Changes are Happening in Corporate Sustainability Policy

One story that has hit the news around the world this week is that Royal Dutch Shell PLC, Exxon Mobil Corp. and Chevron Corp lost a significant case involving climate change policy. An investor group had challenged their approach to climate change and last week, the courts agreed with the investors.

On the same day, Exxon Mobil Corp. shareholders voted to replace at least two of the company’s 12 board members with directors who are seen as better suited to fight climate change

Also, Suncor Energy Inc., announced a target to achieve net-zero emissions by 2050 which is in line with the federal government’s commitment under the Paris Agreement. 

Shareholders include the world’s largest fund manager, such as Blackstone, who are forcing companies to account for, and deal with, the risks they face regarding climate change. Blackstone itself which controls large investments by pension and other funds from around the world is a major influence for ESG reporting.

ESG reporting is gaining traction everywhere as evidenced by, for example, the formation of the Sustainability Accounting Standards Board (SASB), and the moves in the EU to make sustainability reporting a mandatory part of corporate reporting. The US Securities and Exchange Commission’s recent request for input on climate change disclosure also shows an interest by this major regulator in ESG reporting.

Companies cannot ignore these pressures. There is a major shift going on in attitudes towards ESG reporting and corporate responses to climate change.

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