Why ESG Matters?

Regulatory Ramblings

Episode 43 with guest Jon Solorzano, Vinson & Elkins
Jon Solorzano is a Los Angeles-based attorney who serves as counsel and co-head of the environmental, social, and governance (ESG) task force at the law firm of Vinson & Elkins. Prior to this role, he served as senior director for legal and corporate development at the Clorox Company.
Beyond ESG, Jon is also a highly sought-after thought leader with significant expertise in related fields such as M&A, corporate governance, securities regulation, corporate and business development, consumer products, technology, human capital management, business financial strategy, and international matters for both high-growth start-ups and established Fortune 500 companies.
Few topics are as vexatious and polarizing in contemporary times as the acronym ESG. Legendary investors such as Warren Buffet and his second-in-command, the late Charlie Munger, along with other prominent corporate and finance figures, argue that ESG should not be a consideration in investment decisions.
Against this backdrop, Jon discusses with Regulatory Ramblings host Ajay Shamdasani why ESG matters to investors, companies, and society, alongside corporate social responsibility (CSR) and diversity, equity, and inclusion (DEI). He stresses that while these concepts and movements are related and overlap to some degree, they are not necessarily the same thing. Indeed, Jon notes that those who coined the term ESG might have garnered more support for their cause had they emphasized (G)overnance rather than (E)nvironmental, as even skeptics of global warming can appreciate the importance of well-governed companies and how that affects share prices.
Jon also shares insights into his upbringing, background, and path into the legal profession, as well as how, as a transactional lawyer, he ended up leading his firm’s ESG practice.
While acknowledging the concerns of ESG detractors and naysayers, Jon predicts that 10-15 years from now, the nature of the debate and discussion will be very different. By then, few will even question the importance of ESG to the world’s well-being, he says, as millennials and Zoomers take over the reins of society in developed countries.
A telling sign that Jon's predictions are accurate is that for younger investors, ESG definitely matters as a yardstick in gauging what constitutes a socially conscious and sustainable investment.
The conversation concludes by examining the extent to which ESG mandates intersect with financial regulation, and why banking and financial institutions globally need to take ESG as seriously as their regulatory compliance and risk management requirements.
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Chapters

1. Why ESG Matters? (00:00:00)

2. A Journey through Corporate Law and Stakeholder Engagement (00:02:01)

3. Unveiling the Complexity: ESG vs. CSR in Corporate Responsibility and Investor Value (00:08:05)

4. Exploring the ESG Backlash: Understanding Perspectives on Investor Value and Corporate Responsibility (00:20:20)

5. Corporate Indifference: The Evolution of ESG Amidst Regulatory Pressures (00:25:01)

6. ESG in a World of Socio-Economic Uncertainty and Geopolitical Tumult (00:32:59)

7. How do you rebrand ESG: Adapting Perception and Purpose in Corporate Sustainability (00:36:28)

8. Insights into the Intersection of ESG and Financial Regulation (00:41:26)

9. Generation Shift: The Future Landscape of ESG (00:44:22)

10. The Evolving Role of Professionals in ESG Decision-Making (00:48:31)

11. Solorzano: Assessing a Practitioner's Journey in the evolving ESG Landscape (00:52:41)