COVID-19, ESG and general counsel....

A recent study has identified 6 ways in which ESG has grown more important for corporates and their general counsel in the wake of COVID-19, and why lawyers are increasingly helping corporates design and implement ESG programs. Here is a quick summary:

- The dramatic change in our work and personal lives as a result of COVID-19 gave us an opportunity to recognize both the problems and potential solutions arising from climate change, social unrest and governance failures. We have seen that managing the impact of these risks has the potential to yield meaningful, positive results.

- Investors at all levels are focused like lasers on ESG and they are investing capital and demanding information. Governments (mostly outside of US) also are pressing for increased disclosures by corporates.

- ESG investing does not necessarily mean sacrificing returns, and evidence suggests that climate and societal risks are just as important as economic and geopolitical risks. Natural disasters, cyber-breaches and discrimination litigation could all result from failing to understand and manage ESG issues, causing harm to corporate franchises.

- Generally, in-house counsel can connect different pieces of the corporation to ensure adoption of firm-wide policies in an efficient and coordinated way. Counsel can make sure that governance is sensible and disclosures are accurate.

- If ESG is incorporated into an effective governance regime, an entity's resilience and adaptability is enhanced, making it better able to handle crises or other shocks caused by ESG matters.

- ESG disclosures (or lack of disclosure) are subject to second-guessing and litigation, and thus is a risk that should be managed by counsel.

In-house legal and compliance staff, it's coming your way (if it hasn't already).