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EU Commission Imposes Materiality Threshold on Taxonomy
As part of the EU’s widespread efforts to simplify sustainability regulations, we’ve seen many landmark sustainability laws revisited. Among these is the EU Taxonomy, a law designed to classify sustainable economic activities and direct investment toward them. The European Commission...

Wind & Solar Tax Credits Axed by EO; CCUS Tax Credits Reduced by OBBB Act
Well, there it is… Monday, The White House issued a new EO Ending Market Distorting Subsidies For Unreliable, Foreign Controlled Energy Sources. The meat of it: “Within 45 days following enactment of the One Big Beautiful Bill Act, the Secretary...

Coal-Based Scope 2 Emissions Set to Increase
Coal-based energy production got a boost from investors globally in 2024 after a dip during 2023 according to Bloomberg. “Global banks channeled more than $385 billion to the coal power industry over the past three years, with annual flows increasing...

EU to Exclude 90% of Companies from CBAM
The CSRD isn’t the only sustainability regulation undergoing “simplification” in the EU. A number of other regulations are being addressed through omnibus proposals, including the Carbon Border Adjustment Mechanism (CBAM). CBAM was designed to apply an embedded carbon tax on...

Financial Times: Chinese Trans-Shipments Through Viet Nam Try to Avoid US Tariffs
Recently, John and I blogged about the increasing risk of regulatory enforcement against companies that try to avoid the new US tariffs. The Financial Times wrote that companies are already trying this tactic: “Chinese businesses are sending increasing volumes of...

Companies Change DEI Talk in Proxy Statements
I’ll admit it right off the bat – this blog is straight from John at TheCorporateCounsel.net. There isn’t a way to be more clear and concise: “Winston & Strawn looked at 2025 Fortune 100 proxy filings, and their recent blog...

2025 SEC Filings Show Major Change in Climate Language
The Wall Street Journal posted an interesting article about year-over-year changes in corporate SEC disclosures concerning climate matters: “In total, the number of securities filings containing terms related to droughts, floods, wildfires and extreme heat declined 31% in the first...

A (Big) Sign That Companies Can’t Rely on Every Supplier for Carbon Reductions
If you weren’t already thinking that the transition economy is going to be long and bumpy, you may find this troublesome. Net Zero Investor reported “Two-thirds of the 45 biggest banks globally increased their financing of the fossil fuel industry...

New This Week on PracticalESG.com
Notable additions to PracticalESG.com this week are below. Blogs of the week: Another close call between Morgan Stanley: 83% of Companies Can Measure ROI of Sustainability and US Climate Litigation Holds Steady. We added 8 new CSRD reports, which can...

US Climate Litigation Holds Steady
In a world of uncertainty in ESG, it’s good to know there are some things you can count on. Here in the US, that something is ESG litigation, which showed no signs of slowing down in 2024. The Grantham Research...

Institutional Investors See Engagement Better Than Divestment
We’ve written in the past about divestment versus activism/engagement as ESG investment strategies and catalyzing change in companies. Over on TheCorporateCounsel.net, Liz just blogged about what institutional investors think about shareholder activism: SquareWell Partners – a Europe-based shareholder advisory boutique...

Case Study: Worker Voice IT Platform Offers Significant Improvement Over Social Auditing
I’ve long been a stickler when it comes to non-financial auditing and most critical about social audits of suppliers. Others have expressed similar concerns, yet nothing has dampened their popularity or use. However, quality remains a concern. A potential viable...

The Green Claims Directive Is Not Dead Yet
The EU’s groundbreaking anti-greenwashing law has been years in the making. In a dramatic turn of events, the Green Claims Directive is now in danger, just shy of the finish line. Last week, many were reporting that the proposal was...

Morgan Stanley: 83% of Companies Can Measure ROI of Sustainability
Guess there are no more excuses for sustainability professionals. A new report from Morgan Stanley, Sustainable Signals, Corporates 2025, shows that while “high investment needs again top the list of challenges, with 24% naming this in their top three barriers...

Congratulations to Kumi on 10 Years!
This week’s newsletter from PracticalESG Partner Kumi made me wonder if I somehow stepped out of a time machine to the future. Andrew said this is Kumi’s 10th anniversary. Sorry to say this Andrew – but your math simply can’t...

