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ESG and Class Action Lawsuits
April 14, 2023
2022 was a banner year for class action lawsuits. According to a Duane Morris analysis, “the aggregate totals of the top ten class action settlements – in areas as diverse as mass torts, consumer fraud, antitrust, civil rights, securities fraud, privacy, and employment-related claims – reached the highest historical totals in the history of American jurisprudence.” Between class actions and government enforcement litigation, settlement totals spiked to over $63 billion. The firm predicts that environmental, social and governance issues will be a new focus of class actions in 2023, and calls ESG a prime area of risk, with four areas of particular importance. Shareholders are filing lawsuits claiming their by stock has lost value over ESG matters like sexual harassment allegations involving key executives, data breaches, and environmental disasters. Companies are faced with increasing demands to address ESG issues (“greenwashing,” for example) throughout their supply chains, and with all vendors, and partners. State consumer protection laws are creating new causes of ESAG actions. Government enforcement on the federal, state and local level threaten action based on alleged contributions to climate change. “As ESG programs become larger and more integrated into a company’s business, so do the risks of attracting attention from regulators and private litigants.”
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