ESG continues to drive litigation risks as plaintiffs from both ends of the political spectrum line up to challenge companies on ESG practices. Historically, the bulk of ESG litigation emerged primarily from environmental and climate issues, but new survey data from Norton Rose Fullbright’s Annual Litigation Trends Survey show social issues taking the spotlight with DEI as a major driver:
“Amid ongoing DEI backlash, 79% of ESG-concerned respondents predict that in 2025 they will be more exposed to disputes involving the social aspects of ESG – encompassing DEI policies and practices, labor rights, and product and workplace safety – compared to 58% who said the same the previous year. This 21-percentage-point jump led social exposure concerns to surpass environmental (selected by 75%), marking a notable departure from historical trends.”
The new administration is causing an uptick in DEI litigation risk along with other legal developments empowering state AGs to bring anti-DEI enforcement actions. At the same time, DEI proponents are gearing up to take action including new DEI shareholder proposals. Costco and Apple both pushed back against anti-DEI proposals which where defeated in a landslide – 2% for the proposal, 98% against. As usual, ESG becoming a political football lands companies in the crosshairs, and corporations expect more litigation to arise from social issues.
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