KEY TAKEAWAYS

• The Chinese government is tightening its regulatory hold on the country’s society and economy.
• This has implications for investors, particularly those who hold American Depository Receipts (ADRs) in Chinese companies.
• The impact of new Chinese government regulations is driving a wave of shareholder class actions against Chinese ADR companies.
• Increased regulations in China also have implications for ESG-motivated investors, with an increase in concerns around human rights and labor issues.
• Securities class actions and norms-based controversies are two very different data sets, but both are showing growth in the number of results associated with increased regulatory action in China.
• As climate change and other ESG factors drive a heightened focus on stewardship practices among investors, this paper identifies an opportunity for new insights to be generated by the examination of differing data sets.