Bangkok, Buenos Aires, Cairo, Dhaka, London, New York and Shanghai. Some of the world’s largest cities are in real danger of a disastrous side effect of climate change: rising sea levels. Even if global warming stays at 1.5C above pre-industrial levels, as the Paris Agreement aspires to, the rise in ocean levels, which is already the fastest seen in 3,000 years, will have a massive impact on communities and companies worldwide.
The UN secretary-general António Guterres’ recent address to the security council sounded the alarm bells once again. “We would witness a mass exodus of entire populations on a biblical scale,” said Guterres. “And we would see ever fiercer competition for fresh water, land and other resources.”
The best form of “sea” defence is education, getting the knowledge and confidence to make the most informed decisions, mitigate risk, and seize opportunities as they arise. View our range of world-class ESG and Climate & Biodiversity education programs to set you on the path.
1. Welcome to the age of conscious quitting. Paul Polman, author of “Net Positive” and a Competent Boards’ faculty member, has published a new report that examines what workers in the UK and US value in the workplace. The inaugural Net Positive Employee Barometer reveals that more than two-thirds of those surveyed (69% in the UK, 66% in the US) are anxious about the future of the planet and society as a whole. Most of them (76% in the US, 66% in the UK) want to work somewhere that is trying to have a positive impact in the world. However, two-thirds of those surveyed (68% in the UK, 62% in the US) believe that their companies are still not doing enough to address environmental and social issues. As a result, almost half of Generation Z and millennial employees (48% in the UK, 44% in the US) would take a pay cut to work for a company that shares their values. “The question for business leaders is actually simple,” says Polman in the report’s foreword. “Employees — the people who make or break the company — care about its values and impact more than most people realise, and young and future employees care most deeply of all. How are we going to show them that we care too?”
2. Audit committee priorities. According to a new report from the Centre for Audit Quality (CAQ), the top three focus areas in 2023 for audit committee members are cybersecurity; enterprise risk management; and ESG disclosure and reporting. A third of those (34%) surveyed for The Audit Committee Practices Report believe that audit committees should be responsible for the oversight of ESG disclosure and reporting, a sharp increase over the 10% who shared that view last year. Just over a quarter (27%) chose the board, while 16% selected the nominating or governance committee as responsible. One in five respondents (20%) who think they lack the right blend of experience and skills on their audit committees said that adding ESG or sustainability expertise and experience would improve their committees’ effectiveness. CAQ worked with the Deloitte Center for Board Effectiveness for the survey, with 164 participants.
3. ISSB approves global reporting benchmarks. The International Sustainability Standards Board (ISSB) has approved “global baseline” rules for companies that are disclosing how climate change affects their business. These global sustainability and climate disclosure rules will come into force in January 2024, after a final vote by the ISSB board at the recent IFRS Sustainability Symposium in Montreal, Canada. The final version of the standards are in the latter stages of review and will be released in June 2023. Companies will be expected to produce relevant reports based on these standards in 2025.
4. Electric vehicles enter Europe’s fast lane. The European Parliament has signed off on a new law that bans the sale of cars and vans in Europe that produce carbon dioxide emissions. In effect, cars and vans that use petrol or diesel. This new law puts electric vehicles in the driving seat for transportation across 27 countries in Europe and will stimulate innovation to help the net-zero transition. The European Union (EU) has also set a revised target of a 55% drop in carbon dioxide emissions from vehicles by 2030. Some European car manufacturers have already publicly set targets for electric vehicles: Volkswagen has stated it will only make electric vehicles by 2033.
5. Setting the stage for proxy season. Fresh challenges lie ahead in tumultuous voting. That’s the key theme of The Conference Board’s freshly minted 2023 Proxy Season Preview, which takes a look at what will likely be the prime movers and shakers in this year’s proxy season. Last year, average support for proposals based on the E and S topics of ESG declined from 40% to 34%, a trend that the Conference Board expects to continue in 2023. There will probably be a rise in anti-ESG proposals on the table, which are more problematic to address due to different motivations, rationales and actions if they are voted through. Another key area of focus will be climate-related proposals, with an expected rise in shareholder interest in biodiversity, deforestation and plastic pollution. The Conference Board worked with ESGAUGE, Russell Reynolds and the Rutgers Center for Corporate Law on the report.
Mathew Loup is Competent Boards’ Director, Marketing & Communications. Follow Competent Boards on LinkedIn.Back To News & Views