Rebecca Davis Quoted in Risk & Insurance Article on Cargo Transportation Company ESG Programs
On August 21, 2023, AGG Litigation and Environmental partner Rebecca Davis was quoted in a Risk & Insurance article discussing the risks and benefits for cargo transportation companies that publicize a formal ESG platform.
In the article, Rebecca discusses the social and investor pressures that transportation companies face both for and against the ESG movement.
“Oddly enough, there’s a lot of social pressure to make the change, but there’s also pressure to not make the change,” Rebecca said. “We’re seeing pushback with an anti-ESG movement.”
“Especially millennials and Generation Z — as they enter the market, they have a different view of everything,” she said. “That push is going to overwhelm the anti-ESG movement, but I think there is actually some pressure, depending on who the company is and who they service, not to implement some of these changes. There’s a kind of analysis that some companies need to do to weigh the costs and benefits of all the changes.”
Rebecca also advises companies to “plan early and often” in preparation for ESG regulations.
“It’s coming . . . It’s not hard to look at the tea leaves and see [that] more people are going to want to see net-zero carbon, more people are going to want to see fair work practices, they’re going to want to see equality in the office, they’re going to want to see more emphasis placed on DE&I,” she said. “All of that has been happening without regulation. So companies, especially private companies . . . they can go ahead and start planning for these transitions.”
In addition to the anti-ESG movement, a company can potentially receive accusations of greenwashing when making ESG goals public. However, lawsuits alleging share manipulation through ESG are largely uncharted territory.
“So far, those claims have been very hard to prove,” Rebecca said. “However, ultimately, the plaintiffs’ bar is going to figure it out, or there’s going to be a court that allows it. If the company is basically telling shareholders one thing and doing another, it is the basis for a lawsuit.”
Rebecca also states that when that happens, “insurance may actually cover that.”
“It would probably be through a D&O policy,” she said. “But there’s a possibility — and it does happen — that the insurance company is going to cover a greenwashing claim.”
To read the full article, please click here.
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