1. TNFD final recommendations announced at New York Climate Week. Last week, the Taskforce on Nature-related Financial Disclosures published their final recommendations at the beginning of Climate Week. The disclosures are broken down into four categories — governance, strategy, risk and impact management, and metrics and targets. Here is a summary of the disclosures recommended under each category.
- Governance: Disclosures related to how the company manages biodiversity impacts, risks, dependencies, and opportunities
- Strategy: What are the effects of the aforementioned impacts, risks, dependencies, and opportunities on the company’s supply chain, operations, finances, and strategy
- Risk and impact management: What processes have the company put in place to identify and address biodiversity impacts, risks, dependencies, and opportunities
- Metrics and targets: Disclosing what targets the company has set to address biodiversity impacts and what metrics are being used to measure those targets
2. Competent Boards publishes Future Boardroom survey. Earlier this year, Competent Boards surveyed board members and senior business leaders around the world to gain insight on the ever-changing boardroom landscape. Last week, the final Future Boardroom report was published. Key findings include that essential competencies are expected to shift away from traditional financial and sector specific skills with more focus on sustainability experience and proficiency with technology. 64% of respondents said interpersonal skills were vital, with just 5% saying that traditional competencies were key. Almost three-quarters of those surveyed felt that a knowledge gap was the main challenge in integrating ESG strategy. 88% believed that continuous education for boards and business leaders was of utmost importance.
3. The boardroom competency gap on cybersecurity. According to a report published by Diligent and NightDragon, cybersecurity specialists only have a board seat at 12% of S&P 500 companies. While over half of those companies have “at least one board member with some connection to the cyber-world”, this does not necessarily mean they are well-versed in cybersecurity issues. Earlier this year, the U.S. Securities and Exchange Commission announced that cybersecurity rules would be coming into effect in 2024. This combined with the growing risk of cyber attacks means that bringing cybersecurity experts on the board is essential.
4. Including biodiversity in ESG disclosures. Many companies around the world are already conducting ESG-related reporting and disclosures, but nature and biodiversity disclosures are still lagging. However, with the adoption of the Global Biodiversity Framework in December 2022 and the Taskforce on Nature-related Disclosures (TNFD) releasing their final recommendations, companies should prepare to address biodiversity as well. Shareholders are also increasingly calling on companies to address biodiversity loss. The TNFD framework was developed in collaboration with the Taskforce on Climate-related Financial Disclosures and International Sustainability Standards Board. It identifies drivers of positive and negative biodiversity impacts as well as core global and sector metrics for companies to begin measuring their nature footprint.
5. Deutsche Bank subsidiary faces substantial greenwashing fine. After a two year long investigation, the U.S. Securities and Exchange Commission (SEC) has fined DWS, the investment arm of Deutsche Bank, US$19 million for greenwashing claims. DWS was accused of exaggerating “the extent to which assets were invested using ESG integration”. Desiree Fixler, DWS’ former head of sustainability, raised the allegations after being fired ahead of the annual reports release. The SEC found the company had misled investors in the annual report.
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Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.