Environmental, Social and Governance (ESG)

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The committee’s mission is to be a reliable platform for California legal practitioners seeking legal education and resources regarding the dynamic area of environmental, social, and governance (ESG) matters.

Upcoming Projects

The committee is working to develop programs, resources, and materials regarding ESG and accompanying changes in law and regulation. Our committee’s nonpartisan mission is best served by receiving input, contribution, and feedback from diverse thought leaders from various backgrounds and legal perspectives. The committee is pleased to announce that we will soon have the ability to track, report, and display on our webpage ESG-related anticipated, pending, and enacted California and applicable federal legislation. The committee will also soon be recording and releasing our “ESG in 5” video series, gathering ESG perspectives from legal practitioners from across California. The committee additionally anticipates scheduling and publishing webinars and digestible articles regarding ESG matters. The committee is quite pleased with the input and contributions of our members thus far, but continually seeks interested legal students, practitioners, and experts to contribute to the committee. If you are interested, please navigate to the link at the top of our webpage.

Watch Our YouTube Playlist


California Litigation

Lynch v. Spilman (1967) 67 Cal.2d 251, 261

This case established a broad definition of nonprofit charitable purposes with implications of SPCs.


Estate of Breeden (1989) 208 Cal.App.3d 981, 985

This case also established a broad definition of nonprofit charitable purposes with implications of SPCs.


People of the State of California ex rel. Kamala D. Harris, Attorney
General, Plaintiff, v. ENSO PLASTICS, LLC; Aquamantra, Inc.; Balance Water Company LLC (2011)

California AG filed a greenwashing suit in against two bottled water companies and their plastic resin supplier, alleging that they made misleading claims by marketing plastic water bottles as 100% biodegradable and recyclable. The parties settled.


Paduano v. American Honda Motor Co. Inc, 169 Cal. App. 4th 233 (1996)

This was an individual action in state court whereby the plaintiff relied on the defendant’s advertisements about the vehicles fuel economy when purchasing the Honda Civil hybrid.


True v. Am. Honda Motor Co., 520 F Supp. 2d 1175, 1183 (C.D. Cal. 2007)

This was a federal class action where the plaintiff relied on the defendant’s advertisements about the vehicles fuel economy when purchasing the Honda Civil hybrid.


Crest v. Padilla, No. 20-STCV-37513 (2022)

This case challenged the constitutionality of AB 826 (see above), ultimately striking it down as unconstitutional.


Crest v. Padilla, No. 19-STCV-27561

This case challenging the constitutionality of AB 979 (see above), ultimately striking it down as unconstitutional



Re Females on Boards of Directors – SB 826

A bill that required public companies that hold their principal executive office in California, including publicly held domestic or foreign corporations, to have at least one female on its board of directors. The bill was signed into law but struck down as unconstitutional in Crest v. Padilla, No. 20-STCV-37513 (see below).


Re Underrepresented Communities on Boards of Directors – AB 979

A bill that required any publicly held domestic or foreign corporation with its principal executive office in California to have a minimum of one director from an underrepresented community on its board of directors. The bill was signed into law but struck down as unconstitutional in Crest v. Padilla, No. 19-STCV-27561 (see below).



Climate Corporation Accountability Act – SB 260

An act to add Section 38532 to the California Health & Safety Code, which would require all domestic (CA) and foreign (non-CA) entities with total annual revenues in excess of one billion dollars ($1,000,000,000) and who do business in California to annually and publically disclose their Scope 1, 2, and 3 greenhouse gas emissions. Introduced and passed in the California Senate. The first hearing in the California Assembly was held on August 3, 2022, was passed as amended in committee on August 11, 2022, read a second time, amendment, and order to an additional second reading on August 15, 2022, and was read a second time and ordered to a third reading on August 16, 2022. The third reading will be held on August 22, 2022.



The California Transparency in Supply Chains Act

The California Transparency in Supply Chains Act (the “CTSCA”) was enacted in 2012 in an effort to address slavery and human trafficking directly or indirectly influenced by entities’ supply chains. Generally, the CTSCA requires that entities that (a) are retailers or manufactures; (b) do business in California; and (c) have gross, global receipts of at least $100,000,000 to provide certain disclosures on their website as to their efforts, if any, to mitigate any slavery or human trafficking impacts throughout their supply chains.


