An Update on ESG Litigation Risks in the United States
Key Takeaways Early in the second Trump administration, the SEC has shown a less permissive attitude to company and investor engagement on environmental, social and governance (“ESG”) matters. While litigation efforts by state and private actors challenging ESG-policies have had mixed results, successes have been achieved where plaintiffs have focused on potential faults in decision-making […]

Cathy Botticelli, Rick S. Horvath, and Mark D. Perlow are Partners at Dechert LLP. This post was prepared for the Forum by Ms. Botticelli, Mr. Horvath, Mr. Perlow, Julien Bourgeois, and Stephen M. Leitzell.
Key Takeaways
- Early in the second Trump administration, the SEC has shown a less permissive attitude to company and investor engagement on environmental, social and governance (“ESG”) matters.
- While litigation efforts by state and private actors challenging ESG-policies have had mixed results, successes have been achieved where plaintiffs have focused on potential faults in decision-making processes or disclosures.
- Any legal requirement to oversee business, and thus ESG risks, remains an open question under Delaware law.
We previously wrote about litigation developments related to the growing ESG backlash in the United States. Since our last guidance, there have been a number of developments impacting litigation risk, including regulatory actions in the aftermath of the election of Donald Trump to a second term as president, continued refinement of anti-ESG theories being pursued by “red state” attorneys general, and mixed litigation results impacting ESG-decision making. We summarize these developments, as well as strategic considerations for corporate boards and investment managers in light of broader market considerations, below.