NGO Accuses JBS of Violating Deforestation Laws
Recently, Brazillian meat producer JBS began trading on the New York Stock Exchange. However, its introduction to the NYSE has drawn the ire of NGO Mighty Earth, which alleges that JBS violates multiple laws in its supply chain and should...

Political Headwinds Don’t Change the Weather
The sustainability field has been in a perpetual state of anxiety since January, and for good reason. The current deregulatory environment makes it hard to argue the case for sustainability programs, budget, headcount and credibility. Without new mandatory reporting at...

SEC Likely to Investigate Supply Chain Due Diligence in Tariff Enforcement
Over on TheCorporateCounsel.net, John blogged about how the SEC can get involved in supply chain/country of origin claims by companies to avoid tariffs and Risk Factor disclosures in corporate 10-Ks: In a “D&O Diary” blog, Kevin LaCroix expands the discussion...

Making Sustainability Make Sense: Takeaways from Reuters Responsible Business 2025
This week, Lawrence and I attended Reuters Responsible Business 2025. We were pleased to meet many blog subscribers and members and enjoyed picking your brains and engaging in great discussions. There was a palpable shift in mood from previous conferences,...

Our Newest Partner – Impakt IQ
We’ve just added a new partner to our Partner Program – Impakt IQ. Impakt IQ is the first business intelligence platform purpose-built to quantify and manage the intangible drivers of business value. The software bridges sustainability, finance, and operations into...

SEC Withdraws Enhanced Disclosures Rule for ESG Practices
The federal government’s deregulatory environment is in full swing. In addition to the SEC’s now-defunct climate disclosures rule, other SEC actions are being rolled back under the current administration. The SEC’s 2022 “Enhanced Disclosures by Certain Investment Advisors and Investment...

Avoiding Greenwashing Through Effective Communication
Speaking of greenwashing … Greenwashing is a major source of ESG litigation risk. While common, greenwashing isn’t always intentional, and effective communication lies at the core of greenwashing prevention. A recent memo from Charles Russell Speechlys gives tips on how...

A Backwards Way to Find Operating Value of Sustainability
Most of us in the sustainability world approach our jobs from the perspective of sustainability. Well, duh… a batter doesn’t walk up to the batter’s box with the mindset of the groundskeeper. So while this makes sense, it can also...

ISSB Expands to Thirty-Six Jurisdictions
While we are experiencing an ESG slowdown here in the US, and the EU is facing sustainability “simplification,” the IFRS’s International Sustainability Standards Board (ISSB) is chalking up a lot of wins. The IFRS has recently published seventeen “jurisdictional profiles”...

Being Nice to AI Wastes Resources
This is kind of funny, but also an example of sometimes hidden implications of human behavior and sustainability (although I say that sustainability is a business problem needing a business solution). Not long ago, I read a LinkedIn post from...

Attending the State Bar of Texas Annual Meeting 2025?
[Ed. note: In observance of Juneteenth tomorrow, our offices will be closed and no blogs will be published. Blogs will return on our regular schedule Tuesday 24.] If you are in Texas and will be attending the 2025 Annual Meeting...

Tractor Supply Results Indicate DEI Isn’t Universally Material
There is a growing movement (perhaps maturity) in ESG/sustainability materiality circles that not everything is material to every company. Ashley Walter discussed this in our recent podcast, Matt Sekol frequently writes that carbon isn’t universally material, and Advisory Board member...

JPMorgan: Stock Price Impact of Sustainability Controversies “Enduring” but “Challenging to Discern”
JPMorgan published a new report “First Principles – Controversy Watch: A playbook to assess the financial impact of controversies” purporting to provide a “comprehensive investor guide to navigating controversies, leveraging JPM Quantitative Research, case studies and academic research to analyse...

BlackRock Unbanned in Texas, Still Faces Antitrust Litigation
Texas and BlackRock have locked horns in several battles over ESG. The investment firm was placed on a state “banned” list in 2022, preventing it from doing business with Texas public entities. Additionally, litigation filed by Texas last year alleges...

What’s Happening With Shareholder Proposals on ESG/Sustainability – Part 1
Here’s something interesting from Meredith’s Proxy Season blog about SEC determinations on requests to exclude shareholder proposals from company proxies. This HLS blog reports on the results of Mayer Brown’s review of SEC Staff responses to almost 280 no-action requests...

