Corporate Officers Could Face Hot Water For Conservation Claims

Lawsuits over water conservation are rare, but concern is growing over whether new statements from corporate CEOs about "net water positivity," or replenishing more water than is being used, may lead to new types of derivative actions against directors and officers, say Wilson Elser partners Jonathan Meer and Carl Pernicone.

There is a growing trend toward investments driven by non-financial factors, notably environmental, social and governance (ESG) concerns. That, in turn, is leading to increased activism i by shareholders.

As a result, corporations are announcing certain pledges to address shareholders' environmental concerns, such as water conservation and improving water quality. The CEOs of 3M and Pepsi made such statements in August 2021, which were followed by similar pledges from Facebook (now Meta Platforms Inc.) and Google. Companies such as Microsoft and IKEA have made like statements in years past as well.