Reforming Securities Litigation & Enforcement for ESG Disclosure

Abstract

This Essay argues that there is a fundamental trade-off that is important to recognize in the ESG context. That trade-off involves giving up what society gains on the margin from applying some aspects of the litigation and enforcement regime to non-financial ESG disclosure in order to get what society gains on the margin from the increased disclosure of the same variety that would result by not applying those aspects of the regime to that disclosure. I therefore further argue that ESG-specific reforms to the litigation and enforcement regime should be carefully considered for potential social welfare gains. After all, there is much skepticism on the scope of the gains associated with a number of aspects of the litigation and enforcement regime, yet much demand and room for non-financial ESG disclosure today.

Keywords: securities regulation, ESG, securities litigation, Securities enforcement