ESG Investing: The Legal Framework
How Environmental, Social, and Governance criteria are reshaping fiduciary duties and investment mandates.
Investing with Purpose and Profit
ESG is no longer a niche; it is mainstream finance. But with popularity comes scrutiny.
Fiduciary Duty Evolution
Traditionally, fiduciary duty meant maximizing short-term returns. The modern interpretation requires considering long-term material risks, including climate change and social unrest. Ignoring ESG factors is now seen as a failure of fiduciary duty.
The Anti-ESG Backlash
In the US, a fractured regulatory landscape sees some states mandating ESG divestment while others require it. Asset managers need bespoke legal strategies to navigate these conflicting mandates.
Standardization of Metrics
The lack of standardized ESG metrics leads to confusion. We advise relying on established frameworks like SASB and TCFD for reporting to ensure credibility and comparability.