Law And More

Apollo Continues Pivot into Sustainability - Focus on Transition to Non-Fossil Sources of Energy and Game Theory

Recently, Apollo Global Management had announced it was creating the function of Chief Sustainability Officer.

The mission has been to review all investments in terms of its compliance with ESG criteria for Environment, Social and Governance principles. This Law and More article analyses the rewards and risks of that move.

On Friday, October 22nd, the financial giant expanded its reach and branding in sustainability. As it details in its press release it has bet big money on the energy transition to non-fossil sources. Here is the financialese:

"Apollo (NYSE: APO) today announced that funds managed by its affiliates (the “Apollo Funds”) have agreed to invest $824 million in a convertible equity portfolio financing agreement with NextEra Energy Partners, LP (NYSE: NEP) in a 2.5 GW renewable energy generation portfolio (the “Portfolio”). The Apollo Funds committed to the investment as part of the sale of 50% of the Portfolio from NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc. (NYSE: NEE) to NextEra Energy Partners."

That portfolio contains 13 utility-scale wind and solar assets. Of those, three facilitate battery storage. 

The transaction had been handled by law firms Allen & Overy and Paul Weiss. 

What does this mean?

Well. to begin with, it's a kind of what's called "virtue signaling." That is, the message is: We are on the right side of global values. Salvation for mankind entails the battery's replacing gasoline.

In addition, Apollo is leveraging its influence to confirm the importance of energy transition. That includes how investors should make their choices. Yes, investors, non-fossil fuels are the horse to bet on.

And, Apollo is positioning and packaging itself as being in the front lines of a business philosophy that goes by the umbrella term "ESG." Apollo publishes an annual report "The Apollo ESG Effect." Here you can read it. 

The stars are aligned that Apollo will impact the energy sector in a major way.

In the global corridors of influence what moves the dial on getting things done are the connections among the movers and shakers. Journalist Hedrick Smith explained those dynamics in his book "The Power Game."

It is interesting to note in Apollo's journey toward being the player in sustainability its long-time legal counsel has been law firm Paul Weiss. Yes, that firm oversaw this most recent transaction. 

The Paul Weiss Chairperson Brad Karp has been a first-mover in the law firm sector's embrace of ESG values. For example, it established the first ESG practice.

Also, on personal level, Karp has mobilized collective action throughout law firms to support causes associated with ESG values. They include push-back against suppression of voters' rights. Those initiatives reinforced Paul Weiss' presence for being a force field in social justice. That fits nicely where Apollo is heading. 

It also can be useful to observe that Apollo's actions may be based on a version of game theory. The genius John Nash brought the erudite discipline mainstream. Recently I have created material for a client on the implications of game theory for the crypto market. 

Essentially, game theory strategy is about optimizing outcomes through ensuring cooperation among those in the loop. That seems to be underlying how Apollo is going about sustainability. The self-interest of all the players is brilliantly locked in. 

Game theory is becoming an increasingly useful lens for assessing investing initiatives. Meanwhile, green is good. It's in the public interest. 

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The Great Firing & Suspected Leaks: Will This Shut Faucet Gush to Media and Other Reflections on Turbulent Times

What may have begun is The Great Firing associated with alleged leaking to the media.

Consequently, media outlets could find that the usual insider tipsters might go silent.

Legal tabloids like Abovethelaw in the U.S. and RollonFriday in the UK had developed their brand and business from leaks from internal sources. If those go kaput so could lots of their traffic.

Simultaneously, employers could establish more effective detection systems to identify leakers. 

At Netflix, the black pregnant leader of the trans resource group has been fired, reports The Verge. That's because of a supsicion of an unauthorized transmission of confidential data to Bloomberg. It had been allegedly related to how much Netflix paid for Dave Cahppelle's "The Closer" and the audience reach. The group had planned a walkout on October 20. Usually Netflix is a transparent player which encourages candid conversations. This development may be atypical. Or it could signal a shift in the culture.

Earlier, Ashley Gjovik, a former senior engineering program manager, was terminated in relation to Apple's antileak stance, reports 365NewsChannel. The specifics of this had been vague at the time of her termination.

But a week after that on September 15, a letter arrived fom law firm O'Melveny & Myers. Its spelled out details of intellectual property she had been accused of leaking.

