Environmental, Social, and Corporate Governance: Not Simply a Responsibility

Key Takeaways

• ESG is a sweeping paradigm shift that not only values corporate transparency, but also unapologetically demands it

• Industrial players who hope to thrive and survive in the new ESG-conscious global economy must pay attention to the chatter surrounding decarbonization, carbon-capture, sequestration, and net-zero goals

• By incorporating Natural Capital into business models, companies will not only realize profits but also achieve ESG benchmarks

• Federal and state legislation is trending toward heightened regulatory action concerning pollution and waste output; therefore, industry should take steps to become better aligned with investor and consumer concerns

• Clean-Tech may bolster the corporate bottom line

Environmental, Social and Corporate Governance is not simply a responsibility, it’s an ethos. Five months ago, we embarked on a journey to investigate the new sustainability equation—ESG—and narrate its impact on business. What we learned is that ESG is a sweeping paradigm shift that not only values corporate transparency but also demands it.

In the most fundamental sense, ESG represents a set of environmental, social and governance standards for corporate operations that examines how a company performs as a steward of the environment. Theoretically, under the ESG model, companies that recognize the importance of adapting to changing socio-economic and environmental conditions by implementing zealous quantitative analyses focused on the three pillars will be better able to leverage risk in a culture that demands transparency on sustainable and socially responsible practices and ranks corporate viability according to the new equation. This analysis, or snapshot into a company’s environmental, social and governance practices, is said to better inform investment decisions by de-risking the financial matrix. This level of comprehensive transparency is considered crucial for investors and other stakeholders in understanding how a business is performing today as well as its resiliency tomorrow.

Below are links to articles highlighting the trending issues that all businesses—regardless of size or sector—must be acutely mindful of amid the ESG climate of full disclosure:

• “The Importance of ESG Consideration for Corporate Management’s Current and Future Business Models,” co-authored by John F. Parker and George H. Buermann

Why cultivating a strategy to increase a company’s ESG aptitude is essential to corporate durability.

• “Stationary Source Emission Regulations: Why Businesses Stand to Benefit from Anticipatory Action,” co-authored by Rosemarie C. Hebner and George H. Buermann

Industries need to be tenacious in their efforts to reduce carbon emissions in order to endure the effects of the rising social cost of carbon.

• “Natural Capital: A Paradigm Shift in Valuing the Environment” co-authored by John F. Parker and George H. Buermann

An exposé on the relationship between economic growth and environmental conservation and how Natural Capital conjoins the two.

• “Turning Trash into Treasure: The Fiscal Case for Revisiting Pollution and Waste Management,” by Scott M. Press

Reducing waste generated from emissions, packaging, and electronic devices will help businesses mitigate cost and withstand ESG scrutiny.

• “The Growth of Profitability in Environmental Opportunities: Where Businesses Should Look to Maximize Fiscal and Social Benefits,” by Oliver E. Twaddell

How clean tech can promote profitability.

Stay tuned in the upcoming months as we explore diligent ESG practices and dive deeper into the next phase of ESG investing and its focus on the climate.

For more information or immediate guidance, please reach out to our Environmental Law team:

• John F. Parker
• George H. Buermann

*The authors were assisted by legal interns and University of Buffalo student Colin M. Jackson.