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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Gearing up for the Metaverse, Facebook Is Reported to Be Changing Its Name Next Week - Reed Smith Is Already in That Space

Facebook could be pulling the legal - and marketing - coup of all times.

With its metaverse concept, it could be escaping so many of the legal challenges associated with everything from social media to antitrust. That's primarily because the metaverse is post-internet. It could introduce the same kind of wild-west legal confusion the internet initially did. Facebook will be liberated again to move fast and break things before the legal system fully catches up to it. 

In marketing, Facebook could be establishing a whole new platform on which to sell hardware. To participate in the metaverse special virtual reality equipment could be required. Or strongly prommoted for enhancing the experience. Also, marketing in the metaverse will open whole new opportunities for Facebook's advertising units. Just think about D2A - that is, Direct-To-Avatar.

In conjunction with this shift, reports have it that Facebook will change its name next week. As yet, few, even high level executives in the corporation, know what that new name will be. Here is Verge on that.

According to Katie Canales at Insider, the "metaverse" is:

"... virtual space where humans — tethered to the physical world — can operate using virtual and augmented reality-powered avatars and exist in both places, losing touch on what's real and what's not." 

Obviously, that provides a wonderful exit from this life as we know it. That has been the meme of the sci-fi by Neal Stephenson's books. One can wonder: Could the metaverse as escape zone reduce substance abuse?

But what's important to lawyers is how lawyers define the metaverse. Reed Smith lawyers are among those doing the defining.

That law firm is an early adopter in the metaverse space. The analogue is this: Paul Weiss, chaired by Brad Karp, had been the visionary in the emerging value shift known as ESG (Environmental Social Governance). Paul Weiss formed the first ESG practice to guide its corporate clients through what was going to be a perfect storm. 

As Jenna Greene at Reuters Legal reports, the lawyers at Reed Smith collectively say:

“One way to describe it is the increasing permeability of the borders between different digital environments and the physical world ... Imagine stepping into a cyberworld: The metaverse is a space where you can interact with virtual objects in real life with real-time information.”

Last May, Reed Smith issued the 76-page white paper "Reed Smith Goes to the Metaverse." The authors for the Introduction are Gregor Pryor and Stephen Sessa. Then each section has several authors.

Here is a copy of that white paper.

It discusses issues such as:

Intellectual property

Artificial Intelligence

Data protection and privacy

Content Licensing

Ownership of the metaverse

Distributed ledger technology and non-fungible tokens

Bitcoin and other cryptocurrencies

Reputation and deepfakes

Managing antitrust and competition risk.

Yes, metaverse uses decentralized digital assets like blockchain which can be leveraged as payment for goods and services. And lots of goods and services will be sold in the metaverse. Only very differently than what's standard currently.

In the first paragraph of the white paper, Reed sets a tone of excitement and optimism:

" ... the metaverse offers human beings the opportunity to collaborate, transact, perform, argue, and create as has never been
seen before in history. It enables our alternative selves."

The paper also predicts the metaverse will change so much. That includes work, socializing, and how humans go about their daily lives.

What is of immediate interest to most professionals is how the metaverse provides unique ways to collaborate. For lawyers, who increasingly will be working at least part-time remotely, this could be a key tool. It could also persuade the law firm leadership to allow for a distributed workforce operating wherever

Already Facebook has rolled some of that out in Horizon Workrooms, explains Frame:

" ... Horizon Workrooms [is an] app that uses VR to bring colleagues together in a more immersive way than the grid of faces that Zoom has made the norm. Experienced through Facebook’s headset Oculus Quest, Workrooms uses features like spatial audio-and-hand tracking to give people a better sense of being in a real room together."

That, of course, is just the beginning.

In my field of marketing communications, this notion of collaboration can take the form of interacting in virtual reality with consumers. That can create fresh kinds of consumer experiences and touchpoints. An example of that would be introducing outdoor clothing. Consumers can float in virtual space simulated as rugged terrain and get a feel for that hunting jacket's special features. Simultaneously marketers could provide shoppers with the opportunity to play a virtual hunting game. 

As usual, Mark Zuckerberg is onto something huge and what will be, as Reed Smith confirms, a disruption. Where this will lead perhaps not even Zuckerberg knows.

Meanwhile, law firms' ESG practices such as that launched by Paul Weiss are addressing the shifts in social values set in play by ESG. Likely they will have to expand that focus to include the implications of the metaverse. Corporation might not know what hit them.

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Books & Comebacks - Should David Boies Try That, Like Katie Couric, Huma Abedin?

Today on "Today" former television personality Katie Couric had been a busy bee.

