Law And More

Deutsche Bank's DWS Group - Sign of Escalating Questions/Confusion about ESG Investments

"Deutsche Bank AG’s DB -3.02% asset management arm, DWS Group, DWS -0.30% tells investors that environmental, social and governance concerns are at the heart of everything it does, and that its ESG standards are above the industry average. But behind closed doors, it has struggled to define and implement an ESG strategy, at times painting a rosier-than-reality picture to investors ..." - The Wall Street Journal, August 1, 2021.

The former executive who presented that struggle to the executive board had been the head of sustainability - Desiree Fixler. She had been fired. That termination was done very soon before the annual report was released. The formal report provided a positive take on the DWS Group's ESG Investments. Was there a cause-effect factor or a correlation between the candid disclosure and the termination? That may never be known.

But what is known is that there are growing questions and escalating confusion about ESG investments. According to MorningStar data, every day $3 billion flow into that niche.

Those questions and that confusion should be no surprise.

There's no clear definition what constitutes this particular kind of investment. That is, one which does double-duty: delivers a return to shareholders and does good for society.

It's a little bit of a stretch to say that an ESG investment can be whatever you call an ESG investment. But not that much of one.

On the Bloomberg Law podcast "Parts Per Billion," David Schultz explains how loosey-goosey this investment niche is. It represents an essentially unregulated area. Yet trillions are in these investments globally. 

That could start to tighten up. In the Biden Administration there is an overall focus on more disclosure for investing in general and specifically for ESG funds. SEC proposals for this could begin to be released in October or November. Probably the first step would be to put in-place a standard for what could be classified as an ESG investment fund.

In addition, the CFA Institute is also pushing for guidelines as to what constitutes an investment labeled ESG. 

Meanwhile, as Schultz points out, this lack of regulation hurts every player in the game. A scandal about one investment could throw shade on all ESG investments. Think about it. There is an expose about one investment. Quickly, it could become obvious that no one knows what the hell an ESG investment is or isn't. The niche could be shaken to the core. Billions or even trillions could be lost.

Obviously, the corporations in which those ESG investments are made could also be caught up in any unraveling. Currently they wear halos. However, those halos could also become quite wobbly as more questions are asked.

Are they really green? As with Exxon, there could be radical action. Small hedge fund Engine No 1 pulled a board coup by persuading other investors that the corporation wasn't green enough. 

How they manage their global supply chain could be assessed as downright inhumane. An outcry could follow to dismantle parts of that chain.

They call that "diversity?"  Sure enough there can be a boycott until the business walks the line on that one. 

Riding to the rescue could be the ESG practices which major law firms have recently established. Those have anticipated the rethinking of what is the role of the public company today. In more simple times that was thought to be to provide a return to shareholders.

An early adopter of those ESG practices has been elite law firm Paul Weiss, chaired by social-justice activist Brad Karp. On its ESG website, Paul Weiss states:

"Interest on the part of investors and other corporate stakeholders in environmental, social and governance matters has surged in recent years, and the current economic, public health and social justice crises have only intensified this focus. We are committed to providing guidance on critical sustainability and ESG issues for companies and their in-house counsel."

More specifically, Paul Weiss puts its ESG mission this way:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

The interesting thing about this particular law firm is that it is a Wall Street one. That could mean that its clients could experience a crisis in their ESG investment lines of business. This law firm as well as others serving the financial sector would be representing those clients on regulatory, legislative, and litigation issues associated with ESG investing per se. 

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ESG Investing - The Halo Can Get Wobbly

Like wellness and healthy eating, ESG investing has a halo effect.

But, that halo could become wobbly. That's exactly because, again just like wellness and healthy eating, there's no clear definition what constitutes an investment which does double-duty: delivers a return to shareholders and does good for society.

It's a little bit of a stretch to say that an ESG investment can be whatever you call an ESG investment. But not that much of one.

On the Bloomberg Law podcast "Parts Per Billion," David Schultz explains how loosey-goosey this investment niche is. It represents an essentially unregulated area. Yet trillions are in these investments globally. 

That could start to tighten up. In the Biden Administration there is an overall focus on more disclosure for investing in general and specifically for ESG funds. SEC proposals for this could begin to be released in October or November. Probably the first step would be to put in-place a standard for what could be classified as an ESG investment fund.

