What are ESG Class Actions?
ESG class actions are legal proceedings that focus on alleged violations of ESG (Environmental, Social & Governance) principles by corporations. ESG class actions involve groups of investors or stakeholders collectively filing a lawsuit against a company, asserting that the company has failed to meet its environmental, social, or governance commitments, and that this failure has negatively impacted stakeholder interests.
With ESG class actions, claimants typically allege that the company has engaged in practices that either misled stakeholders about its ESG performance or violated applicable regulations and standards. These actions may pertain to issues such as environmental pollution, labour disputes, diversity and inclusion policies, executive compensation, or more often, knowingly un-ethical corporate governance.
ESG class actions are part of a broader trend in which investors and stakeholders are increasingly holding companies accountable for their ESG practices and disclosures. These actions also enable stakeholders to seek remedies for any financial losses suffered by them as a result of the disclosure of the alleged ESG-related misconduct.