Sky Blog
Investors are increasingly incorporating assessments of companies’ performance on environmental, social, and governance (ESG) issues in their portfolio decisions. The global assets under management of the signatories to the United Nations Principles for Responsible Investment (PRI) have grown from about …
Investors are flocking to companies with good environmental, social, and governance (ESG) scores and are threatening to shun companies with poor ones. For many investors, ESG scores are critical to a company’s long-term profitability, not to mention its impact on …
In a 1987 paper, available here, we argued that non-investor stakeholders play an important role in influencing financial policy and corporate valuation. We also distinguished explicit claims between a company and its counterparties from what we called implicit claims. …
The value and relevance of environmental, social, and governance (ESG) is an important question because of the increasing popularity of using ESG factors to evaluate investments in companies.
In August 2019, for example, the Business Roundtable, which includes nearly 200 …
Companies will not survive Covid-19 unless they communicate with their stakeholders. As the world around them transforms, corporate leaders must welcome input from those on the front lines of corporate activity – primarily employees and consumers, but also local communities, …
As directors and shareholders become increasingly attuned to ESG considerations and stakeholder-oriented governance, they have sought guidance about how to incorporate these imperatives into the board’s decision-making process—particularly regarding decisions that entail trade-offs or an allocation of resources between and …
Over the past five years, international organizations ranging from the United Nations and the G20 to the World Economic Forum and the International Organization of Securities Commissioners (IOSCO) have advocated expanding environmental, social, and governance (“ESG”) or “non-financial” reporting by …
The growing view that corporations should take into account environmental, social and governance (ESG) issues in running their businesses, and resistance from those who believe that companies should be managed solely to maximize share price, has intensified the focus on …
Companies recognize the importance of environmental and social (E&S) factors and are giving consideration to a broader group of stakeholders to help mitigate risk. However, new regulations bring uncertainty to the future of environmental, social and governance (ESG) proposals.
The …
Purpose is currently one of the hottest topics in corporate governance. Commentators are demanding not only that corporations formally articulate a purpose, but that the corporate purpose embrace the interests of non-shareholder stakeholders or society more generally. In August 2019, …
Using environmental, social, and governance (ESG) factors to evaluate investments in companies has in recent years become increasingly popular and controversial. One of the most notable and influential initiatives for ESG investing is the United Nations Principles for Responsible Investment …
Just as with the financial crisis of 2008, corporate boards of directors are facing the combination of increased responsibility, scrutiny, and uncertainty as their companies grapple with the COVID-19 pandemic.
In the wake of the Great Recession, The Conference Board …
Recent months have seen institutional investors, multinational organizations and the private sector emphasize the lack of (and importance of) comparable and decision-useful ESG disclosures. Some of the key issues in considering ESG disclosures are:
Choice of Framework and Content. …
Proponents of enhanced environmental, social and governance (“ESG”) disclosure have identified corporate income tax as a relevant metric. While it is premature to predict how ESG standards in this regard will evolve, a key area of focus is tax arbitrage, …
In a letter to directors of public companies, State Street Global Advisors’ President and CEO, Cyrus Taraporevala, reiterated SSgA’s focus on “financially material” ESG issues as “a matter of value, not values.” He also confirmed that SSgA will go …
In a new article, we aim to identify the elements and stages that have led to increased attention to corporate social responsibility issues, especially with regard to environmental, social, and governance factors, and to focus on the meaning of each …
Shareholder proposals urging corporate boards to report on climate‑related risk made headlines in 2017 when they earned majority support from investors at ExxonMobil, Occidental Petroleum, and PPL.[1] The key to this historic vote was the support of the Big …
In 2018 and 2019, the SEC released the first amendments to Regulation S-K to emerge from its decades-long project to “modernize and simplify” the disclosure obligations that apply to publicly traded companies. New proposed amendments released for public comment in …
The stakes for responsible corporate stewardship have never been higher.
Corporations today account for a greater proportion of our collective productivity than ever before. Of the 100 largest economies in the world, 71 are corporations, and only 29 are countries. …
The embrace of shareholder activism as a tool to bring about broad social change is a welcome development. It reflects a trend of outsourcing public functions and values to private actors and stems in part from a frustration with interest …