In addition, the CFA Institute is also pushing for guidelines as to what constitutes an investment labeled ESG. 

Meanwhile, as Schultz points out, this lack of regulation hurts every player in the game. A scandal about one investment could throw shade on all ESG investments. Think about it. There is an expose about one investment. Quickly, it could become obvious that no one knows what the hell an ESG investment is or isn't. The niche could be shaken to the core. Billions or even trillions could be lost.

Obviously, the corporations in which those ESG investments are made could also be caught up in any unraveling. Their halos could also become quite wobbly as more questions are asked.

Are they really green or green enough? As with Exxon, there could be board coup.

How they manage their global supply chain is downright inhumane, isn't it? An outcry follows to dismantle that chain.

They call that "diversity?" We will boycott you until you get real on that issue.

In any event, even before an actual scandal, close scrutiny is bound to kick in as those SEC proposals become discussed in the business and legal media. There could be that Ah-Ha moment among investors.

Riding to the rescue could be the ESG practices which major law firms have established amid all the current controversy about what is the role of the public company today. An early adopter in that has been elite law firm Paul Weiss, headed by social-justice activist Brad Karp. On its ESG website, Paul Weiss states:

"Interest on the part of investors and other corporate stakeholders in environmental, social and governance matters has surged in recent years, and the current economic, public health and social justice crises have only intensified this focus. We are committed to providing guidance on critical sustainability and ESG issues for companies and their in-house counsel."

More specifically, Paul Weiss puts its ESG mission this way:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

The interesting thing about this particular law firm is that it is a Wall Street one. That could mean that its clients and those financial firms which could become clients could experience a crisis in their ESG investment lines of business. The law firm also would have to get right in there on that too.

Reflection: Over and over again it happens that the halos planted on X or Y are wrongly placed. The corridors of business are filled with saints soon enough judged sinners. The most recent example of that is Bill Gates. Yet, the halo ritual goes on and on unabated. 

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Becoming an ESG Company - Expected, But Not Easy

It seems like light years ago when BlackRock's Chief Executive Officer Larry Fink told shareholders that it was necessary to go beyond the bottom line. Added to that, Fink explained, had to be a contribution to society. That was 2018, recounts Thomson Reuters.

Fink's statement constituted part of the foundation on which ESG (Environmental Social and Governance) has been built out.

Elite law firms such as Paul Weiss, chaired by Brad Karp, soon had full-service ESG practices. Paul Weiss' had been started in April 2020 Here's how that particular law firm defines its ESG mission:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

However, Thomas Reuters points out that  many midsized and small businesses haven't yet developed an ESG mindset, policies, and initiatives. "Becoming an ESG company" is now expected. That assumption had been accelerated during COVID when business was considered part of the we're-all-in-this-together ethos.

But without the resources of a giant corporation starting on the ESG journey can be so challenging that it seems unthinkable. Those businesses recognize that ESG is a whole different kettle of fish than the old-line Corporate Social Responsibility. 

At MasterCard the Executive Vice President of Corporate Sustainability Shamina Singh provides in the Thomas Reuters article tips for midsized and small businesses to take the first steps.

The first of those is to seek out legal counsel. Paul Weiss, an early adopter in the ESG space, saw how much ESG issues would intersect with legalities. During the Biden Administration that will be even be more the case. Actually its aggressive regulatory stance could make it necessary for all business to loop into versions of ESG.

Singh also fingers the importance of a business to know its strengths and then leverage those in ESG. For example, that might be with its location in an inner city and unique network of contacts it can be innovative in diversity. It could even develop a template for large corporations to use. Its ESG approach doesn't have to be to implemented in all three of the traditional parts of ESG. Yes, businesses can and should choose their shots. Business X can be known for green in packaging. Business Y for pivoting to a transparent culture.

To stretch limited resources, those midsized and small business should seek out partners. Sources for that range from other businesses to clients/customers and vendors. The partnering can include access to models which have been effective. 

And, Singh emphasizes that it's not only possible to be proactive. It's the way to go. Don't just sit there and wait for a crisis. Pilot initiatives now.

Of course, there's the question: Is ESG a craze, the business version of the hula hoop, not a sustainable (to use that in word) trend? On a pragmatic, not theoretical, basis that's irrelevant. Right now most constituencies be they investors or consumers expect the presence of at the very least ESG values.

