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I’ve been thinking about environmental, social, and governance issues (“ESG”) for almost twenty years — long before they became mainstream. As an in-house lawyer at a public company prior to joining academia, I had no choice. I teach, research, and consult on these issues now and have a whole lot of thoughts about them, which I’ll share in coming posts. 

I had the honor of presenting on “ESG and India in 2022” yesterday. ESG is a hot topic in India, as it is everywhere – – I have either attended or spoken on half a dozen panels on ESG this year to introduce the topic to lawyers. If you’re not familiar with the term or think it’s completely irrelevant to what you do for a living, here are some common classifications for investors that integrate ESG into their portfolio selection and investment process. 

Environmental: climate change, water, alternative energy, pollution & waste management

Social: human rights, workplace standards, worker health safety, diversity & equal opportunity, labor relations, land grabs

Governance: bribery & corruption, board diversity, corporate political contributions, executive compensation, disclosure & transparency, board independence, tax avoidance

If you’re a transactional lawyer, chances are you or your clients…

I’m so excited to present later this morning at the University of Tennessee College of Law Connecting the Threads Conference today at 10:45 EST. Here’s the abstract from my presentation. In future posts, I will dive more deeply into some of these issues. These aren’t the only ethical traps, of course, but there’s only so many things you can talk about in a 45-minute slot. 

All lawyers strive to be ethical, but they don’t always know what they don’t know, and this ignorance can lead to ethical lapses or violations. This presentation will discuss ethical pitfalls related to conflicts of interest with individual and organizational clients; investing with clients; dealing with unsophisticated clients and opposing counsel; competence and new technologies; the ever-changing social media landscape; confidentiality; privilege issues for in-house counsel; and cross-border issues. Although any of the topics listed above could constitute an entire CLE session, this program will provide a high-level overview and review of the ethical issues that business lawyers face.

Specifically, this interactive session will discuss issues related to ABA Model Rules 1.5 (fees), 1.6 (confidentiality), 1.7 (conflicts of interest), 1.8 (prohibited transactions with a client), 1.10 (imputed conflicts of interest), 1.13 (organizational clients), 4.3 (dealing…

I’ve posted on Cuba and business in the past. See here, here, and here, for example.

I have 3,000 pictures of Cuba from my four visits to research and speak on business and human rights. I’ve written three law review articles and met with farmers, judges, lawyers, families of people who have “disappeared,” restaurant owners and others. For the law review articles see, Ten Ethics-Based Questions for U.S. Companies Seeking to do Business in Cuba, The Cuba Conundrum: Corporate Governance and Compliance Challenges for U.S. Publicly-Traded Companies, and You Say Embargo, I Say Bloqueo—A Policy Recommendation for Promoting Foreign Direct Investment and Safeguarding Human Rights in Cuba.

This is a different kind of post. It’s more personal. 

My first visit in 2016 was during the Bienal art festival, where some of the most talented artists in the region had their work featured by the New York Times. I visited some of them in their homes. Later in the trip, I spent time with members of the Florida bar to learn from local lawyers and economists. One lawyer who spoke with us had to move to the US after someone misreported what he…

In 2008, my university (Belmont University) was supposedly the first to offer a social entrepreneurship major. Since then, not only have the schools offering majors in social entrepreneurships grown, but many schools have created centers, institutes, or programs dedicated to the area. Below I try to gather these social enterprise centers in universities. The vast majority are in business schools, some are collaborative across campus, and a few are located in other schools such as law, social work, or design. A few have a specifically religious take on business and social good. Happy to update this list with any centers I missed. 

Lewis Institute at Babson https://www.babson.edu/academics/centers-and-institutes/the-lewis-institute/about/# 

Christian Collective for Social Innovation at Baylor https://www.baylor.edu/externalaffairs/compassion/index.php?id=976437

Center for Social Innovation at Boston College https://www.bc.edu/content/bc-web/schools/ssw/sites/center-for-social-innovation/about/

Watt Family Innovation Center at Clemson https://www.clemson.edu/centers-institutes/watt/

Center for the Integration of Faith and Work at Dayton https://udayton.edu/business/experiential_learning/centers/cifw/index.php

CASE i3 at Duke https://sites.duke.edu/casei3/

Social Innovation Collaboratory at Fordham https://www.fordham.edu/info/23746/social_innovation_collaboratory

Social Enterprise & Nonprofit Clinic at Georgetown  https://www.law.georgetown.edu/experiential-learning/clinics/social-enterprise-and-nonprofit-clinic/

and Beeck Center for Social Impact and Innovation at Georgetown https://beeckcenter.georgetown.edu

Global Social Entrepreneurship Institute at Indiana https://kelley.iu.edu/faculty-research/centers-institutes/international-business/programs-initiatives/global-social-entrepreneurship-institute/

Business + Impact at Michigan https://businessimpact.umich.edu

Social Enterprise Institute at Northeastern https://www.northeastern.edu/sei/

Center for Ethics and Religious…

The ESG movement (or EESG, if you want to follow Leo Strine on this) has been in the business and legal news quite a lot recently.

In a Bloomberg article about the tax perks of trillions of dollars in Environmental, Social, and Governance investing by Wall Street banks, tax specialist Bryen Alperin is quoted as saying: “ESG investing isn’t some kind of hippie-dippy movement. It’s good for business.”