However, she is in her final year of law school and asserts that the antileak employee policy as well as the strict employee handbook is illegal. Prior to her termination she had been outspoken in her criticisms of Apple. One beef had been about its association with alleged toxic chemicals.

Accusations about leaking, particularly data related with trade secrets, could be the legal tool employers leverage to tame activist employees.

Meanwhile, as the Rock Center for Coporate Governance at Stanford found in its research, that worker unrest is a major concern to the general counsel. Here is my article on such an issue published in O'Dwyer Public Relations. 

Both corporations, including its in-house legal department, and the employees are swept up in the chaos of changing values related to capitalism.

The Milton Friedman orthodoxy of the primacy of shareholder value is breaking down. There are growing demands for a broader focus. That is, there should be accountability for stakeholders ranging from employees to planet earth. Those frequently are summed up under the umbrella term "ESG,' that is, Environmental Social Governance.

Among the many understandings of “ESG” Investopedia’s is the most user-friendly. Essentially, it classifies ESG as a set of criteria for producing metrics on:

• The company's environmental imprint on planet earth.
• Its accountability for the needs of all stakeholders.
• The rules for operating the macro affairs of the corporation. That is, governance. (Be it WeWork or Theranos the alleged lack of proper govenance has become high profile.)

This confusion and its legal, political, stock price, branding, employee relations, and community implications have set in play a new kind of practice in large law firms. The shorthand title for it is "ESG."

The first in that niche had been Paul Weiss. That had been way back in April 2020. Its chairperson Brad Karp picked up on the perfect storm brewing. Here is how Paul Weiss had configured its ESG practice:

"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."

During an interview with Bloomberg Law, Karp added that ESG was not only impacting corporations. It was also going to be a force field in law firms. He noted: "'ESG is going to affect every aspect of the law firm world, law firm operations, and the interaction with their clients going forward,' Karp said. 'The law firm community hasn’t picked up on how profound that will be.'”

A sign of this upheaval about the purpose of a corporation, my recent article in ST Magazine on sustainabiity is receiving  considerable attention. 

Another aspect of employee unrest is striking.

In a very open manner - not through supposed stealth leaking - workers again are resorting to walkouts. Those, such as at Deere, are stragetically timed for the worst time for the employers. This is the season of harvest for Deere customers and they could be left out there without the parts their equipment needs.

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Politico, Under Alex Springer Ownership, Putting Up Paywall, Expanding - And Other Shifts in the Influence Game

Large law firms are not only inherently highly political. Those making partner have had to master the politics. 

They also usually officially or unofficially are engaged in lobbying. On its website, Squire Patton Boggs positions itself this way: Global Connections, Global Influence. 

Therefore, it should matter to them that Politico will be changing in two major ways.

The Wall Street Journal reports that after Alex Springer completes its $1 billion acquisition there will be a paywall and also expanded coverage. Regarding the latter, it will be increasing its manpower by 10%.

The paywall could be the tipping point cutting out some of the constituencies law firms have targeted for influence. They will have to research what the readership, post-paywall, consists of. 

And, more news provides an opportunity to expand their reach. They can pitch more content and opinion pieces. 

On the other hand, The Hill remains without a paywall. Getting material into it can be a powerful placement. What had resonated for months in the worst of times for America had been Dentons global head Joe Andrew's op-ed on how many low-income had no choice but to go into the workplace when COVID began. That was in April 2020.

Like everything else, the influence game keeps changing.

Big Law, especially those with Wall Street clients, has to rethink its dependence on establishment media, ranging from The New York Times and The Wall Street Journal. Instead it has to figure out the right tone and content for sites such as Reddit and TikTok. Most firms also don't know how to get attention on the professional social network LinkedIn. When they post they rarely engage readers. 

In addition, are the progressive players in Big Law preaching to the choir?

So much of their outreach is to like-minded progressives. Not enough bridges are being built with conservatives. Yet, that force field is growing in power and reach. They have their messaging down cold. Also, there's no counting out former U.S. President Donald Trump for 2024. The Harvard CAPS - Harris poll found that 58% of those surveyed would vote to return him to the White House. 

Yes, Big Law has funds to invest in advancing its and its clients' points of view. But there is so much money floating around. In itself the money is simply the price of entry. It has to do more than just put up the bucks. 

Of course, the midterm elections are already being written off as a disaster for progressives. But so also could be 2024 and beyond.

