Anti-ESG has been busy, and more states are passing and enforcing anti-ESG laws. One of the core arguments used by anti-ESG is that by focusing on ESG factors, companies are diminishing financial returns – a breach of fiduciary duty. The strategy was employed to great success earlier this year in Spence v. American Airlines. In this case, a Texas judge ruled that American Airlines violated its fiduciary duty by allowing BlackRock to consider non-financial factors when managing American’s 401(k) retirement plan. Similar pressure exists on the pro-ESG side of the aisle as well, where Democrats are pressuring banks that walked away from ESG, alleging that by not managing ESG, these companies are failing in their fiduciary duty.
This political push and pull can leave companies between a rock and a hard place, with many panicking about how to proceed. Rather than blindly moving in one direction or the other based on fear, leaders should consider how sustainability makes financial sense.
Many ESG programs are underdeveloped and unable to show hard-dollar ROI for their efforts. In today’s political climate, that lack of ROI paints a target on your back. Programs that focus on business fundamentals, actual benefits, and opportunity growth are well armed to defend themselves. If a company can show the real returns of its ESG program, it is in a much better place to fly under anti-ESG’s radar. In the event that litigation does arise, these companies have hard evidence to demonstrate that their fiduciary duty was never abandoned.
ESG is rife with business opportunities. From lowering the cost of logistics through better efficiency and improved fuel economy, to putting sustainable products on the market to reach environmentally conscious consumers, there are many ways that sustainable business is good business. The challenge is finding these opportunities and calculating their benefits. This is where PracticalESG.com’s resources come in handy. Members can check out our Practical Methodology for Sustainability ROI Using Company-Specific Business Fundamentals Guidebook and our Simplifying ESG/Sustainability Business Value Guidebook.
Additionally, members interested in ESG litigation can join us on August 12 at 2:00 EST for our upcoming webcast, “ESG Litigation Landscape 2025.” You’ll hear the latest from leading experts on litigation against carbon majors, ESG antitrust litigation, and greenwashing litigation. The discussion will center on developing legal risks and the strategies companies can use to mitigate legal exposure.
Members also save hours of research and reading time each week by using our filtered and curated library of ESG/sustainability resources covering over 100 sustainability subject areas – updated daily with practical and credible information compiled without the use of AI.
If you’re not already a member, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. But it will probably pay for itself before then.
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