With the ESG landscape evolving at a rapid pace, MLT Aikins is pleased to offer a curated list of timely and relevant ESG articles to help you stay current. Learn more about our ESG services.
Confident in your board’s competency? If not, now is the time to act
As ESG takes hold of minds and markets, boards of directors are expected to provide ESG oversight even though few have deep knowledge, formal reporting processes or clear accountabilities for climate resilience and ESG performance. In response to the increasing expectations, pressure and legal risk that boards are facing on ESG issues, we've outlined six practical steps boards should consider. Read more from MLT Aikins.
Increasing supply chain scrutiny: Are you ready for Canada’s modern slavery reporting requirements?
An act that would require companies across Canada to report on the measures they’re taking to guard against modern slavery in their supply chains is expected to soon become law. The Fighting Against Forced Labour and Child Labour in Supply Chains Act was first introduced in November 2021 through Senate Bill S-211. The Act establishes new reporting obligations with which many Canadian organizations would be required to comply by May 31, 2024. Read more from MLT Aikins.
Is it time to rethink your ESG reporting controls?
In this blog, Lawrence Heim writes that companies can be charged and even face steep fines for failing to have adequate controls and procedures in place. Importantly, these charges and fines may arise even when the company has not committed any reporting violations. If you haven’t advanced your ESG reporting procedures and controls, now may be the time to do it. Read more from Practical ESG.
The IASB exploring further guidance for inclusions of climate-related risks in financial statements
The International Accounting Standards Board (IASB) has announced a new project focusing on how companies have responded to IFRS educational materials about inclusion of climate-related risks in financial statements. The new project will have a goal of ensuring that its work complements incoming IFRS Sustainability Disclosure Standards. Read the press release from IFRS.
Brazilian mining firm agrees to settle dam collapse claim for US$55.9 million
The SEC charged a Brazilian mining firm over false and misleading disclosures about the safety of its dams before one collapsed in 2019, killing 270 people. The basis of the charge was that the company misled investors, communities and governments with manipulated and falsified ESG disclosures. To settle the charges, the mining firm agreed to pay US$55.9 million. The settlement still requires approval from the U.S. District Court. Read more in this blog from MLT Aikins.
From ESG Always to ESG Conscious, Purpose Investments Inc. makes changes amid regulatory scrutiny
Purpose Investments Inc. has clarified that 38 of its funds do not fall into an ESG classification, while also making a host of changes including updating older ESG-related press releases to confirm they were “point-in-time publications,” and changing the way it describes itself, going from “ESG Always” to “ESG Conscious.” Purpose Investments Inc. is making these changes to ensure it aligns with rules from the Ontario Securities Commission and guidance from the Canadian Securities Administrators. With ever-intensifying scrutiny on ESG reporting in Canada from bodies such as these, now is the time to ensure your outdated disclosures are addressed. Read more from Advisor's Edge.
Looking for clarity on greenwashing in the U.K.? Don’t hold your breath
The Federal Conduct Authority (FCA), the U.K.’s financial regulator, announced that it is delaying the rollout of its ESG labelling rules. The FCA states that the delay is required to accommodate the “significant response to its consultation on new rules.” The FCA plans to publish the rules in Q3 of 2023, but has not set an expected date for when these rules will be implemented. Read more from ESG Today.
Climate-related litigation cases test governments across the globe
Experts say the Biden administration has sided with climate advocates following release of DOJ brief
In an action against Suncor and ExxonMobil that local governments in Colorado launched, the U.S. Department of Justice filed a brief arguing the case should be heard in state court. Some experts posit that this is a move in support of climate litigation because state courts are usually viewed as friendlier to plaintiffs suing oil companies over climate change than federal courts are. The U.S. Supreme Court will have final say on whether the case is heard in state or federal court – a decision that could have a “ripple effect on other climate litigation.” Read more from the Guardian.