Yes, conservative messaging is winning out.  "Woke Inc.," which contends liberalism is destroying democracy, is a best-seller: 734 ranking on Amazon. Authored by successful entrepreneur and first-generation American Vivek Ramaswamy it argues persuasively against just about every manifestation of the current social justice movement.

Yet, as Bloomberg Law points out, many law firms are competing to pile on more and more social justice cred. Again, they might seek more common ground with those who support Ramaswamy's reform of not only politics but also business. As for the latter, he wants business to return to all-business and away from stakeholder capitalism or ESG.

Meanwhile, the very notion of what's in the public interest is in play. 

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Corporations Woke to the Profits in Social Justice, Hammers Vivek Ramaswamy: But That Is Money Hard-Earned

Vivek Ramaswamy's manifesto against business' supposed embrace of social justice, published in August, is a best-seller. The book is "Woke, Inc.: Inside Corporate America's Social Justice Scam." On Amazon, it ranks 705. 

Right from the get-go Ramaswamy, a successful entrrepreneur and first-generation American, is persuasive. He provides an example that resonates. It's Coca-Cola.

Lawyers will vividly recall how the chief legal officer there created a radical initiative for increasing diversity. That imposed quotas on outside law firms for having minorities on the account and docked those which didn't conform. Coca-Cola also took a stand against voter suppression in Georgia. In addition, it implemented anti-racisim training for employees.

Ramaswamy assesses all that as a kind of protective coloring that allows it to actually do "bad things" and make big profits. In the chapter "The Goldman Rule," he writes:

"Coca-Cola fuels an epidemic of diabetes and obesity among black Americans through the products it sells. The hard business decision for the company to debate is whether to change the ingredients in a bottle of Coke."

This approach to doing business is called "Stakeholder Capitalism." Another term for that is ESG (Environmental Social Governance). But the real game, he contends is: "pretend like you care about something other than profit and power, precisely to get more of each."

Those buying his book give it an almost "5" rating out of a possible "5." And the author is receiving glowing reviews from thought leaders such as Glenn Greenwald, journalist and constitutional lawyer, Ambassador Nikki Haley, Bill Ackman who founded hedge fund Pershing Square, and N. Gregory Mankiw of the Harvard Economics Department. 

So, "Woke, Inc." has touched a nerve. But what Ramaswamy doesn't get is that already there have been severe questionings of the tenets of Stakeholder Capitalism or ESG and various forms of push-back. Trying to make a buck off it doesn't go all that smoothly.  

The now-classic example has been the unraveling of Allbirds. Incidentally, it's yet to make a profit and is racking up large losses.

Among Allbirds' Woke efforts had been in governance. It gave permission to its board of directors to factor in other stakeholders, not just shareholders. Its marketing platform was sustainability-centric. For its IPO it established a sustainability framework which could be a model for others to leverage in their IPOs.

Then came the lawsuit seeking class action certification "Patrica Dwyer, et al.  v Allbirds" challening the claims. Here is a copy of the complaint. Allbirds has modified much of the sustainability material for its IPO filing. Media outlets have turned on it.

The raw reality is that many corporations are struggling to navigate the legal, public relations, stock price, employee activism, political, and community challenges associated with stakeholder capitalism. If they are making money from ESG, it's well-earned.

In response to the pickles corporations can get into during this era of stakeholder capitalism, most large law firms have established special ESG practices to guide them. The first of the law firms to anticipate the chaos had been Paul Weiss. Way back in April 2020 it had custom-made an ESG practice. 

Last August, a sign of these confusing times, Reuters Legal presented a case study of a corporation mired in ESG troubles and had law firms size up the situation and respond.

And Coca-Cola actually lost money on how it positioned and packaged its social activism outreach. Forbes reports that both those supporting and those opposing its middle-of-the-road stance on Georgia's voting law, threatened to boycott the corporation. The latter actually went through with that. Also, there was plenty of bad media.

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Bundling ESG and Investing/Antitrust - Is Progressive Politics Overplaying Its Hand?

"ESG and antitrust issues are starting to converge as Democrats seek ways to boost competition, while pushing companies to become better corporate citizens." - Bloomberg Law, October 10, 2021.

To help them do that the SEC, for example, had contracted with progressive think tank the Center for American Progress for recommendations. Here is that proposal.

