If you don't choose the carrot, you may get the stick

Norton Rose Fulbright 2023 Annual Litigation Trends Survey

In the 18th edition of its Annual Litigation Trends Survey , Norton Rose Fulbright’s key takeaway is that for corporate counsels concerned with class actions in the year ahead, 37% said ESG-related class actions stand among their greatest concerns, up from 8% last year. Interestingly, the report distinguishes between “ESG concerns” – which rank third in terms of litigation and class action concerns – from employment and labor disputes, the most common area for litigation among all industries and from cybersecurity, data protection and data privacy concerns, which ranked second. The report explains the predominance of employment and labor ligitation risks “comes amid increased enforcement actions by federal employment and labor regulators, rising unionization activity and a heightened focus on social justice and diversity, equity and inclusion”. Good to know. The report also provides some interesting statistics that companies can definitely benchmark themselves against, including a median of five lawsuits per respondent and an average spend of US$1.7 million/billion dollars of revenues per dispute. With the rise of sustainability-related regulations in many jurisdictions, enforcing these regulations will inevitably give rise to more litigation. How do companies avoid litigation? Don’t wait, and do it for real.

Future of the SASB Standards: What you need to know for 2023 disclosure

The IFRS Foundation published a blog recently summarizing recent decisions of the International Sustainability Standards Board as it works through modifications to finalize the two draft standards IFRS S1(general requirements) and IFRS S2 (climate disclosures). The final versions are expected before the end of Q2 2023. What caught our attention is the advice to companies – many of which are indeed wondering what they should be doing in the fast-evolving reporting landscape. The advice is that“companies that already use the SASB Standards should continue to do so and those that are not using them yet should consider adoption. Report preparers that are new to sustainability disclosure should use 2023 to prepare for the future application of the IFRS Sustainability Disclosure Standards.” It further outlines a three-step process for companies to follow:

1. Evaluate internal systems and processes for collecting, aggregating and validating sustainability-related information across the organization and its value chain.
2. Consider the sustainability-related risks and opportunities that affect the business.
3. Review the ISSB’s proposed standards and supporting materials, including the SASB Standards, CDSB Framework, TCFD Recommendations and the Integrated Reporting Framework.

We would advocate starting with step # 2, because inception point is your company’s material issues, and those will determine what data and information you want to collect; this leads you to step # 1, the outcome of which we recommend you don’t let discourage you from moving forward with reporting on your material ESG issues 😉. And finally, when doing step # 3, we strongly encourage practitioners to thoroughly read the standard or framework you choose to apply, and to start with what you can, even if it’s just one.

Ontario Teachers’ increases expectations on board diversity in 2023 Proxy Voting Guidelines

The Ontario Teachers’ Pension Plan (OTPP), one of Canada’s largest institutional investors with assets under management of CA$242 billion, announced that it had revised its proxy voting guidelines for the upcoming season to advocate for large publicly-listed companies in developed markets to increase the proportion of board directors identifying as women to a minimum of 40%. This is up from the prior expectation of a minimum of 30% it set out since 2013. The guidelines also focus on clear and timely diversity-related reporting and suggest expanding disclosure to also include those who self-identify as non-binary in addition to those identifying as women or men. In case you’re interested, they also have pretty clear guidelines regarding climate change💡. It is fascinating to witness the cocktail of stakeholder-driven market, regulatory, and litigation pressures combining to drive change in corporate behaviour.

Corporate sustainability reporting: advice for today and tomorrow

This webinar is for corporate sustainability reporting practitioners seeking to find—or keep— their bearings in the fast-changing landscape of standards, regulations, and stakeholder demands. Our panel of experts will offer practical advice for them to use during their reporting season and beyond.

Don’t miss this opportunity to get answers to all your questions!

We will send the recording to all registered participants.

Register here