Social Purpose and Benefit Corporation Enabling Acts
  • The Corporate Flexibility Act of 2011
    • The Corporate Flexibility Act of 2011 created two new forms of for-profit corporate entities in California, both created to bridge the legal gap between the traditional for-profit corporate purpose and an additional ESG purpose. This Act created both the (a) Flexible Purpose Corporation (later renamed the Social Purpose Corporation (“SPC”), see below) and the (b) Benefit Corporation (“BC”).
    • Historically, there had been a clear dividing line between for-profit and non-profit corporations. Traditional for-profit corporations have been able to promote environmental or socially beneficial causes, but these activities, either by law or in practice, are subservient to the long-term economic interests of shareholders. Directors risk liability otherwise. In contrast, traditional non-profit corporations are required to act for the benefit of society, but they risk losing tax-exempt status if they fund their mission by engaging in profit-making activities. SPCs and BCs are hybrids that bridge this historical divide. They are each for-profit entities, but they offer protection from liability for officers and directors who pursue societal objectives at the expense of corporate profits.
Social Purpose Corporation (“SPC”)  
  • The act enabling SPCs
    • An SPC is required to adopt and state in its Articles of Incorporation an additional corporate purpose, which can be: (a) any charitable purpose for which a non-profit entity is allowed to pursue and adopt, which is broadly defined but includes purposes like the relief of poverty, advancement of education or religion, promotion of health, etc. and/or (b) operating the SPC for the purposes of promoting the SPC’s beneficial activities on or minimizing adverse actions of the SPC activities on the SPC’s (i) employees, suppliers, customers, and creditors, (ii) the community and society, and/or (iii) the environment. In making its corporate decisions, the SPC’s management must weigh the interests of the company, the shareholders, and the enumerated additional purpose(s) in its Articles. The SPC must issue an annual report to the shareholders which must contain a section on management’s discussion and analysis (generally “MD&A” and in this context, the “Special Purpose MD&A”) as to the SPC’s additional special purpose, its progress, its actions taken, expected impacts, etc. The special purpose MD&A must also be made available to the public on the SPC’s website. There is no third-party standard required to assess the performance of the SPC special purpose.
Benefit Corporations (“BC”)
  • The act enabling BC
    • BCs are required to adopt and state in its Articles of Incorporation an additional corporate purpose, which must be that the BC shall create a general public benefit, meaning a material benefit upon both society and the environment. A BC may also designate a specific public benefit, which can be anything of a particular benefit to society or the environment. The BC must independently select a third-party standard that is used to assess its performance in terms of its general public benefit and any specific public benefit. The BC must also issue an annual report that includes a narrative as to process and rationale for selecting the third party standard, the ways the BC pursued their general and any specific public benefits, and any hindering circumstances in pursuit of achieving such general and any specific public benefits.

CLA Voluntary Eco-Pledge & Law Office Sustainability Policy

Voluntary Eco-pledge And Voluntary Law Office Sustainability Policy

The day-to-day practice of law has significant environmental impacts. The legal profession uses enormous amounts of paper, energy, water and other natural resources, and generates a vast stream of waste products. The consumption of natural resources and its associated waste stream has a substantial impact on climate change and environmental quality, and has a significant impact on the quality of life for present and future generations. Additionally, implicit in the concept of sustainability is the notion that using fewer resources such as paper and energy will lower the costs of legal services, thereby making these services more affordable and accessible to clients.

Email environmental@CAlawyers.org to participate.

The California Lawyers Association recognizes that environmental protection, climate change and related environmental and social issues are urgent problems that require action. The solution to these problems must include efforts by individuals, businesses and organizations – including the legal profession – to reduce their environmental impacts.

Environmental Disclosure Frameworks

Task Force on Climate Related Financial Disclosures (“TCFD”)

The Financial Stability Board (FSB) established the TCFD for the purposes of issuing standardized climate-related financial disclosures to provide better corporate information in support of informed capital allocation. The TCFD first issued its standards in 2017 and the standards center around four thematic disclosure areas: Metrics and Targets, Risk Management, Strategy, and Governance. The interrelated core disclosure areas also include eleven other disclosure recommendations. The TCFD standards are adopted in both the adopted EU sustainability focused disclosure requirements as well as the proposed counterpart requirement from the SEC in the US.


Task Force on Nature Related Financial Disclosures (“TNFD”)

The Task Force on Nature Related Financial was established in 2021, with funding or direct support from UN GC, the UN Environment Programme Finance Initiative, the UN Development Programme, and other major players in the global sustainability community. The standards being developed are set to be introduced in 2023. The TNFD disclosure standards are meant to directly build upon and supplement TCFD standards, being centered around the same four main thematic disclosure areas: Metrics and Targets, Risk Management, Strategy, and Governance. Where TNFD differs from TCFD is greater focus on ecosystems and environmental degradation, metrics without often more difficulty in quantification, as opposed to, for instance, greenhouse gas emissions.

