Tag: DEI policies

Is ESG backlash triggering a change in policies or just a change in terminology?

As discussed in this article from the WSJ, The Latest Dirty Word in Corporate America: ESG, ESG backlash is driving many company executives to drop any reference to “ESG” and instead use terms like “sustainability” or “responsible business,”  or opt for “green hushing” altogether. Citing an analysis from FactSet, the WSJ reported that, on “earnings calls, mentions of ESG rose steadily until 2021 and have declined since…. In the fourth quarter of 2021, 155 companies in the S&P 500 mentioned ESG initiatives; by the second quarter of 2023, that had fallen to 61 mentions.” But are companies just turning down the volume while still pursuing the same aspirations or have they trimmed their objectives too?

Starbucks decision to adopt DEI initiative within Board’s business judgment

In August last year, the National Center for Public Policy Research filed a complaint against Starbucks and its officers and directors, National Center for Public Policy Research v. Schultz, alleging that they caused Starbucks to adopt a group of policies that discriminate based on race in violation of a “wide array of state and federal civil rights laws.” Starbucks characterized the policies as designed to “realize its ‘commitment to Inclusion, Diversity, and Equity[.]’”  Starbucks, its officers and directors moved to dismiss, and a hearing on the motion was held on August 11, 2023. At the hearing, the Federal District Court for the Eastern District of Washington granted the motion to dismiss with prejudice and closed the case.   A month on, the Court’s Order has now been released. While the Order discusses the various legal bases for the dismissal, the Court’s sentiment was perhaps best summed up by its statement in the Order that “[t]his Complaint has no business being before this Court and resembles nothing more than a political platform.” Much like the recent decision of the Delaware Chancery Court in Simeone v. The Walt Disney Company, the Court concluded that “[c]ourts of law have no business involving themselves with reasonable and legal decisions made by the board of directors of public corporations.”  Are we starting to see a trend with regard to board business decisions about corporate social policy? 

Cooley Alert: Will SCOTUS’ affirmative action decision affect your company’s DEI policies?

Many questions have been raised about the direct and indirect impact of the SCOTUS decision in in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (decided with Students for Fair Admissions, Inc. v. University of North Carolina, et al.), that using race as a factor in college admissions violates the Equal Protection Clause of the Constitution. This excellent Cooley Alert, Supreme Court’s Affirmative Action in Education Ruling Leaves Employment Diversity Initiatives Untouched—for Now, from members of Cooley’s Employment Group, provides many of the answers.