Radha Curpen comments on Canadian Lawyer's look at how the risks of ESG-related lawsuits have increased in light of climate change and social movements.

“People have to be mindful of the fact that ESG isn’t just voluntary,” says Radha Curpen, Vancouver managing partner for Bennett Jones LLP and co-head of the firm’s environmental and Aboriginal Law group. “It’s important to remember [that] there’s a legal foundation for ESG,” that is “supported by legislation, and is supported by the common law.”

A recent Bennett Jones report, Defining and Driving ESG Within Your Organization, notes that “over the last few years, we have seen an increase in the number of shareholder proposals, litigation and regulatory action being commenced in relation to ESG-related disclosure.” This can relate to:

• a perceived failure by organizations to include in their public disclosure an adequate response to ESG matters;
  
• inconsistent disclosure or the failure to inform stakeholders of ESG matters that are viewed by such stakeholders as material to business operations
  
• a perceived failure by organizations to include in their public disclosure an adequate response to ESG matters; and
  
• inconsistent disclosure or the failure to inform stakeholders of ESG matters that are viewed by such stakeholders as material to business operations.

“More shareholder proposals around ESG disclosures can be expected in the future, as well as litigation and regulatory action,” the authors noted in their report.