Statutory and Voluntary Programs and Regimes in the United States Focusing on the E in ESG

The environmental component (E) of environmental, social, and governance (ESG) issues focuses on both environmental impacts and the disclosure of those impacts. For many investors, customers and other corporate stakeholders, existing environmental law does not adequately address E. Those stakeholders are often interested in environmental impacts not clearly regulated by, and environmental disclosure not clearly required by, current law. In the United States, the statutory approaches to the environmental component of ESG are limited on the federal level. In contrast, many states and cities are showing a commitment to addressing E, especially with regard to climate risk, while many companies are voluntarily adopting E initiatives. The short-term approach to E on the federal level will likely depend on the results of the November 2020 elections. The Trump campaign has been silent on the issue, while the Biden campaign has proposed a $2 trillion clean energy and infrastructure plan and a clean energy and environmental justice plan. Given the current uncertainty about E, short-term flexibility about a corporate approach to E can be beneficial to the oil and gas sector as well as other industries.