Authored by Marc Jarsulic, it opens with an argument which could have been put out there by a conservative. That is, a recognition of the importance of how capitalism operates most efficiently. Nice protective coloring.

Here is how the proposal starts:

"The move in ESG to require this [environmental social and governance] information is based on a desire to improve the operation of capital markets. Capital markets function effectively—providing accurate market signals about corporate performance and allocating finance efficiently—when participants are well informed about how corporations are currently
performing and how they are positioned to respond to changes on the horizon."

But the intent isn't at all in line with the tenets of traditional capitalism. It could play out, if this guidance is followed, that in its approach to their duties, government entities such as the SEC and FTC would require corporate reporting on their activities to include metrics related to ESG. Those could range from carbon emissions to the cost of labor. 

Could progressive politics in the U.S. be overplaying its hand?

According to the recent Quinnipiac poll, Joe Biden's approval rating has plunged to 38%. That's significantly lower than Obama's had been during that time in his presidency.

The midterms are coming. It's expected that those elections will go badly for the Biden Administration. However, that's the usual dance with a new regime. The party in the White House traditionally gets decimated during the midterms. Control of the U.S. House will probably go poof. 

So, the midterms don't really provide an acid test of how the majority of Americans are experiencing the progressiveness of the Biden Administration agenda.

What could be the acid test is the response to this idea of imposing on U.S. business the double reporting and regulating whammy of both ESG principles and investment/antitrust reviews. What could follow soon enough is that all kinds of support, ranging from financial to media coverage, for restoring conservatism to the White House could wildly accelerate. That's what to watch: the intense mobilization of the conservative movement. Even progressives agree that the conservative messaging is more effective than what liberals are putting out there.

Meanwhile, large law firms which have custom-made new practices to assist their corporate clients with the unleashing of ESG fundamentals will be increasingly busy. Along the way are not only legal landmines. Also at risk are the stock price, brand, employee relations, consumer purchasing decisions, media coverage, and community support. 

Early to spot this need to protect clients had been law firm Paul Weiss. In April 2020, it launched the first-ever ESG practice. Here is how it is configured:

"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 an interview with Bloomberg Law, its Chairperson Brad Karp discussed the current challenges created by ESG. Those include what is impinging on the law-firm world itself. Karp observes:

“'ESG is going to affect every aspect of the law firm world, law firm operations, and the interaction with their clients going forward,' Karp said. 'The law firm community hasn’t picked up on how profound that will be.'" 

Actually, the ESG ethos could factor into what Law.com anticipates could be The Great Attrition. Once back in the office, junior lawyers could have that Ah-Ha moment: This is hell. And I don't have to do this.

That loops into the macro values shift taking place about the nature of work. ESG emboldened that mindset. Here is Law and More's analysis of The Office. Widespread exits of associates could stop dead the good PPP times rolling. The work won't get done. 

Obviously, ESG is mutating into a force field few could have anticipated. If it's fused in terms of reporting and regulation directly with oversight of other corporate functions - be they investor relations or market behavior - it could blow up the American brand of capitalism. Some may view that in a positive way. There has been a call for the softening of capitalism. Many others, who have the resources to oppose it, could make it their mission to destroy it, for a long time. 

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Sustainability - Now, It's Certification for Grapes and Wine

Bloldly, NY is a non-profit organization dedicated to promoting New York grapes and wines.

Odwyperpr.com reports that it is seeking an agency that can develop and execute a marketing plan for a certification program for sustainably-grown grapes and wine.

Sustainability has become the platform for everything from branding to structuring an IPO.  

But the pursuit is filled with landmines. That's exactly why large law firms have custom-made ESG (Environmental Social and Governance) practices to guide business through this new and volatile set of values, procedures, and processes.

The high-profile example of what can go very wrong is Allbirds. Once it had been saluted in the media and among green activists for its seeming total commitment to sustainability.

Now, it has been sued ("Patricia O'Dwyer v Allbirds") for allegedly misrepresenting its sustainability-centric promotions. Here is a copy of that complaint. And here is Law and More's early coverage of trouble in that branding paradise. More recently, Allbirds walked backed some of its sustainability claims in its filing for an IPO. 

Here is my article on sustainability published this month in ST Magazine. The focus is on how retailers can leverage this mandate for increased revenues and profits. The attention it is getting confirms that, despite the risks associated with ESG, it's considered a must-embrace in business. 

