ESG and Fiduciary Duties

The social, environmental, and governance challenges of the 21st century represent both companies’ greatest risks and opportunities. While many investors, from retirement plans to mutual funds, have embraced the importance of ESG in the investment process, it is critical to understand the legal obligations of fiduciary duty, the role of the fiduciary, and the changing regulatory backdrop to assess the relevance and materiality of ESG. For example, the politicization of ESG in the US has created divergent support and threats. Understanding this unique and changing landscape alongside pivotal legal challenges is critical for business and investment decisions. In this course, students will learn about the legal obligations of fiduciary duty, its core principles, and whether and how ESG investing intersects with fiduciary duty. Furthermore, we will discuss the financial risks and rewards of ESG as important data points in the duty of care, as well as the role of disclosure and regulators within the US and beyond. While the course will largely be taught from the perspective of the US investment experience, we will compare trends in the global market.