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.
Mandatory disclosure deadlines – Guidance for in-house counsel
Canada is at the dawn of a new era of mandatory ESG disclosure, which requires both private practice and in-house lawyers to increase their skills, knowledge and competency in the ESG space in order to most effectively serve their clients. Read more from Canadian Lawyer Magazine including commentary from Conor Chell, head of the MLT Aikins ESG practice group.
Canadian expert panel urges action on corporate disclosure of climate risks
With the significant number of climate-related disasters such as destructive wildfires, heat waves and flood across Canada in 2023, an expert panel is calling for increased urgency on mandatory corporate reporting of climate-related information and data in Canada. A report prepared by the Smart Prosperity Institute for the Sustainable Finance Council (SFAC) indicates that Canadian companies will need to dedicate significant additional resources to address greenhouse gas data gaps and assess physical risks to their businesses. Read more from The Globe and Mail.
Advertising agencies demand clarity on acceptable clients
Several B Corp-certified ad agencies have demanded guidance on which clients they can work with when holding a ‘B Corp’ certification. This certification is given when businesses have met a standard of performance, accountability and transparency in many different categories of corporate sustainability. This has left ad agencies questioning whether they can work with oil and gas firms. Read more from The Drum.
Shell shelves ambitious plan for development of carbon offsets
The new chief executive at Shell, Wael Sawan, has recently shelved a plan for global development of carbon offsets including numerous nature based solutions to achieve its climate targets. Shell has yet to adjust its target of net-zero emissions by 2050 and continues to receive pressure from shareholders and other stakeholders to put forward a tangible and achievable climate plan. Read more from the Financial Post.
Safety professionals – Ready to report to the SEC?
Three years ago, the SEC’s Human Capital Management rule went into effect, mandating additional disclosures around management, development and retention of workforce. Health and safety data and information from professionals and auditors may be explicitly added to the SEC’s future disclosure requirements. Read more from Practical ESG.
EFRAG-GRI Joint Statement of Interoperability
Global Reporting Initiative (GRI) and the European Financial Reporting Advisory Group (EFRAG) have released a joint statement on their interoperability between the European Sustainability Reporting Standards (ESRS) and the GRI Standards. Those who are already GRI reporters will now report under the ESRS, and those reporting under ESRS are considered to be reporting to the GRI, which means they will not have to report twice. Read more from Global Reporting.
Increase in regulatory reporting across jurisdictions drives demand for ESG controller role
A recent Deloitte poll indicated a lack of confidence in financial reporting teams to report on ESG matters. With this in mind, companies are recognizing the need to implement an ESG controller role. An ESG controller would, among other things, be responsible for ESG reporting process development and integration, ESG reporting and compliance, data management and analysis, and ESG risk management. Although very few companies already have an ESG controller, it is expected that over time this role will become increasingly important and necessary in shaping a more sustainable future. Read more from Thomson Reuters.
Major carbon neutral label dropped
Many companies – including Nestle, Leon and Sodexo – are no longer using the label “carbon neutral” on their products as the term has become increasingly associated with greenwashing. There was a need from consumers for more rigorous requirements and details. New consumer-facing labels related to substantiated climate performance such as annual emissions reductions are being developed. Read more from The Grocer.
Science Based Targets Initiative splits standard-setting and target validation functions
With the intent of “improving governance, boosting integrity and increasing capacity,” the Science Based Targets Initiative (SBTi) has split its organization into two entities – one focused on assisting companies with setting science-based greenhouses gas emissions reduction targets and one focused on independent review and validation of those targets. Read more in ESG Today.
California sues largest oil companies over climate deception
California has taken legal action against Exxon Mobil, Shell, Chevron, ConocoPhillips, BP and the American Petroleum Institute (API) for their roles in deceiving and misinforming the public since the 1950s about the climate risks from burning fossil fuels. The lawsuit proposes the creation of a special fund to finance climate mitigation and adaptation efforts in the state. Read more in the Financial Times and LA Times.
