Canada: Complaints over workplace safety & inequity give rise to "social" ESG lawsuits against companies
"The 'social' in ESG is in the spotlight for litigation risk", 23 Sep 2021
...In 2020 and beyond, social issues including workplace safety and social inequity are coming to the fore, says Renee Reichelt, a partner in Blake, Cassels & Graydon LLP in Calgary. She says that climate change will continue as an issue, but social issues will become stronger and present potential for litigation risk...
...Companies may be vulnerable when they have made commitments to diversity on their boards of directors or in hiring, but have not met those commitments, says John Terry, a partner and civil litigator at Torys LLP in Toronto.
“A lot of those [claims] focus on representations that are being made,” he says, “and a failure to comply with that representation. If [that] leads to some sort of movement in the share price or reputational damage, there are litigation risks that arise from that as well.”
The social aspect of ESG can include workplace safety conditions, human rights infringements, diversity and inclusion, consumer protection, and modern-day slavery...
...In Canada, Bill S-216, An Act to enact the Modern Slavery Act and amend the Customs Tariff, is before the Senate. Its enactment “would follow trends we see around the world,” says Reichelt, including in Germany, the United Kingdom, Italy and France, by updating legislation against modern slavery. The new law would require annual corporate reporting with an aim to reduce the risk of forced or child labour.
This bill is the third attempt to pass this legislation in Canada, she notes. In 2018 and 2020, bills were tabled but not enacted. “The current form doesn’t introduce mandatory human rights due diligence, which we see in some of the cases in the European countries, but it does intend to implement domestic law [to support] Canada’s international commitments to fight against modern slavery.”...