ESG & DE&I

Group behind resolution concerned by ecosystem loss The SEC has declined to give Tesla the go-ahead to omit a shareholder proposal regarding concerns about the impact of deep-sea mining as used to extract materials for vehicle batteries. The proposal, filed by As You Sow, requests that Tesla ‘commit to a moratorium on sourcing minerals from deep-sea mining, consistent with the principles announced in the Business Statement Supporting a Moratorium on Deep Sea Mining.’ The proponent adds in a supporting statement: ‘If Tesla cannot so commit, shareholders request that the board disclose its rationale and assess the company’s anticipated need for…

New EU regulation ‘may become a de facto global ESG reporting standard’ Applied since only January this year, the EU’s Corporate Sustainability Reporting Directive (CSRD) has already emerged as a global, transformative force in the ESG regulatory context. Replacing the Non-Financial Reporting Directive, CSRD came into force in January 2023 and has applied since the start of this year. Alongside CSRD, the European Financial Reporting Advisory Group (EFRAG) developed the European Sustainability Reporting Standards (ESRS) as a roadmap for CSRD compliance by generating information that helps investors understand the sustainability impact of the companies in which they invest. This must…

Companies face new rules for disclosing their climate-related risks After two years of intense public debate, the SEC approved the nation’s first national climate disclosure ruleson March 6, 2024, setting out requirements for publicly listed companies to report their climate-related risks and, in some cases, their greenhouse gas emissions. The new rules are much weaker than those originally proposed. Significantly, the SEC dropped a controversial plan to require companies to report Scope 3 emissions – emissions generated throughout the company’s supply chain and customers’ use of its products. The rules do require larger companies to disclose Scope 1 and Scope…

Revised version does not appease some on either side of debate over reforms The reaction to the SEC’s 3-2 decision to approve climate-disclosure rule changes suggests the vote may not be the end of the story in terms of either pressure for further regulation or potential efforts to overturn the agency’s actions. In the meantime, governance professionals will be looking at their next steps in terms of compliance. The SEC’s rulemaking has been the subject of a wide array of often strong opinions, including around 24,000 comment letters and threats of litigation to overturn the rule changes. The decision to…

This week’s governance, compliance and risk-management stories from around the web – The Wall Street Journal (paywall) reported that the Federal Trade Commission (FTC) sued to block Kroger’s $25 bn bid for Albertsons, raising questions about one of the largest ever supermarket deals. The FTC in its lawsuit said the deal would result in higher food prices and lower wages for employees and asked a court to block the companies from closing their deal on antitrust grounds. The companies’ plan to address the government’s concerns by selling stores in Washington, Colorado and other states would not solve the problem, the…

Biodiversity emerging as a key area of interest alongside climate More than two fifths (43 percent) of Canadian institutional investors plan to launch impact products this year, according to research. That was the big surprise to come out of interviews with 32 Canadian institutional investors, representing around C$4.5 tn ($3.3 tn) in assets. Researchers point to an increasingly ‘nuanced’ understanding of themes under the ESG umbrella, with biodiversity emerging as a key area of interest alongside climate. ‘The conversation is expanding from a focus on climate change and broadening to ‘environment’ as a topic area,’ researchers note in the semi-annual…

Global climate group in IPO spotlight with campaign against JBS listing talks ‘perfect storms’ and CEO letter campaigns Blue-chip companies spend big bucks on social programs. Apple, for example, recently increased the budget for its diversity program alone from $100 mn to $200 mn, while Mercedes Group spent €97 mn ($104 mn) on trainingin 2023, up from €93 mn the year before. The areas normally included under the S pillar of ESG are quite broad and people-oriented but can be divided into company internal and external projects. Internal Cyber-security Diversity Ethics Health & safety Human rights Innovation Recruiting Supply chains…

This week’s governance, compliance and risk-management stories from around the web – CNBC reported that a US judge in a court filing ordered that Tesla and SpaceX CEO Elon Musk must testify in a probe by the SEC into his 2022 acquisition of Twitter. The SEC is investigating whether Musk, or anyone else, committed securities fraud in 2022 as he began buying stock in Twitter and building a stake ahead of his leveraged buyout of the social media company. In the order, federal magistrate judge Laurel Beeler wrote that although Musk and his legal team argued the SEC’s subpoena in…

This week’s governance, compliance and risk-management stories from around the web – The Wall Street Journal (paywall) reported that US companies’ diversity initiatives are here to stay but are being adapted in response to lawsuits and outside scrutiny. Companies are trying to develop programs that promote inclusion without running afoul of the law and potentially bringing costly consequences, according to lawyers and corporate advisers. That means some are abandoning practices such as numerical targets that can be seen as ‘quotas’ or the use of unconscious bias training that casts blame. Legal pressure has been mounting following last year’s US Supreme…

SEC dismisses company’s request to omit shareholder proposal S&P 500 company JB Hunt Transport Services is facing a vote at its upcoming AGM on a proposal regarding the healthcare it offers workers. The proposal, filled by Trillium Asset Management, states: ‘To address LGBTQ+ inequality in society and employment, shareholders of [JB Hunt] ask the company to adopt and publicly disclose a policy (with details and timing at the discretion of the company) of equitable healthcare coverage for all employees, regardless of sexual orientation or gender identity.’ The resolution is likely to go to a vote after the SEC rejected JB…