International Financial Reporting Standards Foundation (“IFRS Foundation”)

The IFRS Foundation establishes two major standard setting boards under the IFRS Foundation umbrella: (a) the International Accounting Standards Board (IASB) and (b) the International Sustainability Standards Board (ISSB).The IASB issues international accounting standards that are not generally used in the US (where public companies are generally required to use GAAP accounting), but are used throughout the international community. The ISSB was agreed upon at and formed following the UN COP 26. ISSB’s mission is to consolidate various other sustainability and climate-change focused disclosure standards into a single, comprehensive international standard. The ISSB’s forthcoming standards are a consolidation of the Climate Disclosure Standards Board (CDSB) standards and recently of the Value Reporting Foundation (VRF). The VRF standards were themselves the consolidation of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) standards. The ISSB standards are currently concluding their comment period on draft standards, separated by sustainability-focused disclosures and climate change-focused disclosures, and aim to issue the final standards by the end of 2022. Both the IASB and the ISSB are jointly working on an Integrated Reporting Framework, enabling financial and sustainability disclosures as a single, integrated reporting framework.


Global Reporting Initiative (“GRI”)

GRI was created in 1972 and as of 2022, is used by 72 percent of 250 of the world’s largest companies and 67 percent of the 100 largest firms in 52 countries. GRI refers to itself as “the world’s most widely used standards for sustainability reporting.” It publishes standards and formats for mandatory, recommended, and voluntary disclosures. Such standards are meant to highlight a company’s global impact and are based on materials, energy, water, biodiversity, emissions, pollution, waste, and supply chains.


Carbon Disclosure Project (“CDP”)

CDP was created in 2000 and since 2022 is used by over 13,000 companies and about 1,100 cities, states, and regions, as well as approximately 600 investors with over $110 trillion in assets under management. CDP “supports thousands of companies, cities, states, and regions to measure and manage their risks and opportunities on climate change, water security, and deforestation.” It prioritizes on quantitative impact data and employs an independent approach to evaluate reports and assign letter grades. In 2021, over 270 companies received an A rating for climate change, forests, or water security.


Greenhouse Gas Protocol (“GHG Protocol”)

The Greenhouse Gas Protocol (GHGP), a joint initiative of World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), establishes comprehensive global standardized frameworks to measure and manage greenhouse gas emissions from private and public sector operations, value chains and mitigation actions. GHG Protocol supplies the world’s most widely used greenhouse gas accounting standards. The Corporate Accounting and Reporting Standard provides the accounting platform for virtually every corporate GHG reporting program in the world.


Other Practitioner Resources

United Nations Global Compact (“UN GC”)


UN Principles for Responsible Investment (“UN PRI”)

The UN PRI is a partnership of the UN GC and the UN Environment Programme Finance Initiative. UN PRI sets forth six principles of responsible investment, in which UN PRI aims to help the international investment community incorporate ESG factors in investment decisions. Signatories to the UN PRI commit to consider the following six principles in their investment strategy and decisions: (1) We will incorporate ESG issues into investment analysis and decision-making processes; (2) We will be active owners and incorporate ESG issues into our ownership policies and practices; (3) We will seek appropriate disclosure on ESG issues by the entities in which we invest; (4) We will promote acceptance and implementation of the Principles within the investment industry; (5) We will work together to enhance our effectiveness in implementing the Principles; and (6) We will each report on our activities and progress towards implementing the Principles.


Nasdaq Board Diversity Disclosure

In August 2021, the SEC approved Nasdaq listing rules implementing new board diversity disclosure requirements that will apply to most Nasdaq-listed companies. Subject to certain exceptions, these Nasdaq Board Diversity Rules will generally require Nasdaq-listed companies to: (1) have, or publicly disclose why they do not have, at least two diverse directors (including at least one self-identified female director and at least one director who self-identifies as an “underrepresented minority” or LGBTQ+); and (2) publicly disclose board diversity statistics using a standardized format on an annual basis. As of August 7, 2023, listed companies will need to have, or explain why they don’t have, at least one (and by later specified dates, two) diverse directors.  Certain relief is provided for Smaller Reporting Companies and Foreign Issuers, as well as companies with five or fewer directors.


B-Lab & The B-Corp Certification

B-Lab is a non-profit entity that administers one of the most well-known, global ESG related certifications for companies. Companies that qualify and are approved by B-Lab obtain the B-Corp Certification and are known as B-Corps. In a terminology sense, B Corps are often mischaracterized or synonymized with Benefit Corporations, which are not the same thing. However, the B Corp Certification does require slightly differing requirements across jurisdictions. In California, this means that to obtain a B-Corp Certification, a California corporate entity must become a Benefit Corporation or a Social Purpose Corporation, though Benefit Corporation is the preferred choice to achieve B-Corp status. SPCs, LLCs, and LLPs may also obtain the B-Corp Certification by adding specific governance language in their governing documents.