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Activision Blizzard's Workers Did Walk Out - Bobby Kotick's Crisis Management Was Too Little, Too Late

The drama at video-game creator Activision Blizzard hasn't let up. 

There had been a chance it would. That was when the head guy Bobby Kotick did a mea culpa and announced he had contracted with law firm Wilmer Hale to investigate allegations about a "frat house" culture.

Before that, the California Department of Fair Employment and Housing had filed a lawsuit against the corporation for sexual misconduct and more. The more includes that only 20% of employees are female. Employees experienced Kotick's reponse to that lawsuit as tone-deaf. They threatened to walk out. 

Kotick had been struggling to prevent the employees from doing that yesterday. But walk they did.

The Guardian reports:

"Employees of Activision Blizzard, the video game company that produces World of Warcraft and Call of Duty, staged a walkout Wednesday morning to call for better working conditions ... Hundreds of workers gathered outside the company’s headquarters in Irvine, California, Wednesday morning while others, unable to attend in person, took part in a virtual protest."

Yes, that made a nice photo-op for the media.

Also, as Bloomberg reports, fans are threatening a boycott.

Meanwhile, the stock is still down. After the announcement of the lawsuit, it had plunged. Yesterday it had closed at 84.82. That was down from the 52-week high of 104.53.

So, what should other corporatons be pondering? They have to ask themselves:  Could we be the next Activision Blizzard? And what should we do about that?

The first stop should be, obviously, at your law firm. Cutural issues are pivoting into legal landmines. Activision Blizzard is the most recent example of that.

If your law firm is state-of-the-art as is Paul Weiss, it will have in-place a practice customized to help you navigate both internal and external crises as values keep shifting in business. The common moniker for that is ESG (Environmental Social and Governance). Essentially ESG focuses on what has been added to corporate responsibilty beyond the bottom line. That ranges from the well-being of employees to protection of the enviroment. 

Chaired by Brad Karp, Paul Weiss launched in April 2020 its ESG practice. Here is what it does: 

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

Note that its mission explicitly includes "crisis management."

The meme-in-waiting could be: Not being the next Activision Blizzard.

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Not the Millennial Way and Other Matters of Culture, Legalities and Innovation - From Jones Day to Wall Street to BigTech

"Financial transparency is an extension of the way young adults conduct the rest of their lives, including their openness on social media." - Svati Kirsten Narula, The Wall Street Journal, May 3, 2021.

Another generational shift: Millennials regularly share information about their salary and other money issues. The implications are huge for old-line organizations like Jones Day which make it a matter of culture to keep compensation secret. In the war for talent, the Jones Days could find themselves quite unattractive to youth.

This goes beyond the numbers in the paycheck, of course. Cultural matters are huge. McKinsey & Co. found that culture directly impacts financial performance, creates differentiation (think brand), and accelerates the ability to adapt to change. 

And, increasingly, the members of the workforce are shaping the culture. That could mean, for example, remote is here to stay. The Conference Board survey found that 55% of Millennials are reluctant to return to the office. 

But it isn't only the Jones Days which have plenty of rethinking to do about the soft stuff - that is, values which create the human touchpoints (as well as the contractual policies) for a business.

Employee activism has become the norm in BigTech such as Apple and Amazon.

Media centers are making a list and checking it twice about what cultures are naughty and which are nice. Then they zero in with punitive coverage. Post the Trump phenomenon, that's the new clickbait. 

And, consumers expect the brands they're associated to walk the line in social justice.

The transformations which will be in play increasingly will involve law firm ESG (Environmental Social Governance) practices. They have to.

That's because the shift to a culture co-created by myriad constituencies is complex and characterized by plenty of passion. It can't avoid hovering near the third rail of legalities. Consumer activist Ralph Nader taught Everyman and Everywoman to go to court. Business should expect plenty of legal action.

Law firms had to anticipate this. And, in April 2020, law firm Paul Weiss, chaired by Brad Karp, did just that. It launched a comprehensive ESG practice which covers it all - soft and hard. 

Here's the short version:

"Paul, Weiss’s Sustainability and Environmental, Social & Governance (ESG) Advisory Practice helps clients develop integrated ESG strategies that safeguard corporate reputation, mitigate risk and leverage opportunity."

