Environmental, Social & Governance

Overview

Approximately $30 trillion of the world’s assets are currently managed to account for environmental, social & governance (ESG)
risks and opportunities.


Note: The above are representative examples and not a complete list.

Institutional investors and operating companies big and small continue to see ESG issues as sources of risk and opportunity to their bottom lines. We are witnessing significant global legal developments, heightened regulatory scrutiny and greater stakeholder sensitivity to ESG issues.

Institutional investors, such as ERISA plans, registered investment companies, endowments, foundations and hedge funds, are under increasing pressure to take ESG factors into account in their investment decision-making, proxy voting and shareholder engagement processes. Investment advisers, broker-dealers, family offices and others are also now addressing ESG risks and opportunities with respect to their own firms in response to greater concern by clients and employees.

Operating companies are also sensitive to ESG. Whether it is pursuing renewable energy projects, managing environmental compliance, evaluating sustainable financing opportunities, shoring up their cybersecurity defenses, or embarking on diversity and inclusion initiatives, ESG is at the forefront for many operating companies across industries.

With ESG having gone mainstream, Stradley’s Environmental, Social & Governance Group offers clients a holistic approach to help them navigate this fluid landscape of legal and regulatory developments, stewardship codes, disclosure frameworks and nongovernmental organization (NGO) codes of conduct. Our four pillars are:

 Our ESG Experience Includes:

  • Advising asset managers and fund boards on ESG-related regulatory implications (e.g., disclosure requirements under federal securities laws) and on fund incorporation of ESG considerations into investment strategy and decisions.
  • Advising asset managers that are ERISA fiduciaries on their legal requirements under ERISA with respect to ESG.
  • Advising operating companies on environmental and energy-related compliance requirements.
  • Reviewing and drafting investment policies for trustees/board committees to invest in socially conscious investments.
  • Assisting energy companies in developing alternative energy projects in order to secure regulatory approvals and buy-in from stakeholders.
  • Advising on financing strategies that incorporate ESG.
  • Assisting real estate and other clients on environmental liabilities under US environmental law.
  • Counseling clients on environmental liability issues in bankruptcy proceedings.
  • Assisting clients to evaluate the feasibility of establishing or investing in opportunity zones.
  • Advising clients on federal tax considerations of renewable energy projects.
  • Advising clients regarding compliance issues related to anti-discrimination laws, including the draft of policies related thereto, as well as assisting clients with diversity training. 

EVENTS

Join Aliza Dominey and NextGen D.C. for a Webinar: Trading, Technology, Policy and Markets
July 6, 2021
What lies ahead for trading and technology in the equity markets? Which skills are keys to success in public policy development, securities regulation and advocacy in the financial services industry? Learn more about the event here.

Join Sara Crovitz and Women in ETFs Philadelphia for a virtual panel discussing the rise of ESG investing
June 1, 2021
Please join Women in ETFs Philadelphia at 12:30 p.m. ET on June 16, 2021 for an exciting, topical discussion about the ESG investing landscape: current trends, future outlook and innovations across the financial services industry. Read more here.

Jamie Gershkow Provides the Latest Bond Fund Updates at the Crane Data Bond Fund Symposium
April 5, 2021
Stradley Ronon Partner Jamie Gershkow served as a panelist at the Crane Data Bond Fund Symposium on March 26. Gershkow’s presentation, “Regulatory Update: Latest Bond Fund Issues,” covered updates on money market funds, including potential reforms to the regulation of money market funds; environmental, social and governance (ESG) matters; and the Securities and Exchange Commission’s 2021 examination priorities. Read more about the event here.
 

INSIGHTS

Texas and Maine Approaches to Fossil Fuel Divestment a Cautionary Tale for Investment Managers
June 17, 2021
State and local governmental plans, which are excluded from ERISA, are subject to idiosyncratic legal requirements, including specific investment restrictions. These plans are also not immune to the political winds blowing in that state. Nowhere is this more apparent than recent developments out of the States of Texas and Maine with respect to fossil fuel divestment. Investment managers of any governmental plan, especially those that take environmental, social and governance (ESG) factors into account, should pay close attention to these developments. Private equity and other fund managers, for the reasons stated below, should also take note.
Read the Client Alert here.

DOL to Revisit Trump ESG-Related Rules
March 16, 2021
On March 10, the U.S. Department of Labor (DOL) announced that until further notice, it will not enforce certain final rules published at the tail-end of the Trump administration. Specifically, the DOL will revisit, and, in the interim, will cease to enforce, the “Financial Factors in Selecting Plan Investments” and “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” rules which were published in November and December of 2020, respectively. Read the Client Alert here.

A Framework for the DOL’s New Proxy Voting Rule
January 7, 2021
The U.S. Department of Labor (DOL) has finalized a rulemaking that pertains to proxy voting and the exercise of other shareholder rights with respect to employee benefit plans subject to the U.S. Employee Retirement Income Security Act of 1974, as amended (ERISA). Read the Client Alert here.

NEWS

George Michael Gerstein Weighs in with ThinkAdvisor on the DOL’s Newest Proposed Rules Related to ESG Factors in Retirement Plan Accounts
August 9, 2021
The Labor Department has sent its proposed rules related to environmental, social or governance (ESG) factors in retirement plan accounts to the Office of Management and Budget for review. Labor’s plan complies with an executive order issued by President Joe Biden in May that directs the secretary of labor “to consider publishing by Sept. 2021” proposed rules related to ESG investments in retirement accounts.. Read the article here.

Sara Crovitz Joins Women in ETFs Philadelphia to Examine the Current ESG Investing Landscape
June 16, 2021
Stradley Ronon Partner Sara P. Crovitz served as a panelist on the Women in ETFs Philadelphia virtual event, “What You Need To Know About ESG Investing,” on June 16. The panel explored the ESG investing landscape, including current trends, future outlook and innovations across the financial services industry. Crovitz discussed the rise of ETF products around ESG, potential changes to the regulatory framework, different approaches to ESG, including exclusions, best in class, and active engagement with various companies. Read the article here.

Sara Crovitz and George Michael Gerstein Cover ESG Trends and Regulation with the Mutual Fund Directors Forum
February 26, 2021
Stradley Ronon Sara P. Crovitz and George Michael Gerstein, members of Stradley Ronon’s new environmental, social & governance (ESG) group, served as panelists on the Mutual Fund Directors Forum program, “ESG, Proxy Voting and Engagement – Where DOL and SEC Regulation has Been and Where it May be Going,” on Feb. 25. Crovitz and Gerstein provided updates on the state of current Department of Labor and U.S. Securities and Exchange Commission regulation around ESG and proxy voting/engagement and what may be coming from the regulators under new leadership. Read the article here.

Visit the ESG Group’s Blog for more insights and news.

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