Environmental, social and governance (‘ESG’) is commonly referenced in policy and investment contexts but, for lawyers, it is better understood as a set of overlapping disclosure, regulatory and governance frameworks that shape how organisations operate, communicate, transact and are supervised.
‘E’ covers environmental compliance and climate transition frameworks, but also the legal regimes governing permitting, pollution control, land use, biodiversity, product stewardship, chemicals regulation and carbon pricing. ‘S’ encompasses supply chain transparency, labour standards, human rights reporting, modern slavery regimes and workforce-related disclosure obligations. ‘G’ concerns corporate governance and accountability, including directors’ and officers’ duties, board and committee oversight, internal controls, stewardship expectations where relevant, reporting standards and mechanisms for enforcement and liability.
ESG cuts across corporate law, financial regulation, consumer protection, competition law, environmental law and public law. In some jurisdictions, private litigation plays a significant role in shaping ESG behaviour; in others, administrative enforcement and regulatory supervision are more prominent. ESG rarely sits in one statute or under one regulator. It is a cross-cutting regulatory landscape.
For lawyers, ESG risk arises in identifiable tasks—reviewing and approving public sustainability claims, preparing disclosures, structuring transactions, managing supply