This utilitarian approach to ESG, and social enterprise in general, has made me uncomfortable for a while. The whole “Doing Well by Doing Good” saying always struck me as problematic.

ESG and social enterprise are only needed when the decisions made are not likely to lead to the most financially profitable outcomes. Otherwise, it is just self-interested business.

Over my spring sabbatical, I have been reading a fair bit about spiritual disciplines and the one that is most relevant here is “Secrecy.” The discipline of secrecy is defined as “Consciously refraining from having our good deeds and qualities generally known, which, in turn, rightly disciplines our longing for recognition.” In The Spirit of the Disciplines, Dallas Willard (USC Philosophy) writes, “Secrecy at its best teaches…

My friend and colleague Prof. Victoria Haneman has shared her paper, Menstrual Capitalism, Period Poverty, and the Role of the B Corporation.  Here is the abstract: 

A menstruation industrial complex has arisen to profit from the monthly clean-up of uterine waste, and it is interesting to consider the way in which period poverty and menstrual capitalism are opposite sides of the same coin. Given that the average woman will dispose of 200 to 300 pounds of “pads, plugs and applicators” in her lifetime and menstruate for an average of thirty-eight years, this is a marketplace with substantial profit to be reaped even from the marginalized poor. As consciousness of issues such as period poverty and structural gender inequality increases, menstrual marketing has evolved and gradually started to “go woke” through messaging that may or may not be genuine. Companies are profit-seeking and the woke-washing of advertising, or messaging designed to appeal to progressively-oriented sentimentality, is a legitimate concern. Authenticity matters to those consumers who would like to distinguish genuine brand activism from appropriating marketing, but few objective approaches are available to assess authentic commitment.

This Essay considers the profit to be made in virtue signaling solely for the

…

Cancel culture has been a hot topic for years, so when the University of Miami Law Explainer podcast asked me to talk about it, I had some reservations. I’m not shy, but I’m also not looking to be a headline in our campus newspaper, a meme, or a topic on Fox News. But I have strong feelings about this, and I agreed to speak.

I’m providing the link to the 20-minute interview here. I talked about my history as a radical protestor in college and law school (and my run in with Rush Limbaugh),  the effect of boycotts and buycotts, whether Teen Vogue missed a teachable moment after firing an editor for tweets she made as a teenager, whether corporations are doing the right thing when they bow to pressure from vocal consumers, the uproar over the 1619 project, and more. If you want a break from drafting contracts or writing exams, take a listen and let me know what you think. 

As regular readers of the blog know, my passion is business and human rights, particularly related to supply chain due diligence and disclosure. The ABA has just released thirty-three model clauses  based on the United Nations Guiding Principles on Business and Human Rights, and the OECD Due Diligence Guidance for Responsible Business Conduct. The ABA committee’s reasoning for the model clauses is here:

The human rights performance of global supply chains is quickly becoming a hot button issue for anyone concerned with corporate governance and corporate accountability. Mandatory human rights due diligence legislation is on the near-term horizon in the E.U. Consumers and investors worldwide are increasingly concerned about buying from and investing in companies whose supply chains are tainted by forced or child labor or other human rights abuses. Government bodies such as U.S. Customs and Border Protection are increasingly taking measures to stop tainted goods from entering the U.S. market. And supply chain litigation, whether led by human rights victims or Western consumers, is on the rise. There can therefore be little doubt that the face of global corporate accountability for human rights abuses within supply chains is changing. The issue is “coming home,” in other…

Please join me for this ABA Conference on February 10-11. I’m excited to serve as a mock board member on the 11th as well as on the plenary panel on “Leading Voices in ESG Initiatives” with representatives from United Airlines, Microsoft Asia, and others focusing on the many and sometimes conflicting imperatives of implementing ESG goals. I’ll be particularly interested in the session by the General Motors GC, who will speak about the plan to go away from gasoline-powered vehicles, which GM just announced.

You can register by clicking here.

About the Virtual Conference:

The state of New York, on December 9, 2020, announced that its pension fund with over $226 billion in assets would divest its oil and gas stocks in companies that, in its view, contribute to global warming. The announcement emphatically highlights how ESG factors (Environmental, Social and Governance) across borders represent business risks but also opportunities for companies, their stockholders, and their other stakeholders. In-house legal departments are the first line of defense to re-orient business operations to address global ESG issues and to identify risks. These challenges, risks and opportunities are creating additional demands on legal departments with constrained resources as they navigate this…

In my previous post on the “Study on Directors’ Duties and Sustainable Corporate Governance” (“Study on Directors’ Duties”) that Ernst & Young prepared for the European Commission (Commission), I focused on the transformative power of corporate governance. I said that stakeholder capitalism would have a practical value if supported by corporate governance rules based on appropriate standards such as the ones provided by the Sustainable Development Goals (SDGs).

Some of my pointers for the Commission were the creation of a regulatory framework that enables the representation and protection of stakeholders, the representation of “stakewatchers,” that is, non-governmental organizations and other pressure groups through the attribution of voting and veto rights and their members’ nomination to the management board (similar to German co-determination). I also suggested expanding directors’ fiduciary duties to include the protection of stakeholders’ interests, accountability of corporate managers, consultation rights, and additional disclosure requirements.

In my last guest post in this series dedicated to the Study on Directors’ Duties, I ask the following questions. Do investors have a moral duty to internalize externalities such as climate change and income inequality, for example? Do firm ownership and investor commitment matter? Should investors’ money be “moral” money? …