Behind the ESG headlines - June 10, 2022

By mathew-loup

Environmental, social and governance (ESG) topics come in many shapes and sizes, including climate change, human rights, supply chain; diversity, equity and inclusion (DEI), cybersecurity, disclosures, taxation, executive pay, anti-corruption and stakeholder engagement. This broad spectrum shows the vital importance of ESG to companies, communities and people, irrespective of political beliefs.

The order of importance varies in different regions of the world — SEG, GSE, EGS, SGE — which adds to the complexity and the priority-setting. However, this round-up remains egalitarian, so treats each topic with equal weight. If you need a deeper understanding, then there’s no better place to go than one of our Designation or Certificate programs.

1. Ladies (almost) first: The European Union (EU) has agreed to its first-ever quota for the number of women to be on corporate boards. By June 30, 2026, all publicly-listed companies in all 27 EU member states must have at least 40% female representation in non-executive board seats, or 33% in executive (such as chief operating officer and chief executive officer) and non-executive combined. The current EU representation is just over three in 10 seats (30.6%), but there is a wide gulf among the member states. In Estonia, women hold only 9% of non-executive board seats, while in France that total climbs to 45%. Meanwhile the UK, which left the EU under a Brexit-sized cloud, currently has 39% of women on FTSE100 board seats. 

2. Psychological safety priorities. A recent survey by theBoardList and Felicis Ventures emphasizes the value that today’s senior business leaders place on diversity, equity and inclusion (DEI). Of the 200 executives surveyed, 84% said that a commitment to DEI at their company was “incredibly important”. Just over a third (36%) have turned down a new job opportunity when they saw that current leadership lacked diversity. More than half the respondents (55%) said that it was “very unlikely” that they would join a company that had no females at VP level or above. 

3. Investor doubts. Advisors’ interest in ESG investments may be on the wane, according to a report from the Journal of Financial Planning and the Financial Planning Association. The 2022 Trends in Investing Survey revealed that the number of investors looking to decrease ESG investment has trebled, albeit to only 15%. Of the 413 financial planners surveyed, 34% said they would continue to recommend ESG investments as a good option for their clients. Clean energy is the top objective for investors, followed by water management and sustainable infrastructure.  

4. Okay not to be okay. The World Health Organization has sounded the alarm again about the impact that the climate crisis is having on people’s mental health. A new policy brief encourages countries to include mental-health and psychosocial support (MHPSS) in their response to the urgent situation the world is facing, using case study examples from India, Bangladesh and the Philippines to show how it can be done. The WHO recommends five key approaches:

  • Integrate climate-change considerations into policies and programs for mental health, including MHPSS, to better prepare for and respond to the climate crisis
  • Integrate MHPSS within policies and programmes dealing with climate change and health
  • Build upon global commitments
  • Implement multisectoral and community-based approaches to reduce vulnerabilities and address the mental health and psychosocial impacts of climate change
  • Address the large gaps that exist in funding both for mental health and for responding to the health impacts of climate change

5. Greenwashing in Canada. A new survey by the Institute for Sustainable Finance (ISF) has made clear the weak quality of sustainability-related data in Canada. According to the survey, only 6% of respondents were “very satisfied” with the data available and 41% said they needed additional data, making it a top priority for their sustainability reporting. Missing values, errors and incomplete information were the main pain points highlighted in the survey.

Mathew Loup is Competent Boards’ Director, Marketing & Communications. Connect with him on LinkedIn.

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