Restructure This! Podcast Ep. 15
ESG & the Working Mom in the Post-Pandemic Economy with Susan E. Lester
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Sheppard Mullin's Restructure THIS! podcast explores the latest trends and controversies in chapter 11 bankruptcy, commercial insolvency and distressed investing. This week, Susan E. Lester, Global ESG Senior Counsel on the Marketing/IP legal team at McDonald's Corporation, joins us to discuss ESG – environmental, social and governance – in the post-pandemic economy, including the factors driving companies to embrace ESG and sustainability and the legal risk associated with ESG messaging.
Susan is also a mother of two and, as such, became a vocal advocate for working parents, particularly mothers, whose struggles came into clear focus during the pandemic. She graciously agreed to share her experience on this critical topic as well.
Guest:
Susan E. Lester
Susan E. Lester graduated magna cum laude of the University of Illinois College of Law in 2012. Prior to joining McDonald's Corporation, Susan worked at Kirkland & Ellis LLP in the IP Litigation group. She was with McDonald's Corporation for nearly seven years when she transitioned to her current role as Global ESG Counsel with their Marketing/IP team. Susan coordinates legal support for business teams carrying out or reporting McDonald's’ various ESG initiatives.
Transcript:
Justin Bernbrock:
On today's installment of Restructure This, we welcome Susan Lester. Susan is global ESG Senior Counsel as part of marketing and IP at the McDonald's Corporation. Susan has had an extensive career in marketing and IP previously in private practice and while at McDonald's. Susan will share her insights on ESG, which of course, stands for Environmental, Social and Governance. And it's no secret that ESG has become a top priority among many US corporations. Susan is also a mother of two and as such became a vocal advocate for working parents, particularly mothers whose struggles came into clear focus during the pandemic. She's agreed to share her experience on this important topic as well. As always, stay tuned after the interview for a quick rundown of current Restructuring news and notable stories.
Well Susan, thank you for joining us, it's great to see you. One thing that I should probably just say right at the outset, is that Susan and I were law school classmates at the University of Illinois. And it's been really remarkable to watch from afar as you've done incredible things thus far in your career and particularly, the important work you're doing now at McDonald's. Of course, our families are friends, our kids play together and so it's really great to see you professionally as well. And I'm very excited to hear about the things you've been doing recently. But before diving into that, how did you get to where you are? What drove you to be a lawyer and particularly focus on the areas in which you focus?
Susan Lester:
Thank you Justin. No, it's great to be here and see it outside of kids' play dates in the professional world like you said. So it's interesting when I think back about my career, I grew up with a dad who's an attorney, but in watching him, I never thought I'd be an attorney myself. I went to undergrad at University of Illinois as well, so go Illini. I actually graduated with a degree in advertising and began working as a media buyer for an agency Starcom. It wasn't until there when I interacted with my clients’ attorneys, that I learned about this completely new, at least to me, area of law known as marketing and IP. It was there that I first saw an area of law that really sparked my interest in a space that I enjoyed working in, advertisers, working with brands, trademarks, and how you protect them.
So from there, I decided I wanted to go to law school. And different than many folks that go to law school, I went in with a very specific focus of knowing I wanted to work one day for a large brand on the marketing IP team and feel incredibly fortunate that I've been able to do that. When an opening became available on the McDonald's marketing and IP team about seven and a half years ago, I knew I had to apply. And again, I was very fortunate to get that position and on the team, started to focus on advertising claims, specifically food nutrition, marketing to kids work, typical IP portfolio work, as well as getting into some federal menu board labeling. And with all of those topics though, I also always touched ESG here or there.
Justin Bernbrock:
I think that a lot of our listeners, situations that they face from a restructuring perspective, what I really want to do though, is try to figure out how and why folks should focus on ESG and really what it means. So let's start at what I'll call the basics. You are a Global ESG Senior Counsel, what is that role? Has it existed for a long time? What’s it mean? Give us a little bit of the basic understanding of what your role is.
Susan Lester:
This role means I help manage and lead McDonald's overall legal team and how we support the business’s ESG priorities and within the company. ESG, as we've all talked about, has evolved so much in this role really came to fruition roughly at the end of last year when a few of us who touched on the topics really saw a need with the increased work going into it of dedicating a position to it.
And because I had always touched the work and feel it connects a lot to advertising claims, what you talk about substantiation, that's where it felt natural and a fit on the marketing and IP team. I also work across collaboratively with a ton of different legal colleagues who touch different matters as well. And we all work together to help support McDonald's business in the ESG initiatives because it touches such a wide variety of topics.
