ESG Investment Risk Mitigation: Supply Chain Review

K&L Gates LLP
Contact

K&L Gates LLP

ESG Investment Risk Mitigation: Supply Chain Review[1]

ESG (environmental, social, governance) investing has experienced relatively new status as a hot-button topic in the general investment community in recent months, and many private fund managers and their investors are beginning to review, and in many cases modify, their investment strategies to incorporate ESG investment principles. The lion’s share of attention has in the past been focused on the risks and rewards associated with environmental investments, but more attention is now being paid to social and governance principles as well.

This development is principally attributable to governments’, nongovernmental organizations’, consumers’ and, ultimately, investors’ increasingly vocal efforts to encourage companies to pro-actively manage their businesses in alignment with ESG principles, including by vetting their suppliers carefully and maintaining supply chains that are free of elements that cause harm to the human health, and social well-being, as well as the environment. Several countries have enacted laws directly intended to pressure companies to both monitor their supply chains and proactively police them, incentivizing companies to utilize suppliers that implement ethical practices in their workforce and operations management and reject suppliers that do not.

The effects of these developments are felt not only at level of the product development, manufacture, and distribution companies, but, increasingly, at the shareholder level as well. As shareholders, investment funds, as well as their managers, must be prepared for potential exposure to reputational fallout, and even civil and criminal liability, resulting from business practices and policies at the portfolio company level that may be considered untenable in the current social climate or may actually violate human rights, environmental labor, and corporate laws already in place.

To address this latent risk, many forward-thinking fund managers are looking at ways of mitigating their funds’ potential exposure to such consequences by (i) implementing supply chain review policies incorporating ESG principles as an element of their acquisition due diligence criteria in order to identify ESG-related risk and assess its potential economic effect; (ii) developing internal ethical supply chain maintenance policies and monitoring portfolio companies’ compliance efforts during the fund’s tenure as a shareholder; and (iii) including robust supply chain ESG review disclosures detailing the results of the fund’s ESG-related risk assessments in the risk factors sections of their fund marketing materials.

This Alert provides a brief overview both of the evolution of the ESG context in which ethical supply chain review is most often discussed within the investment industry and of the expanding legal framework underlying ethical supply chain enforcement efforts around the world, from the perspective of the mid-market investment fund managers who may not be fully aware of these issues and who may benefit from a brief look at the issues relevant to their industry.

Historical Evolution of ESG

The term “ESG” was first coined in 2004 in the United Nations’ (“UN”) landmark study titled “Who Cares Wins,” issued as part of a joint initiative by the UN and major financial institutions. The initiative, and its report, was based on the assumption that ESG principles have economic significance and should be integrated into capital markets. This was in contrast to the existing conventional wisdom, embodied in the SRI (“socially responsible investment”) movement, which focused on negative screens to evaluate investments ethically and morally, but without attempting to determine value based on economic impact. Since the advent of ESG, the terms “ESG” and “SRI” are often used interchangeably in the public discourse.[2]

ESG investment has grown exponentially in the years since the UN study was published: In its 2018 Report on US Sustainable, Responsible and Impact Investing Trends, the US SIF Foundation, a non-profit organization whose mission is to promote SRI investing, notes that, as of the date of publication, SRI assets were valued at over one-fourth of the total assets under management in the United States ($12 trillion of $46.6 trillion). This figure represents a 38 percent increase in the two years since US SIF’s immediately prior report was published in 2016, and an 18-fold increase since US SIF released its very first report in 1995. According to a July 11, 2018 article published in Forbes, The Remarkable Rise of ESG, by Georg Kell, ESG assets under management as of the date of the article were estimated to account for over $20 trillion of professionally managed assets worldwide.

