Environmental, Social, and Governance (ESG) originated as an investing framework1 that brought a broad range of what have traditionally been considered nonfinancial factors into financial decision-making and risk analyses. ESG expands corporate accountability beyond shareholders to include external stakeholder expectations on factors that include (among many others) climate change, use of consumer data, and racial justice— broadly grouped into the three buckets of environmental, social, and governance.

The significant increase in attention to ESG is largely the result of increased investor interest in climate risks, along with increased regulatory activity. These two factors signal a market shift away from sustainability as a marketing tool and toward recognizing environmental, social, and governance metrics as meaningful business metrics.

This article addresses some of the challenges and opportunities that ESG presents for legal service providers and their clients.

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