Mar 2023

ESG in 2023: A Fragmenting Landscape

It is a dynamic time for ESG globally, especially in the United States. 

At the macro level, various developments are challenging the customary ESG narrative. That narrative has been one of ever-increasing ESG commitments by the business community. This ambition has included embedding and operationalizing environmental, social, and governance considerations in corporate strategies, making net zero commitments, and speaking out against injustices or threats to democratic governance. In the meantime, companies must continue to be profitable enterprises and generate returns for shareholders.

The narrative, simply put, could be described as “win-win,” as “having your cake and eating it too,” when it comes to profitability and conducting your business responsibly. 

That narrative has shifted dramatically over the last year, driven in part by the energy crisis and the war in Ukraine. Macroeconomic developments have made ESG seem more expensive to pursue, and the political environment (especially in the United States) seemingly has subsumed the broader ESG conversation. This past year saw calls for the end of ESG, highlighting flaws in certain ratings methodologies or suggesting disbanding ESG terminology. One notable executive referred to ESG as “satanic.”

On the other hand, an array of data suggests that realities underlying the ESG narrative – climate change and biodiversity loss, racial injustice, and the corrosive effects of poor governance – have never been more dire. Talk of the “future of ESG” can seem to be little more than a sideshow. The recent impacts of climate change are unmistakable, including horrific floods in Pakistan, massive droughts and forest fires in the western U.S., and deadly heat waves in Europe. These challenges have kept the focus on climate and broader “E” issues, as witnessed in the recent COP27 meetings in Egypt, and COP15, the UN’s biodiversity summit, in Canada.

The Inflation Reduction Act, the most significant climate legislation in U.S. history – notwithstanding the misnomer – is expected to transform the decarbonization of the U.S. economy and the transition to clean energy. It includes significant tax incentives for electric vehicles and related infrastructure, resources to help citizens decarbonize their homes and places of work, and the creation of a “green bank” to help draw in private capital into climate friendly investments. This development stands in stark contrast to much of the “anti-ESG” pushback we’ve seen. 

In addition, the U.S. midterm elections played out differently from what many expected and will seemingly allow the Biden Administration to continue advancing its green agenda. It also may serve to limit how far Republicans can advance certain congressional initiatives, including opening investigations into the ESG commitments and practices of asset managers, corporates, and financial institutions. 

Some corporate CEOs have perhaps lowered their voices when it comes to ESG-related pronouncements, or even called for ESG terminology to go away. Nevertheless, ESG, climate change, and biodiversity are all clearly still top-of-mind in boardrooms, shareholder meetings, and private conversations of executives. This is evidenced further by their primacy in the World Economic Forum’s annual report of issues of concern for the business community.

Peering into 2023, an overarching question is whether the world of ESG and responsible business is shifting away from “win-win” such that businesses may have to choose between profitability and working to advance progress on major societal challenges.

The chapters that follow provide an oblique answer to this larger question. While abstract debates occupy headlines, the development of law and regulation when it comes to ESG continues at a rapid pace across the globe. 

These legal and regulatory developments are the main subject of this book. Relevant laws and regulations will continue to shape business behavior – including strategy, governance and compliance, reporting and disclosure, external engagements and marketing – even after the trends of 2023 give way to those of 2024. The transition of “ESG” from the realm of voluntary frameworks and “soft law” to one of “hard law with teeth” is real and, ultimately, likely to be among the most enduring trends of recent years. 

That transition is plotted out in detail in this publication, focused rigorously on legal and regulatory developments that businesses and those who advise them need to be aware of, as well as nonlegal drivers that also shape the business environment. We hope these chapters will add value as you navigate the pitfalls and opportunities that ESG generates for your organization. 

We would like to extend our thanks to all the law firms that contributed so much to making this book what it is. Thank you also to the many Debevoise partners and associates who supported this project and contributed to its success. Our team at Debevoise includes lawyers with deep experience across the range of critical ESG issues, which proved essential to this project. In addition, without Gavin Collins and associates Toby Wenham Rogers, Miles Aho, Lisa Sheldrick, Maria Epishkina, Gavin Benson, and, in particular, Sophie Michalski, the pages you are about to peruse simply would not exist. Thank you, team!

We hope this is a useful resource to you and, as always, welcome your feedback on how we might make it even better. 

Ulysses Smith
Debevoise & Plimpton LLP

Contributing Firm




Guillermo Jorge
Pablo Crimer


Vanessa M. R. Hall


Carolina Queiroga Nogueira
Thiago José da Silva


Juan Antonio Parodi
Raúl Álvarez
Verónica Cuadra


Gary Gao

European Union

Patricia Volhard
Geoffrey Burgess
Jin-Hyuk Jang


Anniina Järvinen
Annika Schauman
Johanna Vanninen
Laura Sainio
Tero Pikkarainen


Christina Heil
Jin-Hyuk Jang
Patricia Volhard


Fabio Gallo Perozzi
Federico Longo
Giuseppe Taffari
Roberto Randazzo


Yasuyuki Kuribayashi
Yuko Toyoda


Diego Sierra
Edmond Frederic Grieger
Elias Jalife
Luis Burgueño
Pablo Jiménez


Davine Roessingh
Dennis Horeman
Jasper van Uden


Claudio Ferrero Merino
Francisco Tong
Tomás Denegri Vargas
Ursula Zavala

South Korea

Curie Lee
Eugenia Stavropoulou
Hye Sung Kim
Sae Youn Kim


Emma Greiff
Jenny Lundberg
Joel Montin
Rezan Akkurt


Dr. Martin Eckert
Lars A. Fischer
Stephan F. Greber

United Kingdom

Jannis Bille
Rebecca Perlman
Sebastian Morton
Silke Goldberg

United States

Andrew M. Levine
Caroline N. Swett
Ulysses Smith

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