9 min read
2024 has seen a surge in litigation and regulation of environmental, social, and governance (ESG) matters. Following COP29, there will be a renewed focus on climate compliance and sustainable practices, presenting further challenges for companies but also opportunities for those ready to take decisive action.
Using the Datamaran platform, we uncovered the most litigated and regulated ESG areas of 2024 (to date) and have shared the top nine in this article. We’ve also listed the relevant landmark and notable legal cases with strategic insights to help guide corporate decision-making on each topic.
Topic #1: Climate Change Risk & Management
Regulatory Data: 2,405 active regulations globally on the topic
Notable Legal Cases:
Key Insights: Climate change risk continues to dominate as the most legally contested and regulated ESG issue. Businesses are urged to integrate comprehensive climate strategies, proactively align with evolving climate policies, and maintain agility to adapt to post-COP29 updates. COP29 reinforced the urgency of aligning climate strategies with international standards, particularly proactive compliance to meet increasingly stringent requirements. Failure to comply can lead to severe legal and reputational repercussions, exemplified by the landmark case involving the European Court of Human Rights vs. Switzerland, now being cited in a case at Poland’s Supreme Court.
The following graph taken from the Datamaran platform demonstrates how the number of companies disclosing their "Climate Transition Plans" has increased substantially over the last three years, reflecting a heightened focus on managing climate risks:
Topic #2: Marketing & Selling Practices
Regulatory Data: 596 active regulations globally
Notable Legal Cases:
Key Insights: The crackdown on greenwashing is intensifying. COP29 discussions underscored the critical need for transparency in environmental claims, with a renewed focus on mitigating greenwashing risks as a priority for regulators globally. Between March 2023 and June 2024, the Australian Securities and Investments Commission (ASIC) made 47 regulatory interventions, which included two Federal Court cases and fines exceeding $123,000. Companies must ensure that their environmental claims are accurate and transparent to avoid lawsuits and prevent the erosion of customer trust.
Topic #3: Air Emissions
Regulatory Data: 948 active regulations globally
Notable Legal Cases:
Key Insights: With increasing emphasis on air quality, there have been a growing number of legal cases and regulations on this topic, especially in the US. Businesses must invest in technologies that reduce emissions and comply with tightening standards. Proactive adherence not only minimizes the risk of costly legal battles but also supports operational continuity amid stricter environmental policies.
Topic #4: Hazardous Waste Management
Regulatory Data: 729 active regulations globally
Notable Legal Cases:
Key Insights: Hazardous waste management remains a pivotal focus of environmental regulation. Companies must develop robust waste management protocols to prevent violations that can lead to extensive environmental harm and legal liabilities. The lawsuit against Brazilian companies for the Mariana Dam collapse is among the largest class action cases.
Topic #5: Human Rights
Regulatory Data: 1,561 active regulations globally
Notable Legal Cases:
Key Insights: The extensive regulation of this topic reflects its importance. Post-COP29, businesses are advised to prioritize supply chain transparency and ethical practices to mitigate reputational and legal risks. Growing enforcement actions targeting companies neglecting human rights in operations or supply chains are expected, as reflected in the landmark case in Italy involving the fashion sector.
Topic #6: Labor Rights
Regulatory Data: 1,173 active regulations globally
Notable Legal Cases:
Key Insights: Labor rights are another highly regulated area. Ensure fair labor practices, comply with laws across geographies, and foster positive working environments to avoid legal problems and reputational risks.
Topic #7: Managing Land Use & Reducing Deforestation
Regulatory Data: 941 active regulations globally
Notable Legal Cases:
Key Insights: COP29 reinforced the importance of sustainable land management as a critical component of ESG compliance. This is especially true for those in sectors like agriculture, forestry, and real estate. Companies are under increasing pressure from regulators and society to adopt practices that mitigate deforestation and its impacts and align with sustainability standards. This is illustrated by five companies agreeing to settlements totaling over $7.2 million earlier this year to resolve natural resource damages claims at the Duck & Otter Creeks Natural Resource Damage Assessment site in Ohio.
Topic #8: Fair & Inclusive Workplace
Regulatory Data: 964 active regulations globally
Notable Legal Cases:
Key Insights: Regulatory bodies continue to advocate for diversity, equity, and inclusion (DEI) in the workplace. Companies must build and maintain DEI policies to not only meet legal standards but also enhance their company's reputation so they can attract and retain top talent.
Topic #9: Spills
Regulatory Data: 261 active regulations globally
Notable Legal Cases:
Key Insights: Although less regulated than the other topics listed here, spills-related incidents carry significant legal risks when they occur. COP29 discussions highlighted how high-impact spills could attract amplified regulatory focus and stakeholder scrutiny moving forward. Businesses should implement comprehensive spill prevention and response plans to manage potential liabilities effectively.
Key Takeaways for Business Leaders
The data highlights the importance of continuous ESG monitoring and governance to adapt to sustainability challenges. As COP29 amplifies the global ESG agenda, businesses must act decisively to align their practices with the evolving regulatory environment. For those prepared to respond proactively, there is an opportunity to strengthen compliance, mitigate risks, and secure a competitive advantage in a rapidly changing market.
Using Datamaran’s platform, companies can track regulatory changes and benchmark against peers across 100 ESG topics. For instance, the following graph illustrates how regulatory risks surrounding the transition to renewables and alternative energies have surged over recent years, demonstrating the need for proactive compliance strategies:
Business leaders must stay alert to changing dynamics, as the implications for compliance, financial risk, and reputation can be substantial. Regular updates to ESG practices and a thorough tech-enabled double materiality analysis can help in-house sustainability teams identify gaps and potential risks, and ensure ongoing compliance.
As we approach 2025, these insights lay a solid foundation for aligning company strategies with regulatory expectations and mitigating the risk of ESG-related legal disputes and compliance issues. To view an infographic on the ESG topics in dispute in 2024 please click here.
To learn more about the Datamaran Smart ESG software, visit our Product page or request a demo to see the platform in action.
2 min read
5 min read
4 min read
3 min read