She dished the dirt on her former co-host Matt Lauer. That's one of the ways she is trying to promote her book "Going There." And also she is trying, of course, for a comeback. Obviously she wants career runway. She is only in her 60s. Clint Eastwood is in his 90s and still very much out there. His most recent production has been "Cry Macho."

Also, struggling to find a place for herself again in attention game is former Hillary Clinton aide Huma Abedin. Yes, she too is leveraging a book - "Both/And" to circle back into the spotlight. It will be excerpted in Vogue.

Exposure, though, is simply that: exposure. It doesn't necessarily convert into rebranding and a sustainable comeback.

See, even if the books sell briskly, those two may not achieve their real obective: regaining relevance in a world of sharp elbows for having, holding, and growing star power.

The twinkle twinkle little star game is brutal. In fact, a compassionate observer might do a Greek Chorus like chant: Let us not praise famous men - and women.

There is also that possibility that the books might not sell well. Those dismal numbers on Amazon could create a dark corridor of shame.

Take Bob Dilenschneider's "Decisions."

This morning it ranks in Amazon hell: 1,002,216. That public affair representative had had as a client Roger Ailes. The relationship bit Dilenschneider in the brand. That was when the Ailes' career went into a tailspin through allegations of sexual misconduct. Dilenschneider seemed to go the book route for regaining star power. I don't discern any twinkles.

So, it's a gamble - and a high-profile one - for former powerhouses in the branding box to bet on a book. There is not only the investment of time. There is also the risk of being Nowhere on Amazon.

But, once celebrity in litigation David Boies might try it. A mind is a terrible thing to waste. His is brilliant. Call him the Tom Brady of legal strategy and running that across the field of law.

Here's the current danger: Boies could encounter lots more bad press if he is actually called to testify at "US v Elizabeth Holmes." He had not only been on the board of startup Theranos. He also had been its legal counsel. Incidentally, in his book "Guilt by Accusation," Alan Dershowitz (who could also go in pursuit of a comeback) labeled that dual role a conflict of interest.

In the Holmes trial, the defense by Williams & Connolly is searching for others to blame for the unraveling of Theranos. It makes sense to target Boies. Therefore, he could really use a book, right.

Are there alternates to books for comebacks? Sure.

But currently the memoir is the way to go.

Former Donald Trump lawyer Michael Cohen looks like he hit a homerun with "Disloyal." The public values what he shares, both about the Trump ethos and his own tragic flaws. He admits he was swept up in the chaos, action, and proximity to power of assisting Trump. Father Forgive Me, I Have Sinned. The memoir ranks 9,895 on Amazon.

The Cohen star could wind up twinkling brighter than before.

The model for that had been the comeback of fianncial player who also had gone to prison: Michael Milkin. Prison can be a platform for reimagining a career. 

And, what about a book by professionals whose stars keep ascending? Actually, publishing a book might be expected.

For instance, Paul Weiss Chairperson Brad Karp has expanded his huge brand to include "visionary." 

As I document in this Law and More article, Karp anticipated the perfect storm corporations would be entering because of ESG (Environmental Social Governance). Paul Weiss was the first to customize an ESG practice. That was way back in April 2020.

More recently, Karp had predicted that not only corporations but also the law firms themselves would be pulled into that force field. That has been the reality of Mayer Brown's crisis in China.

Law firms have begun to embody that phenomenon articulated in the W.B. Yeats' poem "Among School Children":

"How can we know the dancer from the dance?" 

The answer is: No longer can we. And all the constituencies looped into the U.S. legal system have to understand the implications of that. That could be a development Karp might sort out for both law firms and the public interest. What should society expect from its law firms?

Books remain a powerful medium. That is why Cohen arose before dawn to pen in his prison cell "Disloyal" before other inmates awakened. He knew exactly what he was doing.

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Big Law - Some Rashomon Moments

From the time of Jeremy Blackman's satiric blog "Anonymous Lawyer" to current best-seller "The Caesars Palace Coup" Big Law has been vilified. That's the way it has been.

The partners are depicted as feudal lords.

Law firms defending the likes of Harvey Weinstein become fodder in media such as The New Yorker. 

The up and out system which results in only about one out of 10 associates making it to partner is interpreted as a destroyer of souls. There is no type of Greek Chorus chanting: Hey, you knew the deal when you looped in. 

Netflix is having a 10-part series derived from the novel "Partner Track." Negative, of course. 

And media sites such as RollonFriday and Abovethelaw which accept insider leaking from law firms are on side of the angels.

But that dark lens for viewing large law firms is only one. And Big Law isn't doing such as hot job pushing back on it through pro bono assignments, social justice outreach, and public-interest op-eds in The New York Times and The National Law Journal.

What those firms haven't unleashed is The Rashomon Factor.

