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Page 3 - ஹார்வர்ட் சட்டம் பள்ளி மன்றம் News Today : Breaking News, Live Updates & Top Stories | Vimarsana

Reverse discrimination risks to consider in managing ESG aspirations

Environmental, social and corporate governance (ESG) efforts are important but create unique risks for multinationals with US operations due to the risk of reverse discrimination litigation under US law. This is because US employment discrimination laws swing both ways. For example, the prohibition against sex discrimination protects men as well as women. This means that ESG efforts involving employment must be pursued more thoughtfully.

The rising tide of corporate governance

In the last year, there has been a broad shift in corporate governance focus towards social issues, including human capital management – the ‘S’ of ESG.  The proxy voting adviser Glass Lewis notes majority support for a record number of such proposals, including on diversity in the 2020 US proxy season, and this focus is set to continue following human capital management disclosure rules announced by the Securities and Exchange Commission last autumn. CEO pay has come under the spotlight this AGM season as investors have taken a dim view of companies that have benefited either from government subsidies or employment support/furlough schemes, but failed to appropriately modify executive pay to reflect that. 

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