Most law firms and attorneys are familiar with sustainability reporting as a business practice sharing information on environmental, social, and economic impacts of a company with shareholders and the wider public. Although there are very limited regulatory requirements under U.S. securities laws (for disclosure of “material” climate-related risks, SEC Rule 12b-20; a fact is “material” if there is a “substantial likelihood” that a reasonable shareholder would find its omission significantly alters the total mix of available information, Basic, Inc. v. Levinson, 485 U.S. 224 (1988)), sustainability reporting (aka Environmental, Social, and Governance, or ESG, reporting) is a fast-growing industry. In the United States, sustainability reporting is primarily designed to attract socially and environmentally minded investors. Indeed, Fidelity Research indicates that 72 percent of retail customers under 40 years of age report that social impact is key to their investing decisions.
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