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Mar 18 2024
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: ESG Proxy Trends and 2024 Outlook
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Banks Face More Accusations About Fossil Fuel Funding Versus Climate Commitments
A new report Banking on Climate Chaos 2024 has been published. The report reflects a definite agenda, breaking down and analyzing its claim that “the 60 biggest banks globally committed $705 B USD to companies conducting business in fossil fuels in 2023, bringing the total...
An Unexpected Turn in Climate Tech Rattles Consumers, Companies
I blogged recently about why caution is warranted when companies expect – and rely on – new developments in climate solutions to solve their climate risks. But there was a surprise reminder that not just startups and new technology take...
PCAOB Adopts New Auditor Standards
On Monday, the PCAOB adopted two new auditor standards for financial statement auditors: General Responsibilities of the Auditor in Conducting an Audit and A Firm’s System of Quality Control. The timing of these is interesting in light of the SEC’s...
Today is the Day: Day 2 of PracticalESG’s Virtual Event Series
Today from 11:00am – 2:00pm Central Time, is Day 2 of the PracticalESG virtual event series. The agenda consists of three panels: Panel 1: EU: Developing Policies and Political Undercurrents Panel 2: EU: Ensuring Compliance with New Legislation Panel 3: ESG Disclosure Assurance...
Canadian Government Takes Up Lululemon Greenwashing Inquiry
Previously, we wrote about NGO Stand.earth calling out apparel company Lululemon for allegedly misleading statements regarding the company’s sustainability claims. The Canadian Competition Bureau found these claims compelling enough to take up the investigation as the agency announced a formal...
Court Stays Oklahoma Anti-ESG Law, AG Fires Legal Team
Oklahoma, like several other conservative-leaning state governments, currently has anti-ESG investing laws on the books. The law bans public retirement funds and state agencies from doing business with financial services firms that are deemed to be “boycotting” fossil fuels. Just...
More CFOs in ESG, or Is It the Other Way Around?
When it comes to corporate ESG, most focus tends to be on the CEO. CFOs – the ones directly responsible for a company’s money and how it is used – are in the spotlight less frequently. That might be changing,...
Our Newest Feature is Live!
The world of ESG, climate, sustainability and DEI is full of an ever-growing collection of acronyms, terms and abbreviations that can confuse even experienced practitioners. As a result of member feedback, we have added a Glossary to our website. It...
PracticalESG’s Free Virtual Event Series Continues Tomorrow!
PracticalESG.com is holding the second day of our three part no-cost virtual events on a range of ESG topics. Our session is scheduled for tomorrow May 14, from 11:00am – 2:00pm Central Time, and will consist of three panels: EU: Developing...
What We Can Learn From New York Life’s 2023 DEI Report
New York Life has recently released its 2023 DEI report and it’s good. The report outlines NYL’s diversity, equity, and inclusion initiative, approach, actions, and progress made last year. I enjoