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'We Have Big Problems': As Businesses Use ESG to Help, Corporate Law is Changing

American Lawyer

16 Nov 2021

Suz Mac Cormac spoke to the American Lawyer about sustainable sneaker-maker Allbirds committing to a new set of criteria called the Sustainability Principles Objectives (SPO) Framework, which seeks to help companies demonstrate their ESG [environmental, social, and governance] credentials to investors and stakeholders.

This is just one example of how ESG matters are being interwoven with corporate law, according to Suz, who was the only law firm attorney to advise on the council that created the SPO Framework.

"To take a step back, ESG is incredibly broad," Suz said. "It's like saying you're buying a car, but think about all of the different varieties of cars. It's the same thing with ESG. It's very broad and it encompasses many factors. All of those factors are good for companies, and some of them, depending on the company, are more tied to operations or profitability. So a good ESG program for a company takes those factors and weighs them."

She added: "But one of the issues, and how the SPO Framework came about, is right now there is an incredible amount of green-washing because almost every company can say 'we're doing good' and there is not a lot of rigor behind verification and not a lot of consistency in standards. Our group identified there was a gap for late-stage private companies and early-stage public companies in the reporting framework. The group pulled together to say 'what would be criteria that could be verified, that could be applicable to companies at this stage of business?' We didn't try to set a new standards. We said 'there are all these standards, but this is how companies should be thinking about [them.]'"

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