Corporate Compliance Insights recently published an article I co-authored with Mai-Khoi Nguyen-Thanh, senior counsel of securities & governance at Boston Scientific, discussing the guidance from the 2022 proxy season related to environmental activity and disclosures.

“Beyond complying with changing regulatory minimum standards, making [environmental, social and governance] ESG a priority should include watching for signals from institutional investors, proxy advisors and other advocacy groups,” we explained in the article.

Through their recent voting, investors have indicated that:

  • Companies are expected to focus on environmental issues and institute real, measurable advances.
  • Companies should adhere to the standards set by high-quality reporting frameworks.
  • Oversight of climate-related issues cannot be an afterthought: boards of directors must specifically address climate-related risks and balance advancing shareholder goals of environmental sustainability and financial performance.

We detailed guidance from several investment funds and provided practice takeaways based on the latest input, including:

  • Engage in continuous discussion with your investor base — your largest shareholders in particular – to understand their priorities and how they think about your environmental practices.
  • Given the large number of interested stakeholders in this space, the overlapping of potential voting guidelines and evolving reporting standards, seek to balance competing stakeholder interests against your organization’s environmental goals.
  • Management should keep the board updated on ESG matters and best practices, including opportunities to engage with subject matter experts across the ESG spectrum, relevant regulatory updates and disclosure practices.

The full article, “Best Way to Navigate the Climate Disclosures Movement? Listen to the Institutional Investors Driving the Conversation,” was published by Corporate Compliance Insights on April 13 and is available online.