As the Japanese film "Rashomon" showcased, there are myriad perspectives for interpreting just about everything. In that movie about a murder and a rape, the takeaway is how differently a number of people experienced it.

More recently, the film about flawed justice  in the 14th century "The Last Duel" also uses the Rashomon style. What is claimed to have happened - a rape - and the background events are configured into a variety of scenes of the same events. The story, incidentally, is true. 

Big Law has the resources to conjure up its own engaging Rashomon moments.

Do a 24/7 TikTok video of what goes on in law firms. Sure, block the confidential. And let the world decide if that's so bad. Viewers could be enchanted by the analogue of Tom Brady-type strategic planning and actual plays.

Follow a summer from the law office, back to law school, and back to the law office. Pan in on the struggles. Public opinion can assess the values of that world. The interesting part could be the shaping of a legal mind and resistance. Are humans wired not to think like lawyers? Add on a public interest tutorial on how do just that: Think like a lawyer.

Humor also is back in marketing communications. It's always been a power tool in messaging. Some will recall how presidential candidate Ronald Reagan blew up the age issue with a quip about Walter Mondale's "youth and inexperience." Here is a clip of that game-changer in the campaign.

Perfect would be an action-figure comic book. Let the world become engaged in how a chairperson like Larry Sonsini at Wilson Sonsini protects startups or Brad Karp at Paul Weiss mobilizes thousands of lawyers from law firms throughout America to work free on behalf of the victims of COVID. It's not only a prosecutor such as Jack McCoy from "Law & Order" who fights the good fight. 

And, yes, contract with designers (hopefully on a pro bono basis) to create video games about the weapons defense lawyers carry into combat. Empower players to make genius moves. Selling those games can provide funding for scholarships to law school for diverse students. 

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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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WeWork Founder Adam Neumann Contracted with Brandname Defamation Lawyer Tom Clare

"Tom Clare was recently hired by Neumann to combat suggestions that Neumann engaged in criminal activity during his rollercoaster stint at the co-working giant [WeWork] ... He convinced HBO Max to revise its description of Neumann in an episode of the forthcoming series 'Generation Hustle,' Clare and an HBO Max representative told Bloomberg Law." - Chris Opfer, Bloomberg Law, October 13, 2021.

Clare is a brandname in the defamation space. Among his other clients is Dominion Voting Systems which is suing alleged sources of defamation ranging from Fox to MyPillow founder Mike Lindell.

Since WeWork is giving it another run at an IPO this month, Neumann has become high-profile again. For about 18 months he had been laying low. But, now he's back. And part of the back is the publication of a negative book about him published in July 2021. That's "The Cult of We" by Eliot Brown and Maureen Farrell. On Amazon it ranks high: 8,459.

Allegedly it was Neumann's decisions and behavior which made the original plan for the IPO go kaput. At JPMorgan Chase Jamie Dimon advised him to drop that idea for that present time. Now that it's a go again, if it succeeds in its $9 billion evaluation, Neumann could make big money. That is estimated at about $245 million. 

However, the Neumann brand remains in play. Clare can address the legalities of that. However, more would have to be done on a sustained basis in media relations. 

Like Elizabeth Holmes at Theranos, Neumann had a vision of changing the world. That would be through how his co-working concept would disrupt how people work. 

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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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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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Facebook Outage and More: In Addition to Twitter's Jack Dorsey, Is Leadership at FTC Smirking?

"Twitter CEO Jack Dorsey appears to be getting just as much schadenfreude out of today’s global Facebook outage as anyone. The microblogging chief is tweeting through Facebook’s DNS issues by dunking on the company amid its latest round of scrutiny from The Wall Street Journal, 60 Minutes, and lawmakers." - The Verge, October 4, 2021.

Along with being down itself, so is Facebook's stock price. Before the outage but after being hammered in the media, the stock opened this morning at 335.75. Now, it's at 324.52. That's a long way from its 52-week high of 384.35. More plunges could be ahead this week. 

Also, in a downward trajectory is its ability to fight the good fight in, among others, the lawsuit refiled against it by the Federal Trade Commission. A judge tossed the first version because of a lack of specificity. This time, with antitrust zealot Lina Kahn as chairman, the refiling was full of specifics. 

But more important than that is the confluence of forces, especially those created by busy-bee document-collector Frances Haugen. It is souring public opinion against Facebook. The tipping point, as in the state attorneys general lawsuit against BigTobacco, could be that Facebook was proposing to target children for their products and services. Yet reseach shows that the influence of Facebook can be hazardous to children. 

The leadership at FTC might feel now as in-control as Tom Brady had after winning last night against The Patriots. Also they might be smirking.

The power of Facebook is certainly in play.

