ESG Framework: Global Markets Respond
Environmental, social and governance-focused investing and shareholder engagement have never been more important to international markets. In the coming weeks, we will explore developments in principles of ESG through various lenses. Starting with environmental awareness and the focus on clean energy, we will examine the latest in renewables investment and finance, including approaches to financing increasingly large clean energy projects and sustainable/green finance. Then, with an eye toward proxy season, we will highlight principles boards should keep top of mind, from social capital management to board diversity and disclosure requirements. Bookmark this page to stay informed.
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Corporate Due Diligence: Evolving Disclosure Requirements and Considerations
When the Business Roundtable updated its Statement on the Purpose of a Corporation, the move ignited a discussion about companies’ responsibilities to all stakeholders and how that duty is consistent with fundamental principles of corporate law. Companies, boards and regulators are standing at a crossroads between current guidance and increasing and changing guidance expected in the near term.
This March, as an outgrowth of that movement, the Securities and Exchange Commission announced the creation of a Climate and ESG Task Force to address environmental, social and governance-related disclosure requirements and has invited public comment. In the European Union, an ambitious set of new disclosure requirements will soon impact the investment and lending practices of financial institutions.
To help companies and boards stay on top of changing expectations for corporate due diligence, we have prepared a series of memos, podcasts and videos.
- 2021 Corporate Governance Trends—U.S. Biopharmaceutical Industry
- ESG Update: EU Business Human Rights Developments
- New York Department of Financial Services Issues Proposed Guidance on Financial Risks of Climate Change for Insurers
- SEC Focuses on Potential Updates to U.S. Climate Change Disclosure Requirements
- EU Authorities Propose Mandatory Sustainability-Related Key Performance Indicator (KPI) Reporting for EU Companies
- Corporate Political Contributions
- SEC Finalizes Rules Updating Statistical Disclosure Requirements for Banking Registrants
Human Capital Management, Board Diversity and Other “Social” Topics on Directors’ Agendas
An increasing number of companies are examining how improvements in human capital management and diversity can increase long-term value and mitigate risks. At the same time, institutional investors, proxy advisory firms and activists are calling for enhanced disclosures on board and workforce diversity, talent development, gender and racial pay equity, health and safety metrics for employees. Governments across the globe are also enacting policies and regulations that address equity and inclusion issues. For instance, President Biden has issued two executive orders addressing issues of discrimination and equity, including initiatives by federal agencies and contractors to promote equity for underserved groups such as people of color and LGBTQ+ individuals.
Employers are also adapting to new workplace rules from governments and regulators prompted by the pandemic, including those applying to employee leave and work from home policies.
To help companies and employers stay informed on these and other “social” aspects of ESG, we explore relevant business and legal issues in the resources below.
- Governance Diversity: Human Capital Management and Board Composition
- President Biden Revokes Restrictions on Diversity and Inclusion Trainings
- Governance Diversity: Looking Ahead
- S&C Critical Insights: Lessons From the 2020 Proxy Season: Board Diversity
- S&C Critical Insights: Lessons From the 2020 Proxy Season: Human Capital Proposals
- BlackRock and State Street Update Proxy Voting Guidelines: Focus on Diversity and Climate Change
- Corporate Political Contributions
ESG and the role of renewables and clean technology
The renewables sector is filled with opportunities and challenges: issuing a company’s first green bond or loan; structuring a bankable large-scale clean energy project; optimizing a portfolio of renewables assets; and navigating complex regulatory environments around the world. To help dealmakers stay on top of these issues, we explore relevant business and legal issues in the resources below:
- The Winds of Change: U.S. and European Perspectives on Financing and Investing in Offshore Wind Projects
- Renewables Update—Key Considerations for Renewables Transactions -- M&A Series – Part 3
- Renewables and Hydrogen Update—U.S. Market and Regulatory Developments – Part 2
- Renewables Update—Current Market Overview and European Developments – Part 1
- Hydrogen—Recent Developments in Hydrogen Projects: Hydrogen Series – Part 2
- Hydrogen—Fuel of the Future or Just Hot Air?: Hydrogen Series – Part 1
- Sustainable Finance Update: EU Taxonomy, Updated Equator Principles, New Actions by Securities Regulators and Other Recent Developments