In recent months, ESG has emerged as a domestic political battleground with businesses and their leadership increasingly caught in the crossfire. Opponents of ESG have coalesced at the state level, enacting legislation targeting the consideration of ESG factors in the investment decisions of state pension fiduciaries and proxy advisors. Such legislation has been buttressed by letters and opinions from state attorneys general and treasurers questioning the legality of investment decisions that consider ESG factors. Meanwhile, companies continue to be inundated with shareholder proposals that overwhelmingly seek the expansion of ESG commitments. Such proposals have been supplemented by growing regulatory demands on companies to identify, disclose and mitigate ESG risks. And when companies have ventured to take a public stance on ESG issues, several have attracted national controversy and exposed deep rifts among their different stakeholders.
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