Reducing renewables commitment embroils South Korean Government in lawsuit
In contrast, the South Korean Government is now the subject of a lawsuit started by a group of citizens and two renewable energy companies and backed by 24 NGOs. The citizens and renewables companies are looking to revoke South Korea’s new national electricity plan, which reduced South Korea’s 2030 renewable energy target by nearly 10% and, according to the claimants, does not accord with South Korea’s net-zero commitments or its commitments to future generations.
European Court of Human Rights set to hear its first case linking climate change to human rights
The Club of Climate Seniors, a group of more than 2,000 women with an average age of 73, are suing the Swiss Government for failing to implement an adequate climate policy. In particular, Switzerland is seeing its temperatures rise faster than the global average and seeing more frequent heat waves. Increased temperatures and heat waves are linked to increased mortality among elderly women. While the Club of Climate Seniors was unsuccessful in its claim in Swiss courts, if it is successful in the European Court of Human Rights, it could set a precedent that would bind all 46 of the court’s member states. Read more from the BBC.
United Nations General Assembly passes resolution to clarify states’ obligations around climate change
On March 29, 2023, the United Nations General Assembly passed a resolution seeking an advisory opinion about states’ obligations regarding climate change and human rights from the International Court of Justice (ICJ). The resolution, championed by the island nation of Vanuatu and backed by countries and NGOs alike, has been called a “powerful demonstration of effective multilateral diplomacy” that “provides a model for protecting human rights on climate change issues.” The ICJ’s opinion will be non-binding, but could become binding, depending on how it is treated by states afterwards. Read more from Human Rights Watch.
Activist shareholders push for transparency on climate-related financial risks in pension funds
Both Amazon and Comcast are trying to prevent their shareholders from passing resolutions that would have the companies disclose information about how their 401(k) pension funds are invested, according to As You Sow, a nonprofit. As You Sow argues that Amazon and Comcast are exposing workers to climate-related financial risks, because failing to invest in green investment funds may result in over-investment in assets which become stranded in a green economy, and may risk creating hiring and employee retention issues, noting an increase in “climate quitting” of late. Amazon and Comcast have stated that As You Sow’s claims are “misguided” and that information about employee compensation and benefits should not be made public. Read more from edie.
Rating agency MSCI set to strip hundreds of funds of their ESG ratings
In what is being described as a “financial fracas,” MSCI Inc., the world’s largest provider of ESG ratings, appears set to reduce its triple-A rated ESG European EFTs from more than 1,000 to just 54. This seems to reflect regulatory crackdowns on greenwashing, with effects being felt most acutely in Europe but still applying globally. More on this “shake-up” is available from ESG University.
Are this carbon unicorn’s offsets for real or just a creature of myth?
South Pole is considered to be one of the world’s first “carbon unicorns,” boasting a client list that includes Gucci, Nestlé, McKinsey, Barclays, L’Oréal and the Government of Singapore, operating across six continents and employing more than 1,200 people. However, in this Bloomberg exposé, it appears that South Pole’s carbon offsets deliver far fewer benefits than advertised.
South Pole, whose largest projects focus on preserving forests to generate carbon offsets, appears to have overestimated its credits’ actual atmospheric benefit by (according to some experts) as much as 30%. One of South Pole’s biggest projects has already sold 23 million credits.
In response to criticism, South Pole has stood by the legitimacy of its credits and argues that climate change will not be stopped unless “massive amounts of private capital” are deployed, and carbon offsets are the best way to do that.
The IPCC releases its sixth assessment report
The IPCC’s sixth report sets out that “human activities… have unequivocally caused global warming” through “unsustainable energy use, land use and land-use change, lifestyles and patterns of consumption.” The IPCC expects that global temperatures will reach 1.5⁰C of warming in the near term and that this will lead to risks which are more severe than assessed in AR6’s predecessor studies.
All of the information about AR6 can be found here, with the full report available here, and a summary of key takeaways found here.