BOARD OVERSIGHT IN ESG - EVOLVING TRENDS IN THE ERA OF INCREASING DISCLOSURE REQUIREMENTS

Peloso examines how the shift to regulatory ESG may impact the board's oversight of ESG issues, potentially rendering Strine et al's Caremark framework obsolete. In Caremark and ESG, Perfect Together: A Practical Approach to Implementing an Integrated, Efficient and Effective Caremark EESG Strategy, Leo Strine and co-authors frame a board's duty of oversight for environmental, social, and governance (ESG) issues in light of the common-law duties articulated under Caremark. The landmark Caremark decision articulated that corporations and their directors have a duty to implement and monitor compliance programs to ensure that the company honors its legal obligations. However, a number of recent proposed rules from the US Securities and Exchange Commission (SEC) signal that ESG in the US has reached an inflection point - moving from discretionary actions to regulatory ones.