According to the Chartered Institute of Procurement and Supply (CIPS), almost 30% of UK organisations failed to submit disclosures on modern slavery to the British government in 2022. Under the Modern Slavery Act of 2015, any company with an annual revenue greater than £36 million must release annual reports on their anti- slavery strategy. The drop in transparency and corporate engagement with the government on this issue suggest that board members and executives are placing less importance on human rights abuses in the supply chain. In 2022, just over 8,000 statements were collected by the government, of the 150,000 companies that fall into the category outlined in the Modern Slavery Act.
Human rights issues in the supply chain are just one of the many complex issues that board members and business executives are asked to address. Competent Boards’ best-in-class ESG and Climate & Biodiversity programs can help create a toolkit for boards and business leaders to tackle these topics head on.
1. Companies reporting climate disclosures under ISSB receive an extension. The International Sustainability Standards Board has announced that companies using their new climate disclosure framework will receive a one-year extension on sustainability risk and Scope 3 emission disclosures. Companies were given an extra year to allow them to focus on climate reporting. In a statement the ISSB explained that this extra year was provided because “investors have indicated that while they need consistent, comprehensive sustainability-related information across all risks and opportunities to inform their investment decision-making, the need for disclosures about climate-related risks and opportunities is the most urgent.”
2. Getting ESG audits right. ESG audits can be complex, especially since they vary widely between companies and industries. According to Mary Pratt of TechTarget, there are 6 steps to a successful ESG audit.
- Conduct a materiality assessment to determine which opportunities and risks are the most relevant to your organisation.
- Choose a disclosure framework. Look to industry peers and competitors to see how similar organisations are choosing to manage their disclosures.
- Determine which metrics are needed in order to report via the chosen disclosure framework and how information will be collected.
- Do due diligence to ensure that the data collected is as accurate as possible. Following this, board members should be involved so that there is board oversight of the audit process.
- Finally, once the audit is completed the process should be assessed to see whether the appropriate procedures were carried out and what can be improved next time.
3. How to build workplace wellbeing. Since the COVID-19 pandemic hit, organisations around the world have been paying closer attention to employee well-being and mental health by providing coverage for mental health interventions, training sessions, and promoting self-care. However, according to Corporate Compliance Insights, these programs are often underutilised. To address this, management and executives should determine the culture of wellbeing they are aiming to foster in their employees. They should also consider who their employees are, as they come from diverse backgrounds with hugely different lived experiences. Different departments will also have different stressors that may require unique interventions. This will help identify the causes of workplace stress, allowing companies to address the individual issues more effectively.
4. ESG for customer and employee retention. In recent years, sustainability has become top of mind to consumers. According to the Economist Intelligence Unit, online searches for sustainably-made products are 71% higher than they were in 2016. With the climate crisis looming and growing expectations of corporations to take stances on political and social issues, companies that fail to develop strong ESG strategies put themselves at huge risk. ESG-focused organisations are setting themselves up for success by conserving resources, attracting and retaining employees more effectively via shared values, lowering their costs of operation, and gaining brand loyalty.
5. Apple’s new carbon removal fund. In efforts to decarbonise its portfolio, Apple has launched a $200 million fund which will provide financial support for projects that are removing carbon from the atmosphere. This fund will fall under Apple, Goldman Sachs, and Conservation International’s joint Restore Fund which was first launched in 2021. Management of the fund will be taken over by an HSBC Asset Management and investment firm Pollution joint venture called Climate Asset Management. These green investment funds play a pivotal role in Apple’s decarbonisation strategy as the company aims for net-zero emissions through its operations by 2030.
Ira Srivastava is Competent Boards Program Coordinator. Follow Competent Boards on LinkedIn.
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