Environmental, Social and 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.

Click here for the digital brochure.


EVENTS

Practical Guidance for ESG Incorporation in DC Plans
December 15, 2020
Hosted by the DCIIA, this webinar discusses unique perspectives on topics including:
- How plan sponsors approach ESG integration discussions with their Investment Committee
- What steps plans are taking to formalize their ESG criteria and how this is monitored by both the plan sponsor and their consultant
- What a plan sponsor and their investment consultant need to document to show they are methodical in their consideration of the basis of the material ESG factors within their investments
- The range of implementation decisions that are made and recommendations to apply when integrating ESG
- How plan changes are communicated to participants. 
Learn more about the event here.

Renewable Energy Technologies and U.S. Innovation Webcast
December 9, 2020
President-elect Biden’s agenda is likely to include an increased focus on tax incentives directed at investment in renewable energy resources, though gaining congressional support may pose either a challenge or an opportunity for a grand deal. President-elect Biden’s renewable energy tax policy revolves around his stated goal for the United States to achieve net-zero carbon emissions by 2050. In support of this goal, he plans to modify and extend renewable energy tax incentives in order to help achieve carbon pollution-free electricity generation by 2035. President-elect Biden’s renewable energy tax policies include restoring the solar investment tax credit and expanding tax incentives for carbon capture, storage and use. If President-elect Biden implements his policies, will they lead to enhanced U.S. innovation? If the Senate remains a Republican majority, what compromises might Republicans seek, and what roadblocks might they impose on Biden’s agenda? Register here.

Compliance’s Role in ESG Investing and Corporate Engagement
October 21, 2020
As ESG investing is moving more into the spotlight, it is important for compliance professionals to ensure it incorporates a firm’s fiduciary duty to its clients. This session will include a discussion on how best to implement and manage ESG investing and corporate engagement topics at your firm. Read more here.
 

INSIGHTS

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.

Key Considerations: DOL’s New Final Regulation on ERISA’s Investment Duties (ESG-Related or Not)
November 11, 2020
DOL releases final rule that materially affects the investment duties of all ERISA fiduciaries, including those that consider ESG factors. George Michael Gerstein covers the rule and its implications. Read the Client Alert here.

NJ Governor Signs Environmental Justice Legislation Placing New Requirements on Facilities Operating in Overburdened Communities
September 21, 2020
Gov. Phil Murphy signed environmental justice legislation intended to address the disproportionate impacts of pollution on communities by restricting certain industrial operations from entering or expanding in those communities. Read the Client Alert here.

NEWS

Biden to Order Review of DOL’s ESG Rule January 21, 2021
President Joe Biden plans to sign a slew of executive orders, including one that will ask the Department of Labor to review a recently finalized rule that curbs the use of ESG investments with retirement plans. Read the Ignites article here.

Proxy Voting - SEC Rule May Stop New ESG A Look Inside Four Proposed ESG Standards
Dece
mber 30, 2020
Sara Crovitz quoted in Ignites discussing proposed ESG frameworks for reporting standards. Read the full article here.

Has the DOL Found an ESG Middle Ground?
November 30, 2020
George Michael Gerstein, an ERISA attorney with Stradley Ronon, dissects the DOL’s final rule regarding ESG investing in retirement plans, calling it a compromise that might be here to stay. Read the Plan Adviser article here.

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