The Chancery Lane Project (“TCLP”)

TCLP is a collaborative effort of legal and sustainability industry experts that develop contract clauses that are sustainability aligned, including alignment with net zero targets, with the Paris Climate Accord, and with other international agreements. Climate clauses range in their context and application, but include the following areas: real property, corporate governance, commercial, capital markets, insurance, supply chain, etc. US law translations for many of the most used clauses are available as well.


Dow Jones Sustainability Indices (“DJSI”)

The Dow Jones Sustainability Indices (DJSI) are float-adjusted market capitalization weighted indices that measure the performance of companies selected with ESG (Environmental, Social, Governance & Economic) criteria using a best-in-class approach.


Intergovernmental Panel on Climate Change (“IPCC”)

The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change. The IPCC was set up in 1988 by the World Meteorological Organization (WMO) and United Nations Environment Program (UNEP) to provide policymakers with regular assessments of the scientific basis of climate change, its impacts and future risks, and options for adaptation and mitigation. IPCC assessments are written by hundreds of leading scientists who volunteer their time and expertise as Coordinating Lead Authors and Lead Authors of the reports. IPCC reports undergo multiple rounds of drafting and review to ensure they are comprehensive and objective and produced in an open and transparent way.


International Organization for Standardization (“ISO”) – 14000, 26000, & 37101

ISO is a worldwide federation of national standards bodies (ISO member bodies). The work of preparing International Standards is normally carried out through ISO technical committees. For companies and organizations of any type that require practical tools to manage their environmental responsibilities, there’s the ISO 14000 family. ISO 26000 emphasizes the importance of results and improvements in performance on social responsibility but is not intended to provide a basis for legal actions, complaints, defences or other claims in any international, domestic or other proceeding, nor is it intended to be cited as evidence of the evolution of customary international law. ISO 37101 establishes requirements for a management system for sustainable development in communities, including cities, using a holistic approach, with a view to ensuring consistency with the sustainable development policy of communities.