Marketing communications. It’s about results. Not quantity. Not clickbait. Not even influence. Together we will get those results. Clients range from American Express to industrial accounts. Fees customized for your unique budget. Complimentary consultation - janegenova374@gmail.com.

U.S. Crude Crosses $80-a-Barrel Mark - Get a Horse or a Smart Car (and back off law firms representing fossil-fuel corporations)

"U.S. crude rose more than 2% early Monday to a seven-year high of $81.50 a barrel, bringing its climb since the end of last October to more than 120%. If sustained, it will be the first time the U.S. oil benchmark closes above $80 a barrel since October 2014, when the shale revolution set off a multiyear slump in fossil-fuel prices." - The Wall Street Journal, October 11, 2021.

A major reason is: problems in supply. And one reason for that is inadequate investment by BigOil in the fossil fuel side of its business.

In this era of ESG (Environmental Social Governance) principles being applied to all businesses, old-line energy companies have been hit hard by myriad constituencies for remaining in fossil fuels.

Iconic had been the high-profile board-room coup orchestrated by small hedge fund Engine Number-One (aka The Little Engine That Could) at Exxon. More recently that investor activism has moved on to Chevron. Yet, alternates such as the electric vehicles are not ready for prime time and the consumer cost of EVs could be an obstacle to their going mainstream.

If the supply situation continues crude prices could continue going up. Of course, that could hobble the global economic recovery as COVID eases. Therefore, it would be bad taste to make a joke, given that grim scenario, that it's time to get a horse. Or a smart car - mine gets 40 miles to a gallon. 

Let's get to the chase: It now seems naive for groups such as Law Students for Climate Accountability to vilify law firms which represent corporations whose business is fossil fuels. Among them are Paul Weiss, Latham & Watkins, and Gibson Dunn. How is the world going to function until there is a full transition to new sources of energy? 

Unfortunately, given that ESG beliefs have hardened into orthodoxy, some media outlets seem to be reinforcing the perception of those law firms as the bad guys. Or, at least, those who should be questioned carefully.

In a wide-ranging Bloomberg Law interview with Paul Weiss Chairperson Brad Karp Roy Strom did introduce its controversial representation of Exxon. That part of the interview had been handled professionally on both sides, but it was still there. That showcases the looping in between ESG ideology and the media. Here is an excerpt:

"Paul Weiss itself has seen the fallout from activists who pressured the firm to drop ExxonMobil. The firm represented the oil giant and beat back a New York State claim that the company misled investors about the risks of climate change. Karp said there are certain types of matters and clients the firm wouldn’t represent, but he defended its work on behalf of its long-term client, Exxon. He said the firm’s victory at trial showed the case 'was, and without any basis.'"

BTW, there was another aspect of that interview which might have been labeled: A Funny Thing Happened on the Way to the Present: Media Stayed Stuck in the Past. 

Strom circled back to the 2018 dustup in The New York Times about Paul Weiss' all-white partner class. In ESG time that essentially had been light years away. Diversity hadn't been embedded in society's expectations about the right way for business to function. Also, the law firm did rapid course correction. 

The irony, of course, is that ESG itself has become controversial. In some circles, it is the bad guy.

That is playing out in lawsuits, regulatory agencies, planning for IPOs, and public opinion. The classic example is Allbirds. In response to its sustainability-centric promotions it is being sued in "Patricia Dwyer v Allbirds." Here is a copy of that complaint. On October 4th, it amended its IPO filing. 

In addition the wild west world of ESG investing is beginning to be tamed.

In both the U.S. and in Germany, government is investigating Deutsche Bank's DWS. One issue is how it reports on ESG investments.

Nevertheless, though, optimism prevails about ESG investing. Giant Apollo Global Management recently hired its first Chief Sustainability Officer. The function will review all businesses for sustainability issues. Of course, that all could sour. Currently, though, the move is assessed as smart. 

A sign of ESG times, my recent article in ST Magazine on sustainability is receiving lots of attention. Here you can read it.  

Obviously, the world is in flux. But meanwhile it still needs fossil fuels for industry, transportation, and even heating.  Green could be mutating into the enemy. 

UPDATE:

Stocks down 250.1 points, rising crude prices factor into the plunge.