The edge that law firm has in this - both in branding and operationally - is that it also has been an early adopter in inventing new approaches to addressing social justice issues. Classic now is that COVID Resource Center it engineered through a collaborative effort with thousands of lawyers from other firms. Of course, that's been a life-saver, literally, during this Delta variant. 

Not hyperbolic: Only that kind of innovation in resetting cultures could prevent the diaspora of talent.

Meanwhile, Wall Street is already losing a generation of workers.

Top-down tech corporations like Apple could also find themselves in that pickle.

Jones Day? Time will tell.

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Apollo Fund Rebrands - Wealth Also Requires Reputation Restoration and Lots of Help from ESG Practices

"Father, forgive me. I had acquired wealth."

Finally, sizes up Bloomberg, the Apollo Fund is moving out of the shadow of scandal. Investors are re-committed. 

The specifics of the previous Apollo brand tarnishing included media-grabbing tidbits like association with Jeffrey Epstein. 

Okay, Epstein was a bad guy.

But the intensity of the hit to the Apollo brand and its one-time head Leon Black is not really about that, is it? The root of the self-righteous hysteria seems to be this: America's ambivalence about wealth. Both institutional and personal. 

On the one hand, the Puritan ethos had the acquisition of wealth as a the play-out of the right moral values. The lack of it was interpreted as a lack of those. That's not gone away. Shame on you. You're not on the list of billionaires under-40.  

On the other hand, there is the embedded meme: Money is the root of all evil. Had Black not possessed such personal wealth he wouldn't have been able to have become involved in a romantic dalliance resulting in a lawsuit against him and a countersuit by him, right. We're certain of that. We praise MacKenzie Scott for giving away so much of her wealth.

The problem is that the ambivance (along with the certitude) is growing. That means so much confusion. 

On an individual level, the Hamptons had become a symbol of decadence. The media does photos of disgraced "Today" executive Matt Lauer you know where: the Hamptons. 

As for institutional wealth. Where to begin. Yes, folks want the returns on their investments in public companies to be amazing. Simultaneously they want the corporations producing them not to showcase wealth in terms of power and influence.

No, they shouldn't be dictating where the employees are working from.

No, they cannot choose whom they want to hire.

No they can't just operate the business when there is so much suffering in the world. And, the brass is getting paid too damn much. Wall Street? You don't want your kid training there as a junior analyst. And as a lawyer do you want to work at a BigLaw firm representing Wall Street? 

A proven out public relations firm like Edelman might have to be parachuted in to design a campaign for rebranding wealth as an economic-growth necessity. It's like the car industry is the 1950s. What was good for GM was good for the creation of the middle class. Only the creation of more wealth now will restore that middle class. Tighten that up as a message.

In addition, corporate leadership has to get smarter about identifying where the landmines are on this one and how to not step on them. That's the rub. What was a standard value a month ago is verboten yesterday and today who the hell knows. Check your values before you start announcing policies this morning.

That's why law firms' ESG (environmental, social, goverance) practices may be evolving into the most critical service to current clients and to prospective ones. That could be inventing a new category of what law firms do, in addition to the traditional transactional and litigation segments. Actually, that could be more important than the latter two. Will law firms come to declare that the real business that they are in is saving American capitalism? Part of that is figuring out social justice for the clients.

Paul Weiss, chaired by Brad Karp, has captured that new core function of a law firm in how it has positioned and packaged its own ESG practice mission.

Essentially the language is code for how to succeed despite what's happening externally and internally (employee activism). The current cultural upheaval doesn't get corporations off the hook for producing over-the-top financial performance. But they better do that and communicate about that in ways that walk the line on the perception of wealth.

Here is the Paul Weiss mission:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

Meanwhile, the Delta variant has introduced more uncertainty. Folks don't like that. Individuals and organizations with wealth will likely be taking it on the chin. There could be greater expectations of help from them as well as vilification of what they are assumed to be about. Give us your money and get out of our sight.

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Lordstown Motors - More Woes (economic prospects for region darken)

"Electric-truck startup Lordstown Motors Corp. confirmed the Justice Department is probing its business, investigating matters related to its reverse merger deal last year and preorders for its forthcoming pickup truck, the Endurance." - Ben Foldy, The Wall Street Journal, July 16, 2021.

