Covington's "Companies Face Greater Scrutiny for Misleading Environmental Claims and Nonstandard Sustainability Reporting" advises companies to be cognizant of the legal risks associated with increased disclosure and reporting of sustainability-related assertions:
As more investors pay attention to sustainability claims and push companies to strive for more ambitious goals, it is likely that reactions to and consequences for false, misleading, and nonstandard claims will become harsher. Companies would be well advised to scrutinize their sustainability reporting and environmental claims to ensure they are neither misleading nor deceptive, comply with the Federal Trade Commission's Green Guides and truth in advertising laws, and are premised on justifiable and widely-accepted sustainability metrics. See also the Society/Gibson Dunn's "Legal Risks and ESG Disclosures: What Corporate Secretaries Should Know" posted on our ESG page.
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This post first appeared in the weekly Society Alert!
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