The idea that ESG principles are material to investment valuation has subsequently been fomented, with considerable effect, by an independent, non-profit organization supported by the UN called “The PRI,” an acronym for The PRI’s six founding “Principles for Responsible Investment”[3] developed “by investors, for investors.” PRI launched in April 2006, and, according to its website, currently claims 1,600 members representing $70 trillion globally in assets under management.[4] PRI provides a platform for its members to publish data on their adherence to the six principles and related performance. Other organizations have since sprung up that provide alternative platforms focused on various aspects of ESG activity, including the Global Reporting Initiative, International Integrated Reporting Initiative, and Sustainability Accounting Standard Board, and provide complementary platforms for ESG disclosures. In addition, in the year following The PRI’s establishment, the UN Conference on Trade and Development instituted the Sustainable Stock Exchange, which has influenced forty-six established stock exchanges around the world to promulgate particularized guidance, directed toward their listed companies, relating to ESG reporting. Such new forums for ESG reporting supplement the historical reliance on annual reports, company websites, stock exchange filings and other traditional reporting venues, and provide a platform for comparing ESG data in isolation.

As a consequence of these developments, mandatory and voluntary corporate disclosure has evolved as the principal enforcement tool for ensuring compliance with ethical investment principles, both via government, in the promulgation of laws and regulations requiring corporate disclosures in specified public forums, and via industry organizations, such as the PRI, that have developed to provide companies and investors with guidance in implementing ESG principles and complying with applicable regulations as well as a platform for ESG disclosures. Many companies and investors feel that such transparency, in addition to serving a compliance function, enhances the reputation of the company making the disclosures, and several industry organizations have developed analytical scoring systems that can be used to determine relative values for companies’ ESG performance and risk exposure.[5]

ESG disclosures typically address, at a minimum, a company’s impact on climate change (environmental factor), its diversity and/or human rights record (social factor), and its employee relations and management structure (governance factor), factors felt by many investors to be material to a corporation’s sustainability and long-term economic success. Most disclosures to date have focused on the company’s direct operations and have largely overlooked supply chains, which can be highly complex, often opaque, and difficult and expensive to review. However, with the recent occurrence of several highly publicized supply-chain-related events and resulting litigation naming manufacturers as defendants, and the subsequent passage of human rights and environmental legislation in several countries directly impacting supply chains, companies and their investors are becoming increasingly sensitized to the reputational and legal risks that such developments pose, and the potential resultant deleterious impact they would have on corporate value. A few recent examples of this are as follows:

  • top British supermarket pulled corned beef brands off its shelves after a newspaper found it might contain meat linked to slave labor.
  • The U.S. Customs and Border Protection halted the entry of tuna by a Taiwanese vessel after obtaining information that the crew was using forced labor.
  • The European Union warned Thailand that it would ban all Thai seafood imports if the government failed to eradicate the trafficking of migrant fishers. In 2015, a U.S. marine-services company filed for bankruptcy after a jury awarded $14 million to victims of forced labor, imperiling the $70 million investment of two major public pension funds. In an effort to salvage their investments, the pension funds offered to finance the bankruptcy sale and settlement effort with $20 million in loans.
  • One of Europe’s largest private equity firms faced questions from its institutional investors after a retail company it owns was found to have used a garment factory in Myanmar that employed underage workers. One public investor, a pension fund, reminded the private equity firm that it expected the firm to mitigate ESG risks as outlined in its investment standards.

Such events increase the cost of doing business due to fines, litigation, insurance premiums, and/or the replacement of suppliers. Disruptions also threaten business continuity through contract breaches, product boycotts, supplier loss, and capital flight, all of which may impact corporate value. Accordingly, many companies and their shareholders are adopting the view that early attention to mitigating potential supply chain risk, and implementing robust vetting and monitoring protocols, is one of the many ways that companies can protect themselves from value-eroding ESG-related events and enhance their, and their investors’, long-term financial success.

Supply Chain ESG Risk as an Investment Factor

A February 2017 survey[6] of senior investment professionals at asset-managing and asset-owning institutions suggested that 82 percent of the respondents “use ESG information because it is financially material to investment performance.” According to some studies, institutional investors are, with increasing frequency, insisting that the supply chain risks be not only assessed, but also, pro-actively addressed by the managers of funds in which they invest. For example, a 2015 Ernst & Young survey found that more than 88 percent of the institutional investors surveyed would either reconsider or rule out immediately an investment if an identified risk in the investee’s supply chain is not satisfactorily addressed. (But cf. footnote 4.)

