ESG: The rise of private ordering and the role of the NCGC committee (United States)

DLA Piper's handbook

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ESG Handbooks and Guides

Corporate Governance Alert

COVID-19 Alert

By:

It is clear that the 2020 proxy season will be dominated by environmental, social and governance (ESG) issues.

The level of scrutiny being given to this topic is not surprising given the public statements of several large influential investors and the revised statement of the Business Roundtable. It has been suggested that the revised BRT Statement on the Purpose of a Corporation represents a paradigm shift towards a more stakeholder-driven approach to governance. A public company’s ESG performance presents “important opportunities to mitigate risk and to drive long-term value by integrating material ESG topics into corporate strategies, elevating board acumen, improving governance quality, and enhancing communication with shareholders and stakeholders.”

In addition, the coronavirus disease 2019 (COVID-19) pandemic has numerous ESG implications, particularly with respect to health and safety, human capital management, supply chain management and the adoption of sustainable business practices for both the short- and long-term new normal.  Boards and management are actively grappling with these issues and are refining how they define and address ESG in this unprecedented environment.

We created this inaugural ESG handbook to help public companies as they develop and maintain a robust ESG program. This handbook is part of our 2020 Proxy Season Hot List series, which we expect to periodically update. In this handbook, we set the stage by discussing topics likely to play a crucial role in the 2020 proxy season related to ESG matters. Next, we examine the role of the nominating and corporate governance committee (NCGC) in this important area. We conclude by presenting our thoughts on some practical aspects of ESG related to several of our practice areas.

This handbook is a cumulative effort of many of our lawyers, and we welcome the opportunity to discuss ESG-related topics with you during the 2020 proxy season and beyond.

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