If Diversity Is Not a Pipeline Problem

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Author: Esther Yang | UC Berkeley School of Law | J.D. Candidate 2020 | Posted: February 14th, 2019 | Download PDF

As the investor community agreed and acknowledged, diversity makes companies more productive and retains talent.[1] A study by McKinsey & Company also showed that it was “increasingly clear that [diversity] makes sense in purely business terms.”[2] After examining proprietary data sets for 366 in public companies across a range of industries in Canada, Latin America, the United Kingdom, and the United States for several years, McKinsey found that “companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.”[3] The research showed that in the United States, “there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior executive team, earnings before interest and taxes rise 0.8 percent.”[4] While correlation doesn’t equal causation, there is a general consensus that diversity is and will continue to be an increasingly important to institutional investors, pension funds, employees, and other stakeholders. (more…)

Investors Focused on Climate Change Should Integrate Land Rights into their Renewable Energy Investment Strategies

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Author: Trudie Makens | UC Berkeley School of Law | J.D. Candidate 2020 | Posted: February 14th, 2019 | Download PDF

As of the end of 2017, $12 trillion or more of the $46.6 trillion under professional management in the United States was invested pursuant to sustainable, responsible and impact investing (“SRI”) strategies.[1] This is up 38% from $8.7 trillion in 2016.[2] The drivers of SRI growth are asset managers who value environmental, social and corporate governance (“ESG”) criteria to generate long-term financial returns and social good.[3] The most important ESG issue that asset managers were focusing on in their SRI strategies was climate change.[4] Among institutional investors, climate change was also one of their top three issues.[5] (more…)

Plastic Pollution: Companies Must Help, and It’s Better for Business, Too

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Author: Rica Santos | UC Berkeley School of Law | J.D. Candidate 2019 | Posted: January 25, 2019 | Download PDF

In October 2018, a study by the nonprofit Greenpeace in conjunction with the movement Break Free From Plastic made international headlines, calling out companies that are the biggest contributors to the worldwide plastic pollution problem.[1] The study involved 239 beach cleanups in 42 countries and catalogued over 187,851 pieces of washed up plastic.[2] The study also effectively placed pressure on corporations to respond to their findings the study also called out companies by including a brand audit.[3]

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Corporate Sustainability in the Shift Toward Private Ownership

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Author: Brenden Glapion | UC Berkeley School of Law | J.D. Candidate 2020 | Posted: January 22nd, 2019 | Download PDF

In March of 2017, the number of publicly traded domestic companies listed on U.S. stock exchanges had hit its twenty year low of approximately three thousand, six hundred companies. Twenty years earlier the number was almost double in June of 1997 with seven thousand, six hundred publicly traded U.S. companies. Naturally, the decline in public companies and initial public offerings over this twenty year period was accompanied by a large growth in privately held companies. This decline not only resulted in an increase in private companies, but also an increase in “bigger” publicly held companies as a result of mergers and acquisitions and technological innovation. For example, at its peak, Alphabet, Google’s parent company, engaged in nearly one acquisition a week. (more…)

Standardized ESG Disclosure: European Union as Role Model?

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Author: Lukas Herndl | UC Berkeley School of Law | LL.M. Candidate 2019 | Posted: January 8th, 2019 | Download PDF

An increasing number of companies disclose their ESG[1] strategy and related risks to investors and to the public. These disclosures, commonly referred to as sustainability reports, follow a rising demand by investors who see ESG as an important factor influencing the long-term performance of businesses. But since disclosure is not mandatory, a significant number of companies does not report. And absent common guidelines, voluntary sustainability reports are hard to compare and thus have less value for investors. (more…)

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