Accordingly, the incorporation of supply chain ESG data as an element of investment due diligence review may be an important factor in attracting the capital of a growing group of environmentally and socially conscious investors. In this regard, while many investors opt, for economic, fiduciary, and various other reasons, not to adopt ESG principles as an element of their investment program,[7] the market trend toward investment in ESG assets is nevertheless significant: Global ESG assets under management increased by 73 percent from $13.3 trillion in 2012 to $22.9 trillion in 2016.[8] According to McKinsey & Company,[9] as of 2017, more than one quarter of assets under management globally have been acquired utilizing acquisition criteria that prominently incorporate ESG data.

There are challenges to implementing successful ESG investment strategies, including supply chain review policies, that deter many investors and managers from considering ESG entirely, from both the investment strategy and risk mitigation perspectives. Many of the challenges that investors and fund managers face in implementing ESG principles are attributable to the fact that ESG principles are still actively evolving, and there currently exists no standard definition. This fluidity makes it difficult to value and compare the upside potential of competing ESG strategies and much more difficult to evaluate the downside risk.[10] In fact, a 2019 study by Natixis found that only 47 percent of the surveyed investors felt that they possessed enough information to make “socially responsible investment decisions.”[11]

There is currently no uniform industry or regulatory definition or standard for determining what activities are subsumed within the ESG umbrella. Lack of a universally recognized, standard definition of the scope of “ESG investment” renders it difficult for investors to accurately evaluate the returns of funds implementing ESG strategies. In this void, fund managers tend to adopt individual definitions incorporating a broad range of activities, especially within the “Social” category of ESG, that vary from manager to manager. ESG as it relates to supply chains, for example, may be an element of some fund managers’ ESG policies, while omitted by others. Some managers who do adopt a supply chain ESG review policy may consider only the degree to which the company has developed sustainable sourcing for its products, whereas others review supply chains for both sustainability and modern slavery risks.

This lack of standardization is a double-edged sword. While it allows corporations, investors, and fund managers to develop proprietary ESG policies that conform to their underlying investment philosophies and objectives, it also makes it difficult for investors to value a given ESG investment strategy and the results it is likely to yield. The resulting ambiguity has given rise to skepticism among some investors regarding fund-produced ESG data due to the potential both for “greenwashing” — claiming to adhere to stated ESG principles without actually following through — and for over-inflation of the underlying data, potentially running afoul of the U.S. Securities and Exchange Commission’s track-record regulations. Funds also receive such disparate ratings from organizations performing ESG investment evaluations that determining which funds are most capably performing ESG investing often depends on which survey an investor reads. For these reasons, fund managers must be diligent in implementing the principles they profess to utilize when adopting a supply chain ESG review policy and in analyzing the strategies adopted by competing funds.

Legal Enforcement Framework

With increasing frequency, countries around the world are adopting new legislative regimes that aim to hold companies accountable for the acts of participants in their supply chains, particularly in the realm of modern workforce slavery. Existing modern slavery laws generally fall into one of the following two categories: “Disclosure-based” laws require a company only to prepare a modern slavery statement detailing what efforts, if any, the company is taking to detect and remove slavery from its supply chains. By contrast, “due diligence” systems require that a company that detects slavery or a risk of slavery in its supply chains actively take steps to eradicate its existence or else face serious consequences, including hefty fines and imprisonment for corporate directors.[12] Although many of the early supply chain transparency regimes were disclosure-based systems that did not include penalties (e.g., California and the United Kingdom), more jurisdictions are promulgating disclosure-based regimes that impose consequences on non-compliant companies (e.g., New South Wales) or, more frequently, due diligence regimes (e.g., France, The Netherlands, and proposed efforts in Germany and Finland).

Violations under either approach entail possible financial risk to fund investors in the form of significant fines imposed on, and eroding the value of, the violating portfolio company, and, perhaps more importantly, reputational risk, if the investor is publicly associated with the violating company. In some jurisdictions, the laws even provide for the incarceration of a company’s directors. Needless to say, faced with the possibility of such risks, it would be worth considering implementing a supply chain review policy that incorporated, at a minimum, a modern slavery law compliance component.