The Wall Street Journal reports:

U.S. stocks fell on Monday on worries about slowing growth and mounting inflation, punctuated by a rally in oil prices. Front-month U.S. oil futures climbed 1.5% to settle at $80.52 per barrel, their highest level since 2014. Futures on Brent crude, the global oil benchmark, rose 1.5% to $83.65 a barrel, their highest settle value in three years.

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Big Law: Paul Weiss Chairperson Brad Karp Predicts Possible Bifurcation

"In a wide-ranging interview with Bloomberg Law, [Paul Weiss Chairperson Brad] Karp said the wealthiest Big Law firms will continue to pull ahead of the rest as recent surges in profitability make it easier for them to pluck rivals’ stars." - Roy Strom, Bloomberg Law, October 7, 2021.

This projection of a possible bifurcation in Big Law could play out as the game-changer in the business of law. And it's happening on the platform of law-firm resources. Yes, emerging is a whole new context of haves and have-nots, even in the elite circles of large law firms. For those without the needed resources, the day could come when the music died.

The first sign of this disruption, as Karp points out, is the ability to attract and retain talent for the law firm. Paul Weiss has quite the track record for poaching proven brandname lawyers from its competitors. Iconic has been the lateral hire of Karen Dunn from Boies Schiller. Recently, she won the Uber appeal of the Boston Taxi Conglomerate antitrust litigation. That had been Uber's biggest legal victory.

The reality has always been: Professional services, including Big Law, is all about the human capital. Paul Weiss has the resources to keep that growing.

Part of those resources are the "soft skills" of Karp. He is known throughout both the legal sector and progressive politics for this: his almost surreal know-how for sizing up social situations and figuring out the most effective approach. As thought leader Dan Goleman hammered in his breakthrough "Emotional Intelligence," that is usually the most significant factor in professional success. 

Karp's added edge in the EI box is that so many other chairpersons in Big Law around the world are stuck in their decision-making and rhetoric in a 1970s business ethos. The mindset is autocratic and the tone is arrogant.

That comes through downright cartoonishly in leaks from those firms. For instance, UK legal site RollonFriday had been tipped off by an insider at Moss Fallon of partner Justin Moss' war on the typo. The penalty could be termination. The big naughty. Yet, in Moss' own memo about that there had been a typo.

Through his networking, Karp has been able to expand the parameters of the traditional business of a law firm. He took a page out of the Ted Levitt (late Harvard Business School marketing professor) playbook for asking: What business are your really in.

Karp continues to ask that question. And among what he had come up with have been initiatives in social justice. The insight about those issues could have helped Paul Weiss configure, way back in April 2020, its unique ESG (Environmental Social and Governance) practice. In that current exploding category it had been The First There. 

Paul Weiss' most recent development in ESG has been partnering with a law school. Reuters Legal reports:

"Paul, Weiss, Rifkind, Wharton & Garrison has teamed up with the University of California, Berkeley School of Law to launch a first-of-its kind research initiative centered on ESG — the rapidly growing legal field of environmental, social and governance issues."

Big Law firms left behind might not be able to regain the previous traction. The world is changing too fast. That force field includes everything from technology to M&A as the preferred method for expansion (versus organic growth). 

As a public service to all of U.S. business, a business school might do a case study: How Paul Weiss got there and how it's staying there and more.

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ESG Everything - Is It Causing CEOs Burnout, Sucking Out "Fun" of Job?

Liberal The New York Times came down a la ESG (Environmental Social Governance) ethos on Coinbase Chief Executive Office Brian Armstrong. He was accused of ignoring the diversity issue of Black employees. That was back in November 27, 2020.

In addition, Armstrong had posted a blog commentary not empathetic to employee activism. He indicated that they had the choice of resigning. That did not get a good response. 

Last night on a Twitter thread, he warned about the possible results of such harsh scrutiny of CEOs. Those include burnout and decisions to just throw in the towel on a job in which they have been so successful. He perceives this kind of criticism of talent who gets results is analogous to how China is treating its effective business leaders. In addition, he added that what he was doing could become "no fun." 

Today Insider picks up on Armstrong's contentions. Given Insider's reach that means these concerns about what we might think of as the ESG value system could resonate with not only business leaders. Also, there could be those who are becoming alarmed at the chaos ESG could unleash in business. 

Already, the Rock Center for Corporate Governance at Stanford found in research that the corporate general counsel is nervous about the pressure points put on business by ESG.  Here is my article published in O'Dwyer Public Relations on that. 

