Law 360 Quotes Andrew Freedman on ESG and Shareholder Activism Trends in 2022

Olshan Partner and Co-Chair of the firm’s Shareholder Activism practice Andrew Freedman was recently quoted in Law360 (subscription required) on the role shareholder activism will play in 2022. In discussing how other activist investors may look under the ESG umbrella to find new ways to bolster their campaigns, Andy noted that ESG principles are, “the next frontier of the intersection of value creation and inefficiencies… Activists have not historically considered the social and cultural side of a company, or its environmental issues or blind spots, to be particularly relevant to what makes a business more valuable.” Andy believes that, “[I]n the wake of the pandemic, the social justice issues that came out of the pandemic, and a keen focus on climate and the environment, that activists will creatively find the ways that the ‘E’ and the ‘S’ of the ‘ESG’ construct weaves into their value creation thesis.” When discussing how public companies will continue to impede activists’ efforts, Andy stated, “What was kind of at the forefront of the 2021 proxy season were companies that, rather than try to battle with activist investors on the merits, have really gone scorched-earth in their entrenchment approach to proxy fights. In the wake of CytoDyn’s battle with a stockholder group last year, more companies may try to push back against activists on their nomination notices.” Andy also anticipates seeing more of what he calls, “vote-buying defensive financings… The brazenness of public companies on the advice of defense counsel is at an all-time high, and it’ll continue until it blows up in their face, which I think is bound to happen in 2022.”