ESG-Litigators at the Gate

Sustainability and Greenwashing in the Financial Sector - New Risks for Institutions, New Opportunities for Investors and Activist Shareholders?

ESG litigation has been publicly known for some time, especially in the form of so-called "climate lawsuits" to reduce corporate CO2 emissions. Recently, however, the topic of ESG litigation has also reached the financial sector. Under the buzzword "greenwashing," many players in the financial market are facing accusations of fraudulent labeling: The ESG financial products they launch or distribute are in fact anything but ESG-compliant, green or sustainable.

 Accusations of greenwashing are particularly sensitive because affected companies are being directly heckled by several government investigative agencies. The public prosecutor's office is investigating on suspicion of capital investment fraud, and the Federal Financial Supervisory Authority is investigating on suspicion of violating regulatory requirements. But who will take care of the financial losses suffered by shareholders of affected companies and investors in allegedly "green" financial products? The issue is particularly sensitive for institutional investors, as their investors are paying increased attention to sustainable investment policies, and they must account for bad investments. Are these injured parties entitled to civil damages and can they enforce them in state courts through private enforcement?

 These and other questions related to ESG litigation and greenwashing are answered by two attorneys from probably the best-known US plaintiffs' law firm: Simon Bishop and Dr. Philipp F. Hardung of Hausfeld.