What’s Happening With Shareholder Proposals on ESG/Sustainability – Part 2
In my previous blog, I pulled from Meredith’s Proxy Season blog about SEC Staff no-action requests. Here, I continue on topic – borrowing from The Conference Board’s “Proxy Voting Weekly Digest:Week Ended May 30, 2025.” “As the 2025 proxy season...

New This Week on PracticalESG.com
This week’s notable additions to PracticalESG.com are below. Blog of the week: Big Companies Stop Publishing Sustainability/DEI Reports. Should You? We added 12 new CSRD reports, which can be viewed here. Hot Topics for the Week: “2025 Anti-DEI Proposals and...

Uyghur Forced Labor Prevention Act Enforcement Continues
With all the recent attention on tariffs, we might lose sight of the US Uyghur Forced Labor Prevention Act (UFLPA). Given the administration’s focus on China, the UFLPA isn’t likely to go anywhere. But there is an interesting twist. Here...

Old Operating Technologies Create Big Financial Wins for Sustainability
Usually, today’s sustainability news revolves around something new – AI, climate tech, new fuels, etc. It isn’t terribly often we see wins by using older/known solutions. A recent Yahoo Business article discussed plans by Arvind Limited, one of India’s largest...

Canada’s New Greenwashing Guidance Gives Clarity on Forward Looking Statements
We’ve been following changes to Canada’s competition law designed to crack down on greenwashing. The amendments, passed last summer, caused some companies to change their behaviors, though not always in the intended manner. Fearing steep penalties, some companies decided to...

New Study on ESG Investing: Same as Non-ESG Investing?
One of my favorite disruptors in the ESG/sustainability space is London Business School prof Alex Edmans. He tackles a lot of sustainability sacred goats and re-evaluates previous studies. He, Tom Gosling and Dirk Jenter revised their paper “Sustainable Investing in...

Big Companies Stop Publishing Sustainability/DEI Reports. Should You?
Speaking of saying less about sustainability… Bloomberg reported last week that “Nike joins a growing list of companies that includes JPMorgan Chase & Co., Constellation Brands Inc. and Akamai Technologies Inc. that are either canceling or delaying publication of their...

Youth Plaintiffs Challenge Federal Energy Policy
Our Children’s Trust, the climate legal advocacy group known for state-level wins in Hawaii and Montana, has set its sights on federal policy with a new lawsuit challenging recent Executive Orders (EOs) promoting fossil fuels production. The organization summarizes its...
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Featured Q&A Members Only
Extent to which diversity must be discussed in proxy statement
It is my understanding that the only requirement as to diversity left for the proxy at this time is in relation to whether the nominating committee considers diversity in selecting directors. If a company, at the last minute out of concern of anti-DEI sentiment, changes its nominating committee charter to remove all reference to considering diversity when selecting directors, does it still need to mention diversity in the proxy as to selecting directors since the charter still spoke of diversity during the past fiscal year?
It appears that under the rule, a company is required to address in the proxy whether it considers diversity among its director nominees, and if so, how it considers diversity. This would appear to indicate that even if a company is concerned over anti DEI sentiment, it still needs to address diversity in the proxy, in terms or whether and how it considers it, even if it is considered in a way that does not involve race or gender.
It is still unclear to me whether a company that updates its charter at the last minute to remove all reference to race and gender in diversity can represent on the proxy that it does not consider race and gender in its diversity assessment. However it is my understanding that because proxies are forward looking, this may be acceptable.
It has also come to my attention that Glass Lewis issued a statement that it is sticking to its diversity expectations unlike ISS. Does this mean that a company that no longer requires race or gender as part of a diversity assessment risks a negative recommendation from GL?
07/8/2025, Question #29424
Removing DEI from SEC 10-Ks
Are companies being advised to not discuss DEI in their 10-Ks due to the executive orders? If a company previously mentioned having a diversity policy and its diversity workforce statistics, is that going to create an issue to now remove them?
05/5/2025, Question #28369
CDP Disclosure Insight Action
We recently received a letter from CDP Disclosure Insight Action requesting that we disclose certain environmental information through their questionnaire. From what I can tell, this is not required and, as we currently disclose sustainability related information in many different places and to many different people, we’re not inclined to voluntarily add another to the list. However, I was curious what other companies who received this letter intend to do. Would appreciate your thoughts here.
04/15/2025, Question #27998