Justin Bernbrock:
And so I think it's probably fair to say that, really in the last two years or so, perhaps last five years, this notion of ESG has become very important for companies' management teams, companies’ boards of directors. In fact, 80% of leading companies around the world now report or at least publicize some data regarding their sustainability. And JP Morgan Research recently described the pandemic as a potential catalyst for ESG investing. Has this been your experience, do you agree? And what is it in particular that in your view, has caused folks to focus on this?
Susan Lester:
It's a great question and I think ESG, it's always been a part of, at least the work I've done, like I said, in topics, but it's really about connecting to consumers and that's where we've seen. At least I feel the trends pick up, especially in the US with consumers leading a charge of starting to get into the issues, asking more on companies, what are you saying about that? And that of course, has tied into, at the same time, investors becoming more interested in the space as well as shareholders, stakeholders. And then we have the recent catalyst of regulations being looked at as well in this space coming down in forms of the EU directive or the SCC.
And so all of that seems to just tie together, bubbled up in a catalyst of ESG being a hot topic. You see it in almost every news article you look at and you see consumers wanting it. I was surprised to see when I was shopping for my daughter's fifth birthday, I couldn't find a lawyer Barbie, but there was an eco-leadership team Barbie where we had a chief sustainability officer. And if it's made it to the Barbie world, that seems to be really tied into consumers’ behavior now.
Justin Bernbrock:
It's really bottom up ground swelling force that McDonald's consumers, for example, are saying, look, we need to understand more about your environmental sustainability programs.
Susan Lester:
There was a recent Forbes survey of investors, came out of, I believe, France, Germany, UK, and US, that showed a rise in demand for companies to report ESG performance via trusted transparent data. And I think it showed around 65% of US respondents under the age of 34 noted that ESG had become more important to them over the last year.
Justin Bernbrock:
And that's interesting. So McDonald's then has been ahead of the curve on this topic for a while, which is hugely significant because if I have my statistics correct, it's the largest toy manufacturer in the world. Probably serves more meals than any other food service company in the world, so is that fair to say?
Susan Lester:
We keep that information on our corporate website about that. But I say, I've worked on in the past 10 years there and I think you look towards some of the messaging on our website, McDonald's believes it has a purpose to feed and foster communities. And that has weaved into similar actions we take in this space and the related topics such as food quality, climate action, how we look at our packaging and community engagement.
Justin Bernbrock:
Now Susan, tell us what are the challenges for any entity that is focusing on ESG initiatives?
Susan Lester:
One of the biggest challenges I see is ever evolving. It feels like it almost changes every day. And because it's being so talked about in such a hot button issue, it's also coming up in such a wide variety of formats. From the traditional class action lawsuits, self-regulatory cases like in the national advertising division, and then the recent news all around the SEC regulatory perspectives in the US, as well as some regulatory bodies globally looking at it. And to me, that makes it a very unique area of law because it's tied to so many aspects that as a lawyer you have to try to keep in mind when helping, advising the business, or working with them.
I would say, at the same time, that's one of the most enjoyable parts, is that I'm always learning something new. Every day is different and you have an opportunity to work with so many different clients from different parts of the business and so many different legal experts and legal colleagues that have such an expertise in certain areas.
Justin Bernbrock:
Then I do want to try to understand a bit for the lawyers in the audience, what are the legal risks associated with ESG messaging? What are some of the things that in your experience are just the risks?
Susan Lester:
Almost every day now when I get my law 360 alerts or other news alerts, there's probably one topic related to basically a greenwashing false advertising suit. That scrutiny has just increased and whenever scrutiny increases in a legal trend space, I think in the legal world, you see in different areas or class action attorneys taking on that topic and seeing where they may be able to join in or file a suit. And so I think the legal risk just comes with, as companies do work in this space, you want to be able to talk about it. And how do you find a way to talk about it when we're currently in an environment that is being watched from many different angles?
Justin Bernbrock:
I want to shift gears a little bit. And talked about this with others, but it's this theory that there is a through line between ESG and D&I programs in the workplace. And I know you, in particular, have done a lot of thinking and talking about diversity and inclusion as it relates specifically to women and mothers in the workplace. What is it that drives your passion for this in particular?
Susan Lester:
Such a tough question. I grew up with two working parents and always had a working mom and I think when you become a working mom, you appreciate so much what they had to balance and the struggles of it. And what really highlighted this was the pandemic. And it was during those years when many of us had kids at home for God knows how long, probably try to blur it out for a while, daycares were closed. To then even the constant closures and quarantine periods of 14 days at a time, it was doing that where I had many conversations with my colleagues and even among myself, can we manage this? Can we stay in during this period? Working on a computer where my kids have shown up on calls plenty of times, they look cute, but it's very tiring to be working in that space when the office is also that playroom.
