In contrast to Polonius’ famous advice to his son Laertes before departing for France in Hamlet, I always like borrowing from TheCorporateCounsel.net because Liz, Emily, John and Dave bring great perspectives and have an eye for relevant issues. Plus, John is the writer I aspire to be, but never will. Here are a few recent posts from them that touch on E&S governance:
From John, this blog on the rise in ESG targets and goals in SEC filings:
White & Case recently published its annual survey of ESG disclosure practices in SEC filings. The survey reviewed annual meeting proxy statements and annual reports of 50 Fortune 100 companies and identified trends in ESG disclosures from 2020-2022. Given the SEC’s comment letters on climate disclosure & the fact that everyone knew a climate rule proposal was on the way when proxy season began, it’s not surprising that environmental topics were the fastest growing category of ESG disclosures. Trailing close behind were disclosures about human capital management – again, that’s not surprising in light of the SEC’s recent rulemaking in the area.
And on the impact of SEC’s proposed climate disclosure rule on private companies:
If you’re a private company that’s part of public company value chains, you may well find yourself confronting some pretty significant – and costly – challenges imposed on you by virtue of those public companies’ need to comply with the SEC’s proposed “Scope 3” GHG emissions disclosure requirements. Scope 3 emissions include all indirect GHG emissions occurring in the upstream and downstream activities of a company’s value chain, and in case you’re wondering where public companies will look to get that kind of information, this CFO Dive article says that you need wonder no longer.
Over on The MentorBlog, Emily writes about efficacy of corporate codes of conduct, which are frequently held out as the basis for a company’s ESG culture:
A recent report from LRN evaluated nearly 150 codes of conduct from some of the top companies headquartered in Europe and the U.S. to assess where the companies were in terms of effectiveness – and what they can improve on in their codes of conduct going forward. LRN assessed each code of conduct based on eight dimensions: (1) tone from the top; (2) purpose and values orientation; (3) applicability and administration; (4) speaking up; (5) risk topics; (6) knowledge reinforcement; (7) usability; and (8) look and feel.
And from Emily on the Proxy Season blog, an update on As You Sow’s proxy voting service partnership with Proxy Impact:
The announcement states that As You Sow submitted 90 resolutions this proxy season on E&S issues. While 60% were withdrawn after reaching an agreement with the companies, the rest “went on to earn six majority votes including a 92% vote at Boeing and a 43% average vote overall.” With ESG proponents forming partnerships to amplify the retail voice in annual meetings, it’s additional incentive for companies to pay attention and get their arms around the retail voting bloc for next proxy season.
Finally, John’s take on the recently-announced SEC enforcement against EY:
In addition to a $100 million civil money penalty – the largest ever imposed by the SEC on an auditor – the SEC’s order imposes a set of sweeping undertakings on the firm… The order also imposes various certification and training requirements and requires the firm to provide a copy of the SEC’s order to all of its public company and broker dealer audit clients. This last requirement seems to me to be the equivalent of requiring EY to lay the order on the table of the audit committees that have retained it. That should make for some interesting conversations.