ESG Litigation Guide

United States of America

Governance

Corporate governance policy

In force

  • “issuers” and their officers, directors, employees, agents, and stockholders acting on behalf of an issuer;
  • “domestic concerns” and their officers, directors, employees, agents, and stockholders acting on behalf of a domestic concern; and
  • certain persons and entities, other than issuers and domestic concerns, acting while in the territory of the United States.
  • Makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.
  • Anti-bribery provisions prohibit the wilful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorisation of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Governance

Corporate governance policy, financial reporting

In force

Public and private companies and individuals

Created reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the Public Company Accounting Oversight Board to oversee the activities of the auditing profession.

Governance

Corporate governance policy, financial reporting

In force

Companies trading in securities exchanges and related individuals

  • Establishes requirements for companies listed on stock exchanges. Requirements include registration of securities, disclosure, proxy solicitations, and margin and audit requirements. It also includes provisions on insider trading.
  • Authorised formation of the Securities and Exchange Commission.
Social
Governance

Corporate governance policy, social policy

In force

Private sector employees and state and local government workers only if they work in a state that has an OSHA-approved state plan.

The OSH Act protects worker safety and health standards. It creates a duty of employers to provide workplaces that are free from known dangers to employees. Among other things, an employer must inform workers about hazards (i.e. through trainings, color-coded systems, chemical information sheets, etc), keep records of work-related injuries and illnesses, perform air sampling tests, and not retaliate against workers that report work-related injuries.

It also created the Occupational Safety and health Administration, which sets and enforces standards set in the OSH Act as well as provides training and assistance to employers and employees.

Social
Governance

Corporate governance policy, social policy

In force

Coal or other mines that enter products into commerce or operations of which affect commerce; operators of such mines; every miner of such mine

Protects the health and safety of miners in the coal, metal, and non-metal industries. The Mine Act requires four annual inspections at underground mines, two annual inspections at surface mines, and requires mine rescue teams at underground mines. It also strengthens rights for miners, enhances miner protection from employer retaliation, and establishes mandatory training requirements.

The Mine Act granted enforcement responsibilities to the Department of Labour and created the Mine Safety and Health Administration.

Environmental

Environmental policy, non-financial reporting

In force

Any individual or company discharging pollutants into the waters of the U.S.

The primary federal law governing water pollution that establishes a structure for regulating discharge of pollutants into the waters of the United States (WOTUS). What bodies of water is considered as WOTUS has been debated over the recent past and is an ongoing discussion.

The Act provides for the implementation of pollution control programs by the Environmental Protection Agency (EPA). Included is the National Pollutant Discharge Elimination System permit program that allows for certain discharges of a pollutant to a point source into navigable water. Under the CWA, the EPA also conducts compliance management of municipal wastewater and stormwater as well as discharges from Concentrated Animal Feeding Operations.

Environmental

Environmental policy, non-financial reporting

In force

States to ensure compliance with NAAQS, stationary sources (e.g. power plants and factories), and vehicles.

The CAA requires that the Environmental Protection Agency establish national ambient air quality standards for six criteria pollutants (particulate matter, ozone, sulfur dioxide, nitrogen dioxide, carbon monoxide, and lead). The CAA includes provisions on reducing pollution from motor vehicles and from new or expanded industrial plants. While existing stationary sources enjoy a less stringent standard, the CAA requires that new stationary sources use the best available technology.

Environmental

Environmental policy, non-financial reporting

In force

Facilities generating hazardous or non-hazardous wastes.

Creates a framework for the management of hazardous (Subtitle C) and non-hazardous (Subtitle D) solid waste. It grants the Environmental Protection Agency authority to control hazardous waste in its generation, treatment, storage, and disposal.

Environmental

Environmental policy

In force

Privately and Federally-owned facilities, and other private parties.

Grants the President authority to clean up hazardous waste sites through its removal or remedial provisions. It also identifies potentially liable parties for the clean-up. Liable parties include current and former owners of facilities where hazardous substances were disposed as well as those responsible for transporting and arranging for the hazardous substance.

