Environmental, Social, and Governance: The Business of Law

• Pages: 27-28
• Date: 01 January 2023
• Author: Daniel S. Wittenberg
• Subject Matter: Civil Law

Change is not just possible. It is our prerogative.

It is our mandate to change ourselves and to be

change activators for our profession and our

clients. Environmental, social, and governance

(ESG) adoption is on the rise, driven by cli-

ent demand and a desire to make an impact. The pandemic

and economic, public health, and social justice crises have

impelled interest on the part of investors and corporate stake-

holders toward sustainable investing, making them focus

more on ESG issues. In turn, these businesses—our clients—

are raising the stakes and expecting law rms to likewise

commit to ESG. Besides counseling businesses on ESG issues,

clients now expect their lawyers to walk the ESG walk.

By the Numbe rs

Sustainable investing set records in 2021, and ESG assets

are set to swell to $50 trillion by 2025. Last year, sustain-

able funds witnessed a net inow of $51 billion, which is

more than double the total for 2019 ($21.4 billion) and a

ten-fold growth from 2018’s $5.4 billion. Mutual funds and

exchange-traded fund (ETFs) lured a net $120 billion in the

rst half of 2022, according to Morningstar data. Of the $10

trillion within the ETF marketplace, approximately $25 bil-

lion is allocated to ESG-themed funds, representing 8 percent

of total inows. At this point last year, roughly nine ESG

funds had launched; 2022 has seen approximately 20 ESG-

centric funds launched and an inux of ows into these sus-

tainably minded ETFs.

ESG: What Is I t?

ESG stands for environmental, social, and governance. It is a

group of factors that assess and measure how an organization

impacts the environment and society. The goal of ESG is to

capture all the nonnancial risks and opportunities inherent

in a company’s day-to-day activities. ESG is a set of values for

how a company operates in regard to Earth and its people.

Environmental criteria examine how a company performs

as a steward of the planet. They include issues focused on cli-

mate risks, carbon emissions, energy efciency, use of natural

resources, pollution and biodiversity, waste management, and

water usage. Social criteria examine how a company manages

relationships with employees, suppliers, customers, and the

Environmental, Social, and

Governance: The Business of Law

By Daniel S. Witt enberg, Litigati on News Asso ciate Editor

© Getty Image s

WINTER 202 3 • VOL. 48 NO. 2

27 | ABA LITIGATION SECTIO N

BUSINESS OF LAW

Published in Litigation News Volume 48, Number 2, Winter 2023. © 2023 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or

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