ESG

Subscribe to ESG
Umesh Pratapa

In the following guest post, Umesh Pratapa takes a look at environmental liability risks under Indian law and consider the D&O insurance implications. Umesh is the Author of the handbook on D&O liability insurance published by Institute of Directors (IOD), India, and Consultant – liability insurance. I would like to thank Umesh for allowing me to publish his article on this site. I welcome guest post submissions from responsible authors on topics of interest to the site’s readers. Please contact me directly if you would like to submit a guest post. Here is Umesh’s article.

*************************************Continue Reading Guest Post: India: Environmental Litigation Risks – D&O Liability Insurance

As often happens when companies are hit with securities class action lawsuits, Lululemon, which in August was sued in a securities suit, was hit with a parallel shareholder derivative lawsuit. The derivative suit allegations not only largely track the allegations in the prior securities suit, but the derivative suit complaint expressly refers to the prior securities lawsuit filings. However, there is an unusual twist. In addition to tracking the same allegations as the securities suit, the Lululemon derivative suit complaint contains an entirely new and different set of allegations – and the new set of allegations are interesting in their own right.

The new allegations relate to the Lululemon’s DEI program (or what Lululemon called its IDEA program, standing for Inclusion, Diversity, Equity, and Action). DEI programs have been the recent focus of attention, with, for example, some companies facing litigation for even having a DEA program, and other companies (such as Ford and Harley-Davidson) having to publicly back away from their DEI program in response to political pressure. The allegations in the new Lululemon derivative complaint do not seek to challenge the company for having adopted this kind of program; the allegations instead question the company’s actions for doing too little to combat discrimination and eliminate racial issues at the company. In the context of a changing environment surrounding ESG issues in general, and DEI issues in particular, the new Lululemon lawsuit represents an interesting development, as discussed below. The derivative complaint in the new lawsuit can be found here.Continue Reading Lululemon Hit with Derivative Suit for Allegedly Ineffective DEI Program

Some of you may have heard: there was a Presidential election in the United States last Tuesday, as a result of which there will be a change in administration next January. This upcoming change almost certainly means a categorical shift in the regulatory environment in Washington, including in particular at the SEC. Many of the SEC’s regulatory initiatives under the Biden administration may be rolled back. In particular, the new administration likely will pull the plug on the SEC’s pending climate change disclosure guidelines. These likely developments at the federal level may mean that, as Cydney Posner noted in a November 7, 2024, post on the Cooley law firm’s PubCo blog (here), State level actions “may, in many ways, take on much larger significance.”

For that reason, it is worth taking a closer look at the ruling last week in the federal court lawsuit in which various business groups led by the U.S. Chamber of Commerce are challenging the California statutes requiring companies “doing business” in the state to make certain climate change-related disclosures. As discussed below, the Court has denied the plaintiffs’ pre-discovery motion for summary judgment on First Amendment grounds. The court’s interesting ruling may provide some indication of the future direction of the litigation, as well as on the likelihood that the California statutes will eventually compel companies to make the mandated disclosures. A copy of the Central District of California’s November 5, 2024, order can be found here.Continue Reading What Now for Climate Change Disclosure Requirements?

In March 2021, to great fanfare, the SEC announced its formation of a Climate and ESG Task Force to “develop initiatives to proactively identify ESG-related misconduct,” as well as to “coordinate the effective use of Division resources, including through the use of sophisticated data analysis to mine and assess information across registrants, to identify potential violations.” Now, it turns out that, much more quietly, the agency has disbanded the Task Force. As first reported in a September 12, 2024, Bloomberg article (here), the SEC shut down the Task Force “within the past few months.”Continue Reading SEC Disbands Climate and ESG Task Force

In recent months, many companies have found themselves under fire from conservative advocates for their stances on ESG-related issues. At the same time, other companies have found themselves facing litigation based on allegations that they have overstated their green credentials (a set of allegations sometimes called “greenwashing”). As two recent cases show, companies can face challenges and potential liability over their sustainability claims.Continue Reading Beverage Companies Face Scrutiny Over Their Green Claims

Here at The D&O Diary, we track new securities class action lawsuit filings to identify emerging litigation trends and to track filings that reflect existing trends. Every now and then, we spot new suits that reflect multiple different trends in a single complaint. A new securities lawsuit filed earlier this week against Chinese online retailer PDD Holdings (formerly known as Pinduoduo) is an example of one of these multi-trend suits. As discussed below, the lawsuit shows how privacy-related issues, cybersecurity issues, and geopolitical issues can translate into securities class action litigation. A copy of the August 13, 2024, complaint against PDD can be found here.Continue Reading Online Retailer Hit with Privacy, Security, and Forced Labor-Related Securities Suit

In an unusual lawsuit that pairs individual wrongful termination allegations with class action securities law claims, a former employee and present shareholder of a unit of the UK-based publishing and data analytics firm RELX PLC alleges that the company fired him in retaliation for raising concerns about the company’s “greenwashing.” He also alleges that the company misled investors about the company’s climate commitments and its climate-related actions. The complaint alleges that the company made public commitments to climate remediation but at the same time continued to engage in business activities contrary to these commitments. As discussed below, this new lawsuit, although unusual, underscores the fact that climate related allegations, including greenwashing allegations, continue to represent a significant potential source of D&O liability. A copy of the August 6, 2024, complaint can be found here.Continue Reading Publishing and Data-Analytics Firm Hit With “Greenwashing” Securities Suit

Nelson Kefauver

In the following guest post, Nelson Kefauver, Head of Profin Underwriting at Intact Insurance, takes a look at how three frequent industry predictions from the recent past have turned out.  Nelson’s comments are specific to the private and non-profit D&O insurance space and not do not refer to the public company D&O insurance…

The directors’ and officers’ liability environment is always changing, but 2023 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2024 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2023, with a focus on future implications. Please note that on Thursday, January 11, 2024 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2023. Registration for the webinar can be found here. I hope you can join us for the webinar.Continue Reading The Top Ten Stories in D&O of 2023