarding Sustainable Investments and Sustainability Risk Disclosures
On March 7, 2019, the European Parliament and European Union countries agreed on new rules on the disclosure and transparency requirements for sustainable investments made by asset managers.
Investment Professionals Increasingly Focused on ESG Factors
At the close of 2018, the marketing firm Edelman released its second annual Special Report: Institutional Investors, a supplement to The Edelman Trust Barometer, which measures global trust in business, government, media and NGOs.
Aon Survey Shows 68% of Global Investors Consider Responsible Investing Important
Large Investors Ask SEC to Issue Rules on ESG Disclosure Standards
Ninth Circuit Holds No Duty to Disclose Unfair Labor Practices under California Consumer Protection Law
D.O.L. Qualifies ERISA Fiduciaries’ Obligations Regarding ESG Considerations

Copyright © 2021 Grant & Eisenhofer P.A. All Rights Reserved.