Most of the recent environmental, social, and governance (ESG)-related headlines focus on the SEC’s developing agenda under the leadership of Chair Gary Gensler, but developments in private litigation also warrant close attention. While many of the first-generation lawsuits—which focused largely on corporate board diversity—have been dismissed for failure to state a claim, companies should remain vigilant. Indeed, as putative plaintiffs incorporate lessons learned from early defeats and expand the scope of ESG litigation, market participants should continue to be mindful of ESG disclosures.

The Climate Change Roots of ESG-Related Litigation

ESG lawsuits have long predated both the SEC’s recent focus on ESG enforcement and rulemaking as well as the current wave of shareholder litigation focused on corporate diversity. Historically, high-profile ESG-related litigation often involved climate change actions against issuers in the natural resources industry. 

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