On behalf of investors and investment managers dedicated to ESG principles, the G&E ESG Institute submitted an amicus brief to the U.S. Supreme Court in October of 2020, for consideration in the pending Nestlé USA, Inc. v. Doe I case. Respondents, former child slaves, alleged that Nestlé USA was liable under the Alien Tort Statute (ATS) for incorporating and facilitating child slave labor operations on cocoa farms in West African countries in its cocoa supply chain. Writing in support of Respondents, the ESG Institute argued that ESG investors have a particular interest in ensuring that the ATS be available as a legal mechanism for holding corporations accountable for their ESG transgressions.
The Grant & Eisenhofer ESG Institute further asserted that permitting corporate liability under the ATS would incentivize U.S. companies to adopt and enforce humane and ethical business operations, such as closely monitoring their supply chains, in an effort to eradicate forced and child labor. The G&E ESG Institute believes that doing so will ultimately advance the goals of ESG investing, which continues to grow at an unprecedented rate. The Supreme Court heard oral argument on December 1, 2020.
On June 17, 2021, the Supreme Court held 8-1 that Nestlé could not be liable under the ATS because it did not appear – in that particular instance – that the conduct complained of occurred within the United States, which prior precedent has held to be a component of ATS liability. However, the Court invited Congress to expand ATS liability to conduct beyond the “three historical torts” – violation of safe conducts, infringement of the rights of ambassadors, and piracy – which the ATS was initially designed (225 years ago) to address. In short, the door is not closed for litigants seeking to hold corporations liable under the ATS, but the Nestlé decision narrowed the opening, and Congress might be a more welcoming arena for activists seeking to address corporate abuses committed abroad. Read the Amicus Brief