Law is a reflection of society, and corporate law is no exception.  As we wrestle with broader questions around social justice, (very real) environmental risks, and the proper balancing of our long term societal goals, the proverbial corporate pendulum continues swinging away from the shareholder primacy model and towards a more holistic approach of the role of the corporation in society.  In this context, so called ESG issues – an acronym for environmental, social, and governance – have taken center stage in the corporate debate.  Although still amorphous and evolving, the term ESG now generally stands for the proposition that there are certain factors measuring the long term sustainability and ethical impact of a company that should be considered by the markets in addition to the more traditional metrics centered on short term economic value creation for the direct equity owners of the enterprise.

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This article originally appeared in The CLS Blue Sky Blog - Columbia Law School's Blog on Corporations and The Capital Markets. Eduardo Gallardo is on the advisory board and a regular contributor.