Conclusion

ESG investing presents fund managers with a “damned if you do, damned if you don’t” quandary. Given the difficulty of accurately valuing the potential economic upside and downside of implementing a proactive ESG-based investment strategy, many fund investors may opt to avoid the issue altogether and stick to a more conventional strategy based on less fluid, tried-and-true principles of economic analysis. However, if, at minimum, a supply chain ESG review policy is not implemented as a risk mitigation strategy, fund managers may be tossing the dice with respect to the potential downside risks of supply chain ESG-related events that could substantially damage a portfolio company’s business, and by extension, a fund investor’s portfolio returns and the reputation of the fund manager, not to mention the potential limitation of a manager’s ability to raise capital among increasingly ESG-sensitized investors.

Accordingly, while ESG investing per se may not be appropriate for all fund investment strategies, nevertheless, the potential downside risks associated with supply chain ESG issues in vetting certain investments and monitoring portfolios would seem to warrant serious consideration by nearly all investment managers. It is increasingly important that fund managers be aware of the expanding body of law and policy globally that impacts supply chains and consider whether it would be advisable to adopt internal policies for reviewing and monitoring supply chains for latent environmental, social (human rights), and governance risks. The benefit of reducing exposure to potentially catastrophic supply-chain related liability in the future may well outweigh cost of implementing effective, prophylactic policies early on.


Notes:

[1] Sources and additional information for the data referenced in this Alert can be accessed by clicking on the embedded links in the text.

[2] The term “ESG” tends to have greater currency among asset managers than “SRI,” particularly in the context of investment fund management, but certain organizations, such as the US SIF Foundation cited herein, tends to use the term “SRI” consistent with its founding charter.

[3] Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.

[4] https://www.unpri.org/

[5] See, e.g., Thomson Reuters EIKON, Thomson Reuters ESG Scores (May 2018) and Guido Giese and Zoltan Nagy, How Markets Price ESG, MSCI ESG Research LLC (Nov. 2018).

[6] Amir Amel-Zadeh and George Serafeim, Why and How Invesetors Use ESG Information: Evidence from a Global Survey, published as a draft working paper by the Harvard Business School (Feb. 2017).

[7] For example, the Managed Funds Association (“MFA”), an industry association representing the global alternative investment industry, states on its website that, “MFA cautions against overly prescriptive measures obligating asset managers to include ESG in investment if they do not reflect the preferences of underlying investors such as pensioners and life insurance companies.” Similarly, Preqin Ltd. stated, in a brief comment entitled “Will Hedge Funds Ever Truly Embrace ESG Principles?” published on its website and based on 2018 data, “In the world of hedge funds . . . the topic is far from clear cut, and managers are divided on whether ESG has a place in a sector designed around unconstrained investments.”

[8] Daniel B. Berkowitz et al, ESG, SRI, and impact investing: A primer for decision-making, VANGUARD RESEARCH (Aug. 2018), https://personal.vanguard.com/pdf/ISGESG.pdf.

[9] Sara Bernow et al, From ‘why’ to ‘why not’: Sustainable investing as the new normal, MCKINSEY INSIGHTS (Aug. 14, 2019, 4:31 PM), https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/from-why-to-why-not-sustainable-investing-as-the-new-normal.

[10] See, e.g., Wayne Winegarden, Environmental, Social, and Governance (ESG) Investing: An Evaluation of the Evidence, PACIFIC RESEARCH INSTITUTE (2019), https://www.pacificresearch.org/wp-content/uploads/2019/05/ESG_Funds_F_web.pdf; Eshe Nelson, Sustainable Investing Risks Becoming a Victim of Its Own Success, QUARTZ (Dec. 13, 2018), https://qz.com/1490365/esg-investing-risks-becoming-a-victim-of-its-own-success/.

[11] Rebecca Moore, Lack of Track Records Hinder ESG Investing, PLANSPONSOR (May 23, 2019), https://www.plansponsor.com/lack-track-records-hinder-esg-investing/.

[12] In The Netherlands, for example, a company that repeatedly fails to comply with the Child Labor Due Diligence Law could face criminal charges and substantial fines. This bill, as of the time of this writing, has passed both chambers of the Dutch parliament and is currently awaiting the king’s signature to become law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© K&L Gates LLP | Attorney Advertising

Written by:

K&L Gates LLP
Contact
more
less

K&L Gates LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.