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The sharp rise in the number of lawsuits being brought against companies on ESG-related issues over the past decade is being driven by the expanding scope and scale of legal jurisdiction, with legal actions reaching further down the supply chain and encompassing broader legal interpretations, WBCSD research finds.
With lawsuits against companies concerning ESG issues growing by 25 percent over the last three decades, new analysis from WBCSD sheds light on the drivers of that increase, driven by three key trends:
- More litigations involving supply chains: There is an increase in ESG-related litigations against companies due to their subsidiary companies and suppliers.
- Policy and regulatory frameworks: There is an increase in litigations citing pre-emptive due diligence requirements related to reporting or maintaining a “standard of care.”
- Soft laws are entering the Court: Most due diligence-related cases are based on soft law sources, such as the Biodiversity Conventions, OECD Guidelines and more.
This research has been conducted as part of the Conservation and Markets Initiative project, funded by the Gordon and Betty Moore Foundation.