  • Carbon Footprint Standard Certification
  • Carbon Trust Standard Certification
  • Climate, Community and Biodiversity (CCB) Standards Certification
  • Cradle to Cradle Certification
  • Environmental Product Declaration (EPD) Certification
  • Fairtrade (USA and International)
  • Forest Stewardship Council Certification
  • FSC Controlled Wood Certification
  • Global Reporting Initiative (GRI) Standards Certification
  • Gold Standard Foundation Certification
  • Green Seal Certification
  • Leadership in Energy and Environmental Design for Neighborhood Development (LEED-ND) Certification
  • Made Safe
  • Marine Stewardship Council (MSC) Certification
  • Non-GMO Project Verified
  • Rainforest Alliance Certification
  • Rainforest Alliance Sustainable Agriculture Certification
  • Responsible Jewellery Council (RJC) Certification
  • Socially Responsible Business Certification (SRB)
  • Sustainable Agriculture Network (SAN) Certification
  • Sustainable Forestry Initiative
  • Upcycled Food Association
  • USDA Organic
  • Vegan Certified
  • WaterSense
  • WELL
  • Women’s Business Enterprise National Council (WBENC)
Entity-based Certifications
  • Gold Standard Foundation Certification
    • This certification assesses projects that aim to reduce greenhouse gas emissions while promoting sustainable development and benefiting local communities. https://www.goldstandard.org/
  • Green Globe Certification
    • This certification assesses a company’s sustainability practices, including energy and water efficiency, waste management, and social responsibility. https://greenglobe.com/
  • Responsible Jewellery Council (RJC) Certification
    • This certification ensures responsible ethical, social, and environmental practices in the jewelry supply chain. It addresses key issues like human rights, labor rights, environmental impact, and product disclosure. https://www.responsiblejewellery.com/
  • SA8000 Social Accountability International Certification
    • This certification sets social standards for decent working conditions, including fair wages, working hours, and the right to join trade unions. It also covers child labor, forced labor, and discrimination. https://sa-intl.org/
  • Social Accountability Certification International (SACI)
    • This certification focuses on social accountability and responsible business practices, including labor and human rights, workplace health and safety, and environmental performance. http://www.saci-cert.org/
  • Socially Responsible Business Certification (SRB)
    • This certification evaluates businesses’ social responsibility performance and encourages continuous improvement. It covers areas such as corporate governance, community involvement, and environmental impact. https://www.srbcertified.com/
  • Women’s Business Enterprise National Council (WBENC)
    • This certification validates that a business is at least 51% owned, controlled, operated, and managed by a woman or women. This certification is widely recognized and can help businesses gain access to contracts with corporations and government entities that have supplier diversity initiatives. https://www.wbenc.org/
Product-based Certifications
  • Cradle to Cradle Certification
    • This certification assesses products and materials based on their environmental and social impact throughout their entire lifecycle, from production to disposal. https://www.c2ccertified.org/
  • Environmental Product Declaration (EPD) Certification
    • This certification provides transparent and verified information about the environmental impact of a product. https://www.environdec.com/
  • Fairtrade (USA and International)
    • This certification ensures that products are produced under fair and ethical working conditions, and that farmers receive a fair price for their products. https://www.fairtrade.net/
  • Green Seal Certification
    • This certification ensures that products and services meet rigorous environmental standards, including performance, health, and sustainability criteria. https://www.greenseal.org/
  • Made Safe
  • Non-GMO Project Verified
    • This certification ensures that products are free from genetically modified organisms (GMOs) and helps to promote transparency and sustainability in agriculture. https://www.nongmoproject.org/
  • Upcycled Food Association
    • This certification verifies food products made from upcycled ingredients, which are byproducts or leftovers from food manufacturing or processing. It promotes sustainability and waste reduction in the food industry. https://www.upcycledfood.org/
  • Vegan Certified
    • This certification verifies that products do not contain any animal-derived ingredients and are not tested on animals. It promotes ethical and sustainable consumer choices. https://www.vegansociety.com/
  • WaterSense
    • This certification promotes water-efficient products and practices that conserve water resources and reduce water and energy bills. It covers various products, from toilets to faucets to irrigation systems. https://www.epa.gov/watersense
  • USDA Organic
    • This certification ensures organic agricultural practices that minimize environmental impact and avoid the use of synthetic fertilizers and pesticides. It also covers animal welfare and food processing. https://www.usda.gov/topics/organic
Built Environment-based Certifications
  • Carbon Footprint Standard Certification
  • Carbon Trust Standard Certification
  • Leadership in Energy and Environmental Design (LEED)
    • This green building certification program recognizes best-in-class building strategies and practices. Developed by the U.S. Green Building Council (USGBC), LEED promotes sustainable building and development practices through a rating system that measures a building’s environmental impact and performance. Buildings that achieve LEED certification are recognized for their commitment to sustainability, energy efficiency, and the environment. There are several different types of LEED certifications that a building can achieve, each with its own set of requirements and criteria.  https://www.usgbc.org/leed
  • WELL
    • This certification promotes healthy indoor environments that enhance human health and well-being. It covers air quality, water quality, lighting, acoustics, and other aspects of building design and operation. https://www.wellcertified.com/
Environmental-based Certifications
  • Climate, Community and Biodiversity (CCB) Standards Certification
    • This certification assesses projects that aim to mitigate climate change while promoting social and environmental benefits for communities and biodiversity. https://www.vcsprojectdatabase.org/ccb
  • Forest Stewardship Council Certification
    • This certification ensures that forest products are produced in an environmentally responsible, socially beneficial, and economically viable manner. https://fsc.org/
  • FSC Controlled Wood Certification
    • This certification ensures that controlled wood products are not harvested from controversial sources, such as illegally harvested forests, forests where human rights are violated, or forests where high conservation values are threatened. It allows companies to demonstrate that their controlled wood products meet certain environmental and social standards. https://fsc.org/en/certification/forest-management-certification/controlled-wood
  • Marine Stewardship Council (MSC) Certification
    • This certification ensures that seafood products are sustainably caught or farmed and helps to protect ocean ecosystems. https://www.msc.org/
  • Rainforest Alliance Certification
    • This certification ensures that products are produced in a sustainable manner that protects ecosystems, improves livelihoods, and promotes social and environmental responsibility. https://www.rainforest-alliance.org/
  • Rainforest Alliance Sustainable Agriculture Certification
  • Sustainable Agriculture Network (SAN) Certification
    • This certification ensures sustainable practices in agriculture, including biodiversity conservation, responsible use of agrochemicals, and fair labor practices. It covers coffee, cocoa, bananas, and other crops. https://www.san.ag/
  • Sustainable Forestry Initiative
    • This certification promotes responsible forest management and conservation. It covers key aspects of forestry, including biodiversity, water quality, and climate change. https://www.sfiprogram.org/

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ESG in 5

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