Lordstown Motors disclosed this probe by the U.S. Attorney Office in Manhattan in a regulatory filing yesterday. However, The Wall Street Journal had already outed this develoopment on July 2nd.

In addition, the SEC is investigating Lordstown Motors.

These investigations add to the challenges this EV producer is facing. Overall, the EV space is constrained by the high price of the vehicles and the shortage of charging stations. 

If the folks in the area - Youngstown, Ohio metro - were placing their financial hopes on Lordstown Motors they could find themselves disappointed. Earlier there had been the economic setback of GM shutting down its Cruze subcompact production facility. That had gone from three shifts to a shuttered site.

Over the years, while neighboring Pittsburgh, Pennsylvania regrouped economically the Youngstown region stayed stuck in time. It hadn't diversified its industries.

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3 Strikes and the Story Is Out: Kamala Harris Alleged Toxic Management Style (and corporations aren't sitting pretty either)

First Politico

Then BusinessInsider

Now, the New York Post. Here you can read it hot off the press.

All three contain interviews with current and former staffers of Kamala Harris, in four different professional settings. The settings are: as current U.S. Vice President, San Francisco District Attorney, California Attorney General and the U.S. Senate.

The narrative could be summed up this way: Allegedly, Harris injected toxicity into the workplace. It has been contended that she was impatient with staff, often without justification. That included hanging up if she had not gotten the answer she wanted. There were claims of a culture of paranoia. 

Should Harris' boss U.S. President Joe Biden call in law firm Jenner & Block? As Bloomberg Law reports, Jenner & Block recently has launched a new practice which handles formal investigations of alleged toxic workplaces.

Executives at Deloitte U.K, and KPMG U.K. had to step down from their big jobs because of accusations of bullying. 

Rapidly, that kind of behavior by a leader or a manager is becoming a transgression that is unforgivable. If it involves sexual misconduct, even if alleged and not proven, then a comeback from such a scandal seems to be impossible. Neither broadcast executive Les Moonves nor Matt Lauer has been able to make any progress in reputation restoration. Yet, someone like Mike Milken, who had served time in prison for a financial crime, has been able to reimagine his brand as a respected high-profile philanthropist. 

This selective focus on certain kinds of behavior which are considered beyond redemption - and others given absolution by society - mirrors what is going on in a more general and sweeping way in American business.

According to recent research by a team headed by Michelle K. Lee, chief executives are more likely to lose their jobs because of a wrong call on social justice issues than a financial blunder. The axing would be done by investors. That report is titled: "The Distinct Effects - and CSR-oriented Shareholder Unrest on CEO Career Outcomes." It is published in the Academy of Management Journal, November 1, 2020.

It has become almost a necessity for corporations to seek out the new kind of services law firms offer to guide executive decision-making and actual behavior during this era of values beyond the bottom line. Like Jenner & Block's toxic-workplace practice, this one essentially is involved with soft issues. However, they can generate everything from litigation to a plunge in the stock price.

Among the law firms which have been early adopters of practices oriented toward assisting corporations to navigate the complexities of this disruption in values is Paul Weiss, chaired by Brad Karp. It goes by a moniker as broad as its mission: Sustainability & Environmental, Social and Governance (ESG) Advisory. The way Paul Weiss positions and packages that mission is:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

My hunch, just as McKinsey & Co. discusses in its latest article about hybrid work arrangements, is that the very nature of work will become an ESG matter. Law firms probably have already geared up for that development. 

Like as the Industrial Revolution changed how and where people worked, the impacts of COVID, along with an upheaval in society's mores and technology, mandate a total rethinking of work.

If corporations make the wrong moves on this one, their brand could be set reeling. So could the stock.

Meanwhile, language or how we talk about work will be among the first thing to change. Gen Z will see to that. 

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Associates - You Probably Don't Know What You Want, At Least Not Yet

There has been a seminal shift.

In its July 9th article  "It's time to get real about hybrid work," McKinsey points out the massive disconnect between how employers see the where-to-work matter and how employees see it.

For both, the percentage is three-quarters.

Employers hammer culture and the sense of belonging issues for a return to the office - the more days there the better.

On the other hand, employees want as much time remote as possible.

