Human rights supply chain due diligence and ESG reporting principles that have been voluntarily adopted by asset managers and companies are now being embedded as minimum standards in global laws and benchmarks, with international policymakers and regulators pushing for more consistent ESG reporting and supply chain due diligence.
A suite of new and pending ESG laws in the EU and enhanced global regulatory focus on ESG reporting mean that businesses who have exposure to EU and global markets will need to take steps to identify their ESG risks and assess their ESG disclosure obligations and supply chain due diligence risks from a human rights perspective. Corporates are also facing increasing pressure from stakeholders to accurately disclose the ESG impact of their business. Businesses should act now to ensure they are ready for the new and impending legislation.
These new and prospective ESG legal obligations, combined with activist stakeholders increasingly holding companies to account and intensifying public scrutiny of ESG issues, will lead to increased litigation, enforcement and reputational risks for businesses, such as the risks of regulatory and investor actions for misleading and inaccurate ESG disclosures or “greenwashing” by issuers, and climate-related litigation brought by stakeholders and non-governmental organisations against companies for ESG failures.
Dechert’s leading global investigations, compliance and litigation lawyers help companies minimize their exposure to ESG-related litigation and enforcement risks by conducting ESG and human rights supply chain audits, enhancing compliance programs to manage ESG risks and advising on ESG reporting requirements and standards.
How Can Dechert Help?
We provide clients with legal, regulatory and business advice on ESG compliance and risk management, including:
- ESG risk management and compliance audits:
- Assisting and advising on testing, measuring and mitigating ESG and human rights supply chain risks.
- Advising on the integration of ESG and supply chain controls into existing compliance frameworks.
- Preventative and reactive risk-based ESG investigations.
- Drafting ESG and human rights policies, codes of conduct and management plans, including antitrust compliance assessments where necessary.
- Reviewing the adequacy of third-party contractual representations and warranties for ESG and human rights risks.
- Advising on transactional due diligence regarding potential ESG risks in M&A transactions, together with other compliance risk areas, such as financial crime.
- Investigations: Our world class global investigations team are experts at conducting risk-based investigations and representing companies facing the threat of external enforcement action.
- Data reporting: Reviewing and advising on the quality and accuracy of ESG and human rights disclosure data and statements for internal and external reporting to investors and regulators.
- Litigation risk management: Our cross-border litigation team can advise on how to manage potential exposure in this area.
- Reputation management: Working with media and press teams to develop strategic “break glass” responses to adverse media inquiry or events.