Rise in Lawsuits Highlights Range of Exposures Financial Sector Faces

 Monday, July 19, 2021

 Business Insurance

Litigation on a range of environmental, social and governance issues, such as climate change, pollution, diversity and CEO pay, is on the rise, putting pressure on companies to proactively manage ESG risks.

ESG-related factors are increasingly sources of regulatory change and liability, said Anton Lavrenko, regional head of financial institutions, North America, at Allianz Global Corporate & Specialty SE, part of Allianz SE, in New York.

Heightened concerns over ESG issues could increase potential directors and officers, errors and omissions, and employment practices liability exposures, he said.

In the U.S., recent developments such as growing scrutiny of ESG corporate disclosures by the Securities and Exchange Commission, a 2020 California law requiring publicly-held companies to diversify their boards, and a Nasdaq Stock Market proposal to mandate board diversity, signal a shift toward a compulsory compliance regime, Mr. Lavrenko said.
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