Case against Danone over global plastic pollution enters mediation
In January 2023, ClientEarth, a nonprofit environmental law organization, took Danone to court in France, alleging that Danone had inadequately addressed the environmental, health and human rights impacts of the plastics in their products. In September 2023, a French judge ordered Danone to enter into mediation with ClientEarth to discuss the demands and find a workable solution. Should the mediation fail, the legal process will resume. Read more from ClientEarth.
Asset management firm co-founded by presidential hopeful Ramaswamy sued over practices
Vivek Ramaswamy and Anson Frericks, co-founders of Strive, an asset management firm, are being sued by former employees. Accusations were made that Strive pushed its employees to violate securities law and mistreated its staff, including by way of sexual harassment. Ramaswamy is also being accused of misrepresenting Strive’s finances to employees and investors. It seems as though Strive was more of a PR move than an asset management firm. Read more from Bloomberg.
B.C. towns organizing class action climate suit against Big Oil
Two B.C. residents, Dawn Allen and Alaya Boisvert, have started a province-wide campaign called “Sue Big Oil.” They are working together with other residents and municipalities to commence a class action lawsuit. The success of such a suit could transform the way cities access funds to rebuild after extreme weather events. The “Sue Big Oil” campaign is continuing to build traction, and campaigners are hoping to have the financial support of all B.C. residents to cover the legal costs. Read more from The Breach.
Small island nations going to court to protect ocean from climate impacts
Nations including the Bahamas, Tuvalu, Vanuatu, Antigua and Barbuda are taking on high-emitting countries in court to determine whether greenhouse gas emissions absorbed by the ocean should be considered pollution. If the nations are successful, obligations could be enforced to reduce carbon emissions and to protect marine environments. These obligations could also help guide countries in meeting their commitments under the Paris climate agreement. Read more from The Guardian.
EU Commission adopts rules to equalize the carbon price paid by European producers
The European Commission announced the adoption of reporting rules for importers of products under the Carbon Border Adjustment Mechanism (CBAM). One of the purposes of these reporting rules is to equalize the carbon paid by producers outside the EU. Importers will have to report on the embedded emissions of goods imported into the EU. Read more from ESG Today.
California lawmakers pass significant climate legislation
California lawmakers recently passed the Climate Corporate Data Accountability Act, SB 253, which will require businesses with revenue over $1 billion to report on their greenhouse gas emissions. This is a huge step toward combatting climate change as several major companies in the U.S. are located in California. Read more here.
Canada’s temporary foreign worker program linked to modern slavery by UN envoy
UN Special Rapporteur, Tomoya Obokata, called Canada’s temporary foreign worker program a “breeding ground for contemporary forms of slavery.” Migrant workers are in a difficult position due to the risk of deportation if they lose their work permits, preventing them from changing employers if they face abuse. The Special Rapporteur has called on the federal government of Canada to address these issues directly including work permits which would allow foreign workers to switch employers freely. Read more from CBC.
Walmart, Diesel and Hugo Boss face federal probe for ties to forced labour
Three Canadian retailers are being investigated to find out whether they are selling products made in China with Uyghur forced labour. These investigations are taking place by the as the Canadian Ombudsperson for Responsible Enterprise (CORE) in response to complaints made by different human rights groups. Read more from Importers Network.
UN letter to Saudi Aramco over climate and human rights
UN Working Group on the issue of human rights and transnational corporations and other business enterprises, along with a number of UN Special Rapporteurs, wrote a letter to Saudi Aramco (the largest oil and gas company in the world) and many banks that enable its business that their work might be a violation of international human rights law and standards. These business affairs are contrary to obligations under the Paris Agreement on climate change. The letter outlines the UN’s concerns with the company including the human rights and climate impacts, access to information and financing. Read the letter here and more from ClientEarth.
Children’s voices must be heard on climate crisis, says UN rights body
The UN Committee on the Rights of the Child has released a public statement declaring the climate emergency, the collapse of biodiversity and pervasive pollution as a direct threat to children’s rights. States across the world have an obligation to address the concerns of children and to protect those who choose to engage in environmental protests. Read more from The Guardian and the UN Committee on the Rights of the Child.
