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governance in brief

Governance in Brief – March 9, 2023

The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”

Webinar Replay: The Net Zero Transition - Building Climate-Aware Investment Strategies

Discover how investors can more effectively respond to climate regulatory initiatives, advance engagement activities and support net zero strategies.

governance in brief

Governance in Brief – March 2, 2023

Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.

Listen to the latest episode of the Sustainalytics Podcast | Aligning Executive Action to Strategy With Sustainability-Linked Compensation

What’s Happening in Sustainable Finance: On the Horizon for 2023, Reporting on Financed Emissions for Sovereign Debt, and More

Despite ending 2022 on a low note, there is optimism for the global sustainable finance market in 2023 as sustainability is still a key issue for investors, issuers and governments and remains closely tied to capital markets.

governance in brief

Governance in Brief – February 23, 2023

SEC considers changes to climate disclosure rules The U.S. SEC is reportedly considering easing a set of proposed rules, released in March 2022, which would have  required public companies to make disclosures about their greenhouse gas emissions (“GHG”), climate-related  financial metrics, and climate-related risks.

The Role of Sustainability-Linked Financial Instruments in Heavy Industry Decarbonization

With the effects of climate change looming, governments and organizations of all stripes need to work with carbon-intensive industries and invite them to participate in global decarbonization efforts. This can, in part, be achieved through sustainability-linked instruments.


A Closer Look at How and Where Net-Zero Commitments Are Falling Short

Read about the methods investors can use to measure portfolio alignment to net-zero and the importance of not only assessing climate transition plans, but also their governance structure and implementation.

governance in brief

Governance in Brief – February 16, 2023

Toshiba Corp receives USD 15.2 billion take-private offer Toshiba has received a USD 15.2 billion buyout offer from a consortium led by investment fund Japan Industrial Partners (“JIP”). The offer was made after the tie-up managed to secure commitments from banks worth USD 10.6 billion, including a commitment line of JPY 200 billion (USD 1.5 bullion) for working capital. The deal, which would see the Japanese electronics maker going private, is subject to board and shareholder approval. Toshiba has set up a special committee, composed of seven outside directors, to assess the offer.

How a Critical Minerals Company Forged Ahead With Its ESG Risk Rating

With aspirations to include environmental, social, and corporate governance (ESG) principles as a fundamental part of its business model, FYI Resources Ltd.

governance in brief

Governance in Brief – February 9, 2023

Activist investor Nelson Peltz targets Disney seat Trian Partners has filed a proxy calling on Disney shareholders to oppose the reappointment of Michael Froman as director at the 2023 AGM and to replace him with Trian CEO Nelson Peltz. Trian argues that Froman has no corporate experience outside of Disney, accuses the board of having caused financial losses through poor corporate governance, and has criticized Disney’s handling of its 2019 Fox acquisition as well as its failure to establish an effective succession plan. Disney, which has rejected Peltz’s request for a seat, claims that he lacks relevant skills and has no plan to enhance financial performance, while arguing that Peltz’s election would be a “mistake” that would “threaten the strategic management of Disney during a period of important change in the media landscape.” Reuters | CNBC | Trian Partners|

Successful ESG Programs: Two Important Habits From High-Performing Companies

In this blog we provide insights into the best practices for developing a successful ESG program by highlighting two important habits of high-performing companies in Sustainalytics’ universe.

Smoke stacks at sunset

Carbon Emissions Data for Investors: Closing the Reporting Gap and Future-Proofing Estimations

Despite improvements in the quality and quantity of carbon emissions reporting from companies, significant gaps remain. Discover the current state of emissions disclosures, learn the advantages and disadvantages of widely used estimation models, and discover the approach underpinning Sustainalytics' Carbon Emissions Data product.

governance in brief

Governance in Brief – February 2, 2023

Former McDonald’s HR Head faces landmark ruling The Delaware Court of Chancery has ruled that corporate officers have the same oversight obligations as corporate directors under Delaware law. The decision paves the way for a shareholder lawsuit filed against former McDonald’s executive David Fairhurst in 2021. Fairhurst, who served as the firm’s Global Chief People Officer from 2015 until his termination in 2019, is accused both of breaching his fiduciary duties by permitting a corporate culture of sexual misconduct and of engaging in sexual misconduct himself. Fairhurst had argued that he could not be sued, citing purportedly precedential rulings that such oversight rests solely with directors

What’s Happening in Sustainable Finance: Climate on the International Agenda, New Instruments to Support Emerging Markets, and More

Climate change and adaptation are high on the international agenda. Listen to learn how the outcomes from COP27 and COP15 could influence sustainable finance markets and get a rundown of recent notable market transactions.

eBook | An Introduction to the Circular Economy: A Beginner’s Overview on Transforming Production to Minimize Waste

An Introduction to the Circular Economy: A Beginner’s Overview on Transforming Production to Minimize Waste

This ebook looks at the circular economy through an ESG lens, exploring why it is gaining traction with governments and businesses, emerging challenges during this transition, and what potential solutions look like.

10 for 2023

10 for 2023: Investing in Emerging Technologies

A fresh approach looking into technological innovation that has the potential to impact global sustainability and the way we live, work, and move.

How a High Street U.K. Bank Reflected Its Values and Ethics Through ESG Ratings and Reporting

By receiving an ESG Risk Ratings License from Sustainalytics, The Co-operative Bank could better communicate how its ESG Risk Rating reflected its values, policies, and programs around environmental, social, and corporate governance (ESG) issues.

governance in brief

Governance in Brief – January 26, 2023

Beijing takes golden shares in Alibaba units The Chinese government has acquired golden shares in two Alibaba subsidiaries, allowing it to exert veto power over major decisions while maintaining a relatively modest equity investment. A unit of state-backed Zhejiang Media Group first acquired such a minority stake in one Alibaba subsidiaries in September 2022, and an arm of the Cyberspace Administration of China (“CAC”) acquired a minority stake in another subsidiary in January 2023.

Sustainalytics Podcast

The Sustainalytics Podcast | Cybersecurity and Data Privacy in Focus: Cyberattacks and ESG

In this episode of the Sustainalytics Podcast, our experts explore cybersecurity and data privacy trends, how cyberattacks affect bottom lines, and why companies should invest in robust cybersecurity and data privacy policies.

Sustainability-Linked Financial Instruments: Creating Targets and Measuring Your Company's Performance

Sustainability-linked bonds and loans have begun to gain more attention. This blog post takes a closer look at key performance indicators (KPIs) and sustainable performance targets (SPTs) that must be kept in mind while opting for these instruments.