And I think for all working parents, that's true, but the burden, in many articles and studies have showed, does fall specifically on moms. And what the pandemic allowed in one way was, opportunities to be more vocal about it. And I believe it brought more attention to it and I would just hope that this story continues because it really wasn't until the end of July when my youngest was fully vaccinated that I had breaks where I wasn't afraid that if they were exposed they had to quarantine.
Justin Bernbrock:
And that's July of this-
Susan Lester:
July 2022.
Justin Bernbrock:
... That's two plus years in.
Susan Lester:
That was two plus years in. And so was this idea that, I don't think if you had young kids under five, you truly appreciated that. The world was moving on and many of us were stuck in this where it wasn't as easy of a decision. If I go into the office but get exposed, what does that mean for my childcare? If I do this, how many days could they be out of school?
And I'm on the privileged side, which I recognize where I do have a company that supports me and I'm able to work from home. It's not even talking on or touching on the burden of women who don't work from home or single parents. I also have a supportive husband who works with MO and can balance that. So it's all these struggles with childcare that the pandemic highlighted and we still haven't fixed them as a society.
Justin Bernbrock:
You've published some of your thoughts, at least on social sites like LinkedIn. Can you just share with us some of what it is you've published. And as I understand or my belief is that, there was a lot of traction, a lot of attention to that, which just goes to show that this is a message not being published as widely as the importance of the topic would otherwise suggest.
Susan Lester:
I think it was a post that I did about eight months ago when it was the height for a five and a half week period that my daughters were each in childcare, maybe one week, due to COVID exposures and whatnot. And I was at the brink where I wasn't used to being that vocal on these topics because I also think there's this idea as a woman in, specifically, the legal field, you feel like if you mention anything about working mom, burden the motherhood, that it would be held against you. But I took it at a breaking point and I was like, I have to say something about this so that everyone recognizes if they're working with a working mom or working parent, this is going on. If I'm delayed on my response or maybe see a little bit more facet on the call, it's because my kids are home with me constantly while trying to keep up the job.
And what was most shocking about that response, it was 546 likes or something, it was definitely _____. And it said it was viewed over 45,000 times, way more than I expected, but it really gave me confidence that people were ready to open up to those discussions. And that at least the path forward is, there shouldn't be that stigma and isn't any more for saying that, that it's not held against you. We all work and want to do our best, but we're also all human and have stuff going on and if we don't bring up these issues, we won't be able to change it. We won't be able to try to have that conversation about what benefit truly supports the working mom or working parent that may need that.
Justin Bernbrock:
This is interesting. Just jumping back a little bit to broader topic of ESG, I think most folks who don't spend a, and I put myself in this category, ton of time thinking or working in the context of ESG topics, you hear environmental sustainability or in governance and you're like, well so I need to recycle more or I need to get the paper straw instead of the plastic one.
But as we talk more about inclusion in the workplace and the burden on working parents and working mothers in particular, is there a potential evolution of ESG .
Susan Lester:
The S is being talked about just as much. And within that, is social, where a lot of work and DEI and including equity and inclusion are discussed. And so I do feel like including all types of employees in the workplace, allowing them to the table is already out there in the ESG discussion. And I do believe it will consider, like you mentioned earlier on Justin, a lot of folks and articles out there do tie it to the pandemic allowed some of those conversations on that social side to happen.
And I think they'll continue. One of the evolutions we've seen, is more companies allowing the hybrid approach that allows some flexibility. And I think that's so important for working parents and to maybe allow them a little bit of a runway to get back to that too. Maybe spent two and a half years used to something and that flexibility might be a little bit hard for them. I think there's a misnomer out there that some folks don't want to go to the office because they don't like it.
Justin Bernbrock:
It's so fascinating. And our own firm in particular, we're rolling out a new policy and I really applaud the firm for shifting the focus from people in offices for certain number of days and at certain times to rather focusing on a certain number of in person interactions. Which don't have to be in an office, they could be at dinner, or they could be while traveling, or there's a whole salute of opportunities to maintain the culture building inherent in interactions with other humans. What do you think, Susan, that companies, firms, or businesses could be doing better in terms of supporting working parents, working mothers? Where do you see the opportunities for improvement?