Environmental

Environmental policy

In force

Federal agency actions

Requires environmental review of major federal actions that significantly affecting the quality of the human environment. NEPA does not mandate a specific result or substantive outcome, but instead requires that environmental impacts be considered through the creation of an Environmental Impact Statement or an Environmental Assessment. Recently, the Council on Environmental Quality issued an update to the regulations implementing NEPA.

Environmental

Environmental policy

In force

Federal agency actions

Ensures that actions authorised, funded, or carried out by federal agencies are not likely to jeopardise listed species or result in destruction or adverse modification of designated critical habitats. It also prohibits actions that constitute a “taking” of listed species, unless a proper permit is procured.

The ESA is implemented by the U.S. Fish and Wildlife Services and the U.S National Oceanic and Atmospheric Administration Fisheries Service.

Environmental

Environmental law

In force

Businesses in California and Washington

Plastic manufacturers in the two states will have to have their products contain certain minimum percentages of recycled plastic, increasing on 5 yearly timescales.

In California, this will be limited to plastic bottles, but in Washington, the law encompasses a wider range of plastic products.

Governance

Corporate governance policy

In force

Companies and individuals

Antitrust law that promotes economic fairness and competitiveness to regulate interstate commerce. It outlaws contracts that unreasonably restrict trade and monopolies or conspiracy to monopolise.

Contains both civil and criminal penalties. Criminal penalties can be as high as $100 million for corporations and $1 million for individuals, but are typically limited to intentional and clear violations.

Social
Governance

Corporate governance policy, social policy, financial reporting

In force

Public companies and individuals

Series of federal regulations that provide revisions to a wide range of regulations including those related to consumer protection, trading restrictions, credit ratings, regulation of financial products, corporate governance and disclosure, and transparency.

Governance

ESG policy

Voluntary standards

PE funds

The American Investment Council membership has adopted a set of comprehensive responsible investment guidelines that its members apply prior to investing in companies and during their period of ownership. The guidelines cover environmental, health, safety, labour, governance and social issues.

Social
Governance

Corporate governance policy, social policy

In force

Employers whose annual sales total $500,000 or more or who are engaged in interstate commerce

Establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Social
Governance

Corporate governance policy, social policy

In force

Product importers, including nonresident importers, located in the United States

Bans the importation and allows the detention or seizure of products produced using forced, convict, or indentured labour.

Recent developments: In 2019, the U.S. Customs and Border Protection blocked the importation of products suspected.

Social
Governance

Corporate governance policy, social policy

In force

Entities engaged in the manufacture, processing, packing, transporting, distribution, reception, holding, or importation of food.

Authorises the U.S. Food and Drug Administration (FDA) to prevent food safety problems and, in doing so, to hold imported foods to the same standards as domestic foods.

Social
Governance

Corporate governance policy, social policy

In force

Product importers, specifically of products manufactured in China

Specified retailers must make specific disclosures on their website about efforts taken to eradicate slavery and human trafficking form direct supply chains for tangible goods offered for sale.

Governance

Corporate Governance Policy

Coming soon

Companies trading in securities exchanges

Would establish requirements for publicly held companies to report greenhouse gas emissions by suppliers and partners in their annual 10K reports or elsewhere.  The new rules may require specific metrics for certain industries.

Disclosures may include both qualitative and quantitative information requests, such as information on the company’s progress towards climate-related goals, effects of climate-related legislation and how the company’s leadership manages climate-related risks and opportunities.

Environmental
Governance

Environmental policy

Voluntary standards

All companies

The Taskforce consists of 40 members who represent financial institutions, corporates and market service providers with over US$20trn in assets.

The Taskforce’s aim is to develop an international risk management and disclosure framework to enable organisations to report on, and subsequently act on, nature-related risks. By facilitating the transfer of information regarding nature-related risks, the framework will strive to encourage companies to incorporate these environmental considerations into their strategies and operations.

The Taskforce published the third version of its beta framework in November 2022. The final version will be published in September 2023. 

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