Citizens vote to stop all oil drilling in Ecuador’s national park
Ecuador’s Yasuni National Park has the most biodiverse concentrations of plant and animal life. It is also home to the last “uncontacted” Indigenous communities on the planet. Citizens of Ecuador demonstrated their support in protecting their environment by voting for a referendum which prevented the drilling for approximately 726 million barrels of oil. Read from more Pressenza.
Nike under pressure from investors on working conditions
Activist investor, Tulipshare, has filed a proposal demanding that Nike issue a report on its supply chain due diligence activities in relation to human rights abuses in its supply chains. A separate group of investors has written to Nike this month with allegations of wage theft at two factories within its supply chain. Read more from ESG Investor.
Major investors vote against Glencore’s climate plan
At this year’s Swiss miner’s annual general meeting, BlackRock, one of Glencore’s largest shareholders, and MFS Investment Management voted against Glencore’s climate plan due to inconsistencies in Glencore’s strategy including the impact of its coal assets. Read more from Financial Times.
Climate campaign against Barclays leads to search for new climate director
U.K. bank Barclays is in search of a climate communications director. Barclays has recently been the target of climate campaigners and has faced external pressure over its support of carbon-intensive industries. Barclays states that it is working on transitioning to a low-carbon business model and plans to have net-zero emissions by 2050. Read more from The Guardian.
Use of ESG performance data grows within asset management and compensation
Vidrio Financial conducted a survey and found that, despite the ongoing political pressures and backlash surrounding ESG, 64% of portfolio managers are using ESG factors to weigh the risk and opportunity of investments. The survey also demonstrated that many asset managers are using ESG performance metrics to determine employee compensation. Read more from the Institutional Investor.
CFA Institute issues report analyzing greenwashing risks in investment fund disclosures
The Chartered Financial Analyst (CFA) has prepared a report analyzing product disclosures for a sample of 60 investment North American and European funds that use ESG factors in their investment processes. The report identifies potential improvements “to improve investor comprehension and alleviate concerns about the perception of potential greenwashing.” Read more from the CFA Institute.
The evolution of the Chief Sustainability Officer
Chief Sustainability Officers (CSO) have historically played more of a PR role in companies. They have seldom been involved in the strategic planning of a company. However, CSOs are becoming increasingly involved by integrating ESG issues into corporate strategy. A study showed that there are some barriers with the professionalization of the CSO role, including a lack of role clarity, insufficient access to power and resources and inconsistencies across sectors. Further, the CSO role is moving away from corporate social responsibility and becoming more strategic. Read more from the Harvard Business Review.
Workload of in-house lawyers grow over ESG demands
Several in-house lawyers have seen their workloads increase especially in light of emerging technology and ESG requirements. With this comes new risks associated with ESG, such as greenwashing. Legal teams are tasked with ensuring their public statements actually match the company’s performance. Doing this alongside their existing obligations can be a difficult task, which is why some employers are making efforts to hire or reallocate existing employees to sustainability efforts. Read more from the Financial Times.
Physical climate risk guidance released for six industries by Intact Centre
The University of Waterloo’s Intact Centre on Climate Adaptation recently released a report profiling climate risk matrices (CRMs) for six industries. This CRMs contain physical risk information that is useful for portfolio and enterprise risk management. The latest report goes on to recommend that CRMs be developed for all industry sectors. Read more from Sustainable BIZ.
New study finds carbon offsets to reduce deforestation do not achieve claims
A recent study has demonstrated that carbon offset projects related to reducing deforestation are not as effective as they have claimed. The study looked at the carbon offset projects in six different countries, raising concerns about the long-term viability of many global carbon offset programs. From Inside Climate News.
New carbon capture incentive program anticipated in Alberta
A new government incentive program for carbon capture and storage (CCS) is expected in the “coming months” for Alberta-based projects. The incentive program is intended to supplement federal government tax credits for CCS, creating the conditions for numerous companies with projects on the table to finalize investment decisions. Read more from Reuters.
UNFCCC releases first global “stocktake” on climate action
The United Nations Framework Convention on Climate Change (UNFCCC) has released a new report that assesses the collective progress made by countries on climate action since adoption of the Paris Agreement. The report provides little positive news on the progress made globally in limiting warming to well below 1.5°C and is expected to inform upcoming recommendations and negotiations at COP28. Read more from Reuters.