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Apollo Global Management Continues Repositioning Post-Scandals: Reward/Risk of ESG Pivot

f"Father, Forgive me, I had underestimated the resilience of Apollo Global Management"

"Stop being a guilt-ridden Catholic. The reputation restoration is not a done deal. Your dark thoughts could be on the money, my child."

"Apollo Global Management Inc. named Dave Stangis as its first chief sustainability officer, a new position for the $472 billion alternative-asset manager." - Melissa Karsh, Financial Post, October 4, 2021.  

Apollo may have had made yet one more giant step toward reputation restoration. Not too long along it had been embedded in the deep circles of scandal hell. But, the jury is still out on the sustainability part. The story on that is complex and keeps changing. 

Apollo's founder Leon Black had been sucked into the force field of being associated with convicted pedophile Jeffrey Epstein.

Despite getting off the hook on criminal charges, Black couldn't shake that. After all, this is America, founded by the rigid punitive Puritans. Shame is the standardized ethos. That emotional set is even expected in the courtroom.

Black stepped down from the leadership and Marc Rowan took charge. More recently, there had been the headline-grabbing lawsuit against Black by a former mistress. That didn't help the Apollo brand.

In addition, the nasty expose "The Caesars Palace Coup" by Sujeet Indap and Max Frumes heaps on Apollo all the negative cliches about the greed and sharp elbows on Wall Street. The book focuses on the bankruptcy of Vegas entertainment icon Caesars. The shade thrown by the book - it ranks 11,338 on Amazon - still hasn't gone away. But, its allure seems mostly to be the titillation of gossip. No one expects Congress to set up a subcommittee to investigate Apollo after that.

With Rowan as chief executive officer Apollo has shifted to being a credit powerhouse. That was cemeted when it acquired the rest of Athene it hadn't owned.

Now, it pivots to the side of the angels and where 33% of assets in the investment world are: ESG - that is, Enviromental Social and Governance. 

Investopedia defines "ESG" as:

"Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights."

In appointing Stangis as Chief Sustainability Officer, Apollo gets into the ESG game in a major way. Part of Stangis' role is to integrate ESG principles across all of Apollo's businesses. Sounds great, right. Also, it can be interpreted as in the public interest. Green is good. Previously Stangis had headed ESG initiatives at Campbell and Intel. 

However, there is risk, as there is in all strategies. As many know, essentially ESG investing has been the wild west, with little accountability or regulation. The joke is that if you want to set up an ESG investment just say that it is an ESG investment and that will be that. There isn't even a standard definition of what is an "ESG Investment."

The first sign of the taming of that wild west are the investigations in the U.S. and in Germany of Deutsche Bank's DWS. The data it has used to assess and report on ESG investments has been called into question. 

The Wall Street Journal reported:

"DWS’ ESG data was sourced from outside providers, and then the numbers were averaged together, documents show ... that was a problem, because if one firm awarded a company an A and another gave it an F, the result was 'right in the middle, everything looks OK.'"

Here is Law and More's analysis of the implications of DWS' problems.

The financial and the branding realities are that financial institutions betting a significant piece of the ranch on ESG could find themselves in trouble in a number of ways. The asset class could sour. Those firms could be accused of greenwashing as has Exxon with its algae initiative. 

Also, the aura surrounding ESG investing is often just that: a happy-clappy glow. When the rubber meets the road on actual investing decisions, the deciders usually approach that as a hard-nosed financial transaction.

There is research creating exactly that kind of lens for sizing up the ESG investing craze. That research has been by experts at Morningstar Steve Wendel and Samantha Lamas, reports MarketWatch. And the focus is on actual investor behavior, not macro warm-and-fuzzy. 

The Morningstar findings indicate that ESG criteria represent only one factor in choices about investing. The process is complex. It becomes even more complex in that scary matter of growing funds for retirement. Among what's considered are the usual concerns. Those range from tax efficiency to how much the investors trust their financial advisor. 

So, where is Apollo in reputation restoration? Obviously, it's doing well. Its financial performance crushed in the last quarter. Black has managed to recede from the headlines. Rowan is respected. And this embrace of ESG can give it new runway in its journey to move away from the past. 

On the other hand, ESG can pile on Apollo new kinds of problems. Most recently, once sustainability darling in financial circles and in the media - Allbirds - seems to have overplayed its hand. In lawsuit "Patricia Dwyer, et al. v Allbirds" its sustainability-centric advertising is being challenged. Here is a copy of the complaint. And here is Law and More's analysis of the pickle Allbirds now finds itself. 

Green is evolving into a wobbly platform for the bottom line, branding, and reputation restoration.

Apollo has taken on new risk in its ESG commitment. 

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