Meanwhile, it is already happening that businesses leveraging ESG principles for marketing and attracting investors are being accused of allegedly overstating, maybe even illegally misleading with claims.

At the top of the list is Allbirds. Currently it has been slammed with lawsuit "Dwyer v Allbirds" challenging its sustainability-centric advertising. Also, it recently reframed the green claims in its IPO-application material. So much for the supposed good guys. 

Parachuting in to guide business, reports Law.com, have been the recently created ESG practices of large law firms. 

And there is all the money associated with ESG. Guiding investors when it comes to ESG is now huge financial player Apollo. Recently it created the position of Chief Sustainability Officer to integrate ESG fundamentals in all its investments.

Because ESG is being positioned and packaged as the right thing to do, that puts Apollo in the public-interest box. That could accelerate its journey away from the criticisms piled on by expose "The Caesars Palace Coup" by Sujeet Indap and Max Frumes. The kind of scrutiny of Apollo in that book is exactly the same kind of mindset which Armstrong points to as so corrosive to talent. Another expose "The Contrarian" by Max Chafkin does a similar hatchet job on extreme success venture capitalist Peter Thiel. 

Has ESG given license to the mob to torment talent?  William Shakespeare has lots to say about that in his dramas. This could end badly for the U.S. economy.

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Now Allbirds Follows Deutsche Banks' DWS in Scrutiny of Its ESG Dance - Apollo Global Management Entered Game in Big Way

Sustainability is a wobbly platform for an IPO. That's what once-darling of the ESG (Environmental Social Governance) niche - Allbirds - has found out.

In heading for the IPO (despite a loss of $21.1 million for the first half of 2021), Allbirds touted its unique sustainability public offering framework. Meanwhile, a proposed class action lawsuit "Dwyer v Allbirds" was filed. It challenged Allbirds' sustainability-centric advertising. Also, there is a new scrutiny of ESG investing since the investigations in the U.S. and Germany of Deutsche Bank's DWS. The issue there is how that investment arm reports ESG data.

No surprise then, before the IPO Allbirds is repositioning itself in the sustainability dance. Yes, the music died. 

PYMNTS reports:

"Allbirds, which calls itself an ethical shoemaker, had pledged to launch a “sustainable initial public offering.” Now, the company has gone back on some of its commitments ... Allbirds said late Monday (Oct. 5) that it had done away with several key parts of that idea, scrubbing the claim that the company is 'conducting this offering while following the SPO framework' and eliminating a warning that this could inflate the cost of the initial public offering (IPO) ..."

Actually, of the 65 references to the special sustainability framework those have been reduced to 33.

Now, the investment world as well as those of us with concerns about ESG investing awaits how the Allbirds IPO will play out. If it bombs, there could be plenty of rethinking about ESG investing. 

Meanwhile, the turbulence Allbirds has hit and the high-profile problems of DWS already should be sending a chill through the global embrace of ESG investing.

On the one hand, Bloomberg predicts:

"Global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management."

Also, yesterday gigantic Apollo Global Management announced the hiring of Dave Stanges as its first Chief Sustainability Officer. He will integrate ESG principles across all of Apollo's businesses. Here is Law and More's analysis of that move and its implications. 

Essentially, that puts Apollo in the ESG investing game in a big way. Also that stance supposedly on the side of the public interest can continue to help restore the Apollo brand after a series of scandals.

The most recent - and it's still hovering over this financial firm - is the expose of how it conducted itself during the bankruptcy of Vegas' entertainment icon Caesars. That's in the book "The Caesars Palace Coup" by Sujeet Indap and Max Frumes.

However, the delicious irony in all that for Apollo is this: Investors want to make make money. After reading about Apollo's aggressive behavior during the bankruptcy they could decide that's the horse to bet on. Maybe also, they could conclude that ESG investing is also the horse to bet on. After all, Apollo has committed to it. 

On the other hand, the issue in Apollo's enhanced embrace of sustainability and embedded in that total asset class is, bluntly put, this question: How sustainable it is?

Will there be too many regulatory, litigation, and return on investment matters raised during the next few years to make the category burdened with too many risk factors and with too small the ROI? 

Meanwhile, a growing source of business for large law firms is establishing specialized ESG practices, reports Law.com. Those guide corporations through the maze of legal, political, regulatory, social, stock-price, employee activism, and community matters generated by ESG principles. 

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