Susan Lester:
And I should say that also, I do feel very fortunate for, especially, the legal department at McDonald's and my clients have been extremely supportive of me through this. But I do think, Justin, is just continuing those conversations of, when we say hybrid, what does that mean? Or we do want to see you X amount of days in the office, which we have. When something comes up, you still know there's that amount of flexibility if you need it or being able to be open about, my kid is sick, I have to stay home, or I really want to see this dance performance or whatever it may be. And that's allowed too for individuals who don't have kids, because if you don't have kids, you have something that matters to you and important of your life as well that's just as important to the balance of it.
But one of the things I urge them to do, is really just listen to your employees too, just to even learn about what's going on in their life with childcare. Ask companies what can we do to help support women and specifically in this case, be in the workforce, stay in, or be open minded if they choose to come back if they left for a period of time. There was a 2018 study that showed how much the increase in representation of female directors on boards was associated with an increase in R&D spending. And that's just one example that I'm sure there's countless of. As you push different types of candidates and diverse candidates including women to those leadership positions, they can have benefits for the company. In order to get to those positions though, we have to make sure there's a system that allows them to stay in.
I don’t think, unless you're going through it, many realize there's a shortage of childcare facilities. And even if often many moms and I joke, the second person to know you're pregnant in addition to your partner is your daycare facility, but as soon as you know have to go on a wait list and then you're not even guaranteed a spot, there's nanny shortages. And so it's not as easy as maybe it used to be or you thought it was, let me say, it was never easy. And so I think learning about that will help impact what goes into people's decisions when it comes to the office and really looking at the benefits that can support them.
Justin Bernbrock:
So your last point there is something that I spend a lot of time thinking about and it just blows my mind that for the better part of recorded human history, the leading ruling class of men disregarded 50% of the population's ideas. How many great ideas have been missed or not realized earlier on because the idea came from someone that had different biology than the person asking the question. It's bizarre, but it's a really important point for folks to think about. It's so much less about what people are wearing or what their hairstyle is and so much more about, wait a second, what is that person's idea on this?
And human wisdom is collective and if we're disregarding an entire large group of that wisdom, then we're messing up. So I appreciate your thoughts and candor on that in particular. Any other final thoughts on where you see these topics in particular, changing, evolving or where you see ESG headed in the near term?
Susan Lester:
Man, so many ending thoughts you could go with. But in both of these spaces, they're timely and well related to some extent, but one has to do with maybe more broad issues in the legal space right now. How do you stay on top of what's ever evolving in the ESG legal space, connecting with folks, understanding it, and then from the working mom perspective, how do we stay on top of having the conversations? And so I think it's also in both of these spaces being open minded to other ideas and other work that's going on and a constant curiosity of, how do we keep talking about so many of the important issues that are in the world today? As individuals, keeping on top of mind and then companies, how they're thinking about it.
Justin Bernbrock:
Very interesting. No, I agree completely. Our tradition here at the Restructure This Podcast for every guest, is to ask if you were not Global ESG Senior Counsel at McDonald's corporation and you can assume no limitations, so no physical constraints, monetary constraints, what would you be doing for your career?
Susan Lester:
I would have a fashion boutique named Suso's Boutique, which Justin knows was a nickname I got in law school, that would focus on dresses with sleeves and pockets, and clothes for women that are fun and colorful and work appropriate, but also incredibly practical that sometimes seem to be lacking in this world. Although ever increasing, still extremely hard to find occasionally that allow you to be yourself and have the same function that may be thought of in the typical suit world.
Justin Bernbrock:
I like that. That may be one of our best answers thus far. Well Susan, thank you so very much for coming into chatting with us on what are really timely and critically important topics. So thank you.
Susan Lester:
Thank you.
Catherine Jun:
The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of any entities they represent.
This is Catherine Jun of Sheppard Mullin for Restructure This. In current restructuring news, E-House Enterprises, a real estate transaction services provider in China filed for chapter 15 bankruptcy on Monday in the Southern District of New York bankruptcy court seeking recognition of its Cayman restructuring as a foreign main proceeding. The debtor has proposed that a recognition hearing be set for October 27th and judge John Mastando is overseeing the case and has not yet scheduled a hearing. According to the first day declaration, declining residential property sales in China contributed to the company's financial strength. E-House has reported funded debt of approximately 1.2 billion.
In other restructuring news, Brandsafway has reportedly tapped Kirkland and Ellis potentially signaling that it is exploring strategic alternatives to address its high leverage. The construction and engineering services provider has a debt structure that includes a 2.67 billion term loan and a 700 million receivable securitization facility according to standard info. The issuer also has 1 billion of 8.5% unsecured node due in 2025. That's it for current news and notable stories, we'll see you next time.
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