Institute to address such key ESG issues as sustainability and fiduciary duty, climate change and securities law, international whistleblowers, limits on executive compensation, and corporate responsibility in developing countries; socially responsible investments worldwide account for $23 trillion in assets; group includes nine prominent board members representing leading US and European institutional investors
Leading investor law firm Grant &Eisenhofer announced the launch of a new ESG Institute, a global thought leadership and advocacy group focused on legal considerations surrounding environmental, social and governance issues in institutional investing. The ESG Institute debuts as G&E marks its 20th anniversary as an advocate for investors internationally.
Interest in sustainable and responsible investment continues to accelerate: in the past three years, global assets in the sector have soared by 25% to $23 trillion, according to the Global Sustainable Investment Review.
“Grant &Eisenhofer has built its legacy in corporate governance with a commitment to responsible investment, over the course of 20 years of actively protecting and promoting the rights of institutional investors and public entities,” said Co-Managing Director Jay Eisenhofer. “The new ESG Institute continues to build on this record, to address the increasing dialogue around ESG criteria and objectives within the global institutional investment community.”
Mr. Eisenhofer noted that investment policies integrating ESG factors express investor values advancing sustainability, human rights, humane working conditions and strong corporate governance, while limiting the spread of nuclear and chemical weapons, carbon emissions and fossil fuel usage. “ESG investors are looking to make investment decisions that can help tackle social or environmental problems,” he said.
“Board-level engagement and shareholder activism are further strategies used by investors to influence corporate behavior driven by ESG guidelines,” said Mr. Eisenhofer, noting that some ESG investors focus on reining in abuses and excesses in executive compensation. More recently, ESG investors have called on companies to take a more assertive role in safeguarding personal data in the face of numerous high-profile data breaches and hacks.
The Institute’s nine-person oversight board comprises prominent names in corporate governance and investor rights in the US and Europe. Its members include: Deirdre Hykal, Managing Director and General Counsel with financial services giant TIAA; New York City Assistant Comptroller for Corporate Governance and Responsible Investment Michael Garland; Prudential Financial Chief Governance Officer and Corporate Secretary Peggy Foran; GMB Trade Union legal officer Maria Ludkin; and ValueEdge Vice Chair and corporate governance guru Nell Minow. Also joining the board are former ranking officers of several large European public pension funds.
G&E Co-Managing Director Stuart Grant said, “A key part of the ESG Institute’s mission is to provide thought leadership. The objective is to continuously address legal issues that investment officers and shareholders are grappling with in implementing sustainability considerations and responsible investment criteria. We’re fortunate to be launching the new institute with a close-knit board of genuine authorities in impact investing and corporate governance, representing diverse perspectives from the worlds of global asset management, public pension funds, nonprofits and corporations. Their insights will help guide the institute’s development as we begin to host events and tackle issues core to the global ESG community.”
Among the legal issues to be addressed by the Institute in developing its programs and content:
- Fiduciary duty and integration of ESG criteria such as sustainability in investment
- The relationship between climate change and securities laws
- Corporate accountability and liability involving cybersecurity and protection of consumer data
- Corporate legal responsibility for activity in developing countries
- International whistleblower developments
- Legal challenges to limit executive compensation
ESG topics will also form a centerpiece panel at this year’s Global Shareholder Activism Conference, supported by Grant &Eisenhofer through the Institutional Investor Education Forum. This year’s program will be held at the St. Regis Hotel in New York on November 30-December 1, with members of the ESG Institute presenting: http://www.iief.org/event/2017-global-shareholder-activism-conference/.
Attention to ESG criteria is one aspect of responsible investment strategy, which includes the belief that investors can deploy capital and shareholder votes in a way that urges companies to behave responsibly and ethically, in the treatment of workers and their supply chains, their relationship with the environment and their general business practices. Significant research exists demonstrating that companies with stronger ESG profiles are less exposed to scandal and ultimately deliver better returns for shareholders.