But in that disconnect there is embedded another issue. It's this, as McKinsey puts it:

"Employees don’t know what they want and are reevaluating their relationships with work"

Meanwhile, globally, 40% of employees plan to leave their jobs by the end of the year.

All the hoopla about record associate compensation has masked the more seminal matter of those employees' values. After enough of those years of 100-hour weeks and after the student loans are paid off, what will associates come to decide they want?

Like the rest of the global workforce, associates might not know what they want.

Tradition is on the side of earning the big bucks in a big-name law firm. No matter the physical, emotional and spiritual cost.

But, come on, surely, soon enough, we will be hearing about "Another Gabe MacConaill," only on the level of associate, not the partner one. In a November 12, 2018 article, the widow of that suicide Joanna Litt accused BigLaw as being responsible for her husband's death. 

If there is that kind of tragedy among associates, the thinking about what they want could be speeded up.

This kind of questioning loops in with the current harsh assessment of capitalism as we have known it. Because of that questioning the values of business in the U.S. have been extended to include non-traditional categories such as voting rights.

Much of that is playing out under the umbrella term "ESG." Prominent law firms such as Paul Weiss, headed by Brad Karp, anticipated such an upheaval. To guide their clients and attract new ones about 16 months ago Paul Weiss established a full-service ESG practice. Here is how Paul Weiss' positions and packages that kind of navigation system for corporations:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

The struggle of corporations to adapt to values beyond those of traditional business could significantly increase when workers figure out what they want.

The same kind of reimagining might occur in law firms. Already, how law firms are structured and managed is being put in play by the captive phenomenon. As the report by Thomson Reuters on Alternative Legal Services Providers (ALSP) documents, captives represent the fastest growing element of ALSP. That is to reduce the cost and increase the efficiency of the delivery of legal services. Captives are configured very differently than the partnership model in law firms. Can the two be brought into synch? 

Obviously the where-work-is-done issue can blow up business-as-we-have-known-it worldwide. That upending could include the expectations of law firm partners about associates. It's no longer unthinkable that the associates could abandon their posts just like the workforce at Burger King. Also, it may no longer be unthinkable that going up against the conventional power structure is possible and without being a career-ender. 

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Tax Transparency Becomes Most Recent ESG Mission - The Triple Bottom Line Messes Directly with THE Bottom Line

"Corporate tax departments are facing an under-the-radar element of ESG-focused activist investing that’s gaining traction and would more directly affect bottom lines than the addition of women and minorities to corporate boards or publishing environmental impact reports." - Bloomberg Law, July 6, 2021.

This push for tax transparency, along with the end of "tax planning," could be the tipping point for corporations to push back on The Triple Bottom Line.

They might have "gone along" with myriad triple Bottom Line (People, Planet Earth, Profits) or ESG (Environmental Social Governance) demands of investors and activists. But how they pay (or not pay) their taxes is embedded in the way business operates in America. At this point, they could decide it's time to push-back and maybe not in a stealth manner. 

For example, corporations have to stop House Bill 1187 from gaining any support in the Senate. That is all about tax disclosure. 

In the court of public opinion they have to get out that old-line message about the positive impact corporations have on the American economy. That had been standard in the 1970s. Recall that mantra: What is good for General Motors is good for the nation. It took lawyer-activist Ralph Nader to document that General Motors wasn't even good for the safety of the nation when it went on the road with its cars. 

But the public relations part could be tough sledding. The Biden Administration's agenda includes having corporations pay their fair share of taxes. This ESG outreach reinforces that message. 

Of course, corporations could also be turning to their law firms' ESG practices to guide them about every aspect, from legal to the branding, of the tax-disclosure focus. This latest development could precipitate a genuine crisis. Think everything from protests to boycotts to social network mayhem. 

As the law firm ESG practices such as at Paul Weiss, chaired by Brad Karp, are structured they provide a kind of one-stop shopping for the new complexities created by this championing of the Triple Bottom Line.

The Paul Weiss approach positions and packages those realities this way:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

In essence, what the ESG front lines on this want is for U.S. corporations to become more like European and Australian ones. Both business cultures embrace the notion that they should pay their fair share in taxes to support everything from the community to the national infrastructure.

On a broader basis, 130 nations have created a proposal for a multinational tax rate of 15%. Therefore, corporate resistance to tax transparency is also going up against international opinion. 

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