Quinn Emanuel is at the forefront of the emerging field of disputes implicating “ESG”—Environment, Social, and Governance—issues.  ESG refers to specific data meant to be used by investors to evaluate the material risk of a given organization, based on the externalities it is generating. ESG is about how an organization understands the way in which societal issues will impact upon ability to deliver strategy and to create value for shareholders and stakeholders. Further, ESG attempts to characterize how to manage investment risks from the constant fluctuations of climate change and the world more generally. ESG legal practice is very diverse and may encompass climate-change litigation, advice on related changes in securities laws and disclosure issues and enforcement actions, lawsuits against governments or companies about their environmental policies, lawsuits alleging misrepresentation and fraud or investigation about a product, and investigations or legal action relating to labor standards and supply chains, etc.

As a best-in-class, multi-disciplinary practice, we act in ESG-related disputes around the globe and also advise businesses on how to identify and address ESG and human rights risk in their operations and supply chain. Our expertise is truly international and cuts across sectors—from telecommunications, FMCG, technology and artificial intelligence to construction and engineering and the extractive sector.

As issues of sustainability and corporate citizenship dominate the headlines, consumer demand for ESG investments has surged. A recent Bank of America survey found that 40% of investable assets are now said to be ESG friendly or compliant. In 2022, PwC announced that asset managers are expected to increase ESG-related assets under management to USD 33.9 trillion by 2026 from USD 18.4 trillion in 2021. Bankrate found that ESG considerations are considered by 89% of investors when making investment decisions.

Meanwhile, governments increasingly mandate ESG disclosures; for instance, the European Union’s March 2021 Sustainable Finance Disclosure Regulation imposes obligations on fund managers, financial advisors and certain other firms in the E.U. to disclose information on various ESG considerations to potential investors and on their websites. Similar type of regulations are being considered in the US and the UK. For instance, the UK has indicated that it will adopt the recommendations made by the Task Force for Climate-related Financial Disclosures to make climate-related financial disclosures mandatory for certain firms by 2025, positioning itself as a market leader in this area.  In 2021, the United States  Securities and Exchange Commission (“SEC”) announced the creation of a Climate and ESG Task Force in the Division of Enforcement to identify ESG-related misconduct, including analyzing disclosures relating to investment advisers’ and funds’ ESG strategies. The SEC’s Division of Examinations also announced that one of its annual examination priorities would be to review ESG funds’ advertising for false and misleading statements.  In March 2024, the SEC adopted rules to enhance and standardize climate-related disclosures by public companies and in public offerings. Given the exponential rise in ESG marketing and disclosures, we are likely to see even more government enforcement efforts and civil suits both attempting to ensure compliance with ESG standards and to police the accuracy of ESG disclosures.

In July 2024, the European Union formally adopted the Corporate Sustainability Due Diligence Directive (“CSDDD”), which along with other related EU directives in the ESG space is expected to establish a framework for increased corporate reporting and expanded obligations in relation to human rights and environmental impacts in business’ value chains. The CSDDD, whose scope not only includes EU companies but also non-EU companies with a certain turnover in the EU that operate in high risk sectors, is expected to require public disclosures on the due diligence measures that companies have in place in their operations and value chains in Europe and beyond. The CSDDD must be transposed by Member States into national law by 26 July 2026.

The increase in mandatory and voluntary ESG disclosures—and concomitant scrutiny of those disclosures—creates implications for both legal risk and reputational risk. The best way for businesses to address these concerns—as well as to future-proof against upcoming due diligence legislation—is to take action now to address ESG concerns. Our firm brings to bear multiple capabilities in this regard:

Disputes

Led by Chambers-ranked London partner Julianne Hughes-Jennett, the team has acted in some of the most important disputes in the field: in prosecutions for corporate complicity in crimes under international law brought by several European states; in “parent company liability” and duty of care cases in the English Courts; in class actions brought under the Alien Tort Statute in the US; in complex supply chain disputes involving legal entities in multiple jurisdictions which raise novel questions in tort law and unjust enrichment; in National Contact Point Communications pursuant to the OECD Guidelines for Multinational Enterprises in several States; and in communications made by UN Special Procedures mandate-holders. Our team has world-class expertise in issues of extra-territorial jurisdiction and conflict of laws—critical to cases which involve the responsibility of multinationals headquartered in North America or Europe for impacts which occur overseas. And we have deep knowledge of the legal issues that can arise when businesses operate in conflict zones.

Crucially, we understand how these disputes play out in the public domain. Our experience allows us to tailor a litigation strategy to your specific context and to ensure that it complements your public relations and wider stakeholder engagement strategies. Where appropriate, we can advise on operational grievance mechanisms which are consistent with international human rights standards and which protect your legal rights.

Internal investigations and crisis management

If an organisation is associated with an ESG impact, it needs to act quickly to understand what happened and respond with confidence. We understand that the decisions it makes in these early days can have huge, long-term significance—for the business’s reputation and legal exposure and for the affected rights holders. We have the right blend of expertise to help you get these decisions right. We have run internal investigations which span multiple jurisdictions, conflict zones and complex corporate structures. We can deploy large teams into challenging environments at short notice, engage with internal and external stakeholders and help you to establish what happened and where responsibility lies. We can place this into the appropriate legal framework so that you understand any litigation risk and we can advise on the appropriate response under internationally recognised human rights standards.

Advisory

Drawing on our deep knowledge of how ESG risk to a business’s stakeholders can create legal risk for the business, our advisory practice helps businesses to identify ESG issues in their operations and supply chains and implement practical and effective systems to prevent them from materialising. We carry out ESG impact assessments and ESG due diligence. We support businesses to comply with the growing web of legislation in the field, from the Modern Slavery Act in the UK and Australia to the Duty of Vigilance Law in France. We also guide businesses to anticipate changes in the legislative landscape, such as the CSDDD and proposed legislation in multiple national jurisdictions, by providing practical advice to help future-proof business operations and so that they can plan accordingly. Unlike many law firms, we can go beyond legal compliance and support businesses to substantively engage with ESG issues—thus reducing the ESG risk to rights holders and the legal and reputational risk to the business. Our team offers a blend of legal and consultancy expertise, enabling us competitively to offer a full service to our clients.

Chambers Global recognises us for our unusual mix of disputes and advisory work, describing Julianne Hughes-Jennett as a "passionate and driven practitioner" known for her "great deal of work in dispute resolution and human rights due diligence” and acknowledges her as a "very steady hand in guiding clients" on international human rights issues and liabilities.