Clifford Chance

ESG Reporting Issues and Securities Litigation Risk

14 September 2020

Investors are increasingly considering the Environmental, Social and Governance (ESG) credentials of publicly listed issuers when making investments. This has put ESG disclosures (including climate change-related disclosures) in annual reports and prospectuses under intense scrutiny, meaning issuers are at risk of investor and activist claims if those disclosures are inaccurate.

Experience from other jurisdictions (in particular the US) shows that investors are willing to pursue large-scale group claims against companies for inaccurately representing their ESG credentials, and given the growth in the UK securities litigation market more generally, we anticipate that investors in this jurisdiction are likely to follow suit.

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