Prerequisite: None

Exam Type: One-Day Take-Home, Paper Option Available

This course will investigate the rise of ESG (Environmental, Social and Governance) as a dominant investment strategy and its consequences for corporate governance and regulation of several sectors in the global economy. Many might view ESG as simply a facet of corporate social responsibility, corporate governance, stakeholderism, business and human rights or other well-established topics among legal scholars. In order to investigate what it is and is not, we will review the main theories of corporate ethics, focusing on concepts of legal personality and corporate responsibility. From such conceptual discussion, we will deep dive into the understanding of ESG as a methodology to create metrics for investment. We will cover legal aspects of “green finance” instruments, such as carbon credit markets, green bonds, and sustainability linked-bonds, including their respective model documents and taxonomies. We will also examine current developments in ESG methodology, in particular the race for the creation of global standards and metrics. With the machinery of ESG in mind, we will review how regulators around the world have been reacting to such demands, with a focus on the efforts by the U.S. Securities and Exchange Commission and the European Securities and Markets Authority to fight greenwashing. We will debate complex topics that connect the ESG methodology and law based on case-studies, such as the barriers to the implementation of international carbon markets and its effects on climate change, the social efforts to increase racial and gender diversity in companies, and the progress and backlash in the fight against corruption. We will analyze these topics in light of the challenges in regulating technology companies that usually perform well based on current ESG metrics, but also present major threats, such as increasing demand for energy sources, the presence of algorithmic discrimination, and the difficulties of governing artificial intelligence. Finally, the course will focus on the concept of “twin transformation,” with the purpose of articulating the current challenges of regulating both new technologies and climate change. At the end, students will be invited to confront this conundrum: is ESG the ultimate technique to actualize corporate ethics, or is it too little, too late, and does not really capture the major ethical problems facing corporations in the 21st century?