Whether on their own initiative or in response to pressure from regulators, consumers, or activist shareholders, many issuers are disclosing more and more about their environmental, social, and governance ("ESG") practices. Issuers are publishing information about their accomplishments, current efforts, and future commitments in each of these areas, including in the U.S. Securities and Exchange Commission ("SEC") filings, webpages, printed materials, presentations to investors, etc. There is, as of now, no U.S. law compelling issuers to make ESG statements when they are not material. But recent U.S. case law underscores that ESG disclosures may be actionable if found to be materially false or misleading.
In this White Paper, we suggest some steps companies should consider as they seek to minimize the litigation risks that may arise from their increasing ESG disclosures.