Key Developments
Delaware court finds corporate speech on public policy issues within business judgment.
The Delaware Court of Chancery has held in Simeone v. The Walt Disney Company that a stockholder’s disagreement with a corporation’s decision to speak on public policy did not constitute a “proper purpose†for making a books and records demand under Delaware law. This decision stems from public statements made by Disney’s former CEO about the company’s opposition to Florida House Bill 1557 and its support of the LGBTQ+ community.
U.S. Republican lawmakers and state attorneys general continue scrutiny of ESG.
U.S. House Republicans held multiples hearings throughout July on ESG in capital markets regulations and proxy voting, while other Republican lawmakers sought information on whether asset management firms’ efforts to reduce emissions from assets under management in conjunction with other asset managers may violate U.S. antitrust law.
Governance of ESG rating agencies continues to evolve.
An industry-led working group has published a consultation on a draft, voluntary code for conduct for ESG ratings and data product providers that is intended to have broad application and can be adopted by providers based in any jurisdiction. The industry working group has the support of market participants, the International Capital Market Association and regulators. Meanwhile, the UK Treasury is considering whether ESG ratings providers should be brought within the scope of UK financial services regulation, and the European Commission has proposed a regulation to improve the transparency and reliability of ESG ratings activities.
