Viewpoint: Why Corporate Boards Need to Embrace ESG Oversight
With large institutional investors, proxy advisory firms, regulators, consumers and other company stakeholders focused on environmental, social and governance metrics in evaluating a company, the board’s oversight of ESG risks and opportunities is no longer optional.
The rise of stakeholder capitalism, coupled with the Covid-19 pandemic and social justice issues, have significantly increased focus on ESG matters. The Securities and Exchange Commission even increased its bandwidth, creating a new Senior Policy Advisor for Climate and ESG position, as well as a new Climate and ESG Task Force in the SEC Division of Enforcement. Acting SEC Chair Allison Herren Lee directed her staff to evaluate disclosure rules to facilitate “consistent, comparable, and reliable information on climate change” and to create an effective ESG disclosure system. These developments signal that boards can no longer take a “wait and see” approach with respect to ESG and should start addressing matters proactively.
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“Viewpoint: Why Corporate Boards Need to Embrace ESG Oversight,” by Yelena M. Barychev and Jane Storero* was published in the Philadelphia Business Journal on April 26, 2021.
* Jane Storero serves as senior corporate governance counsel at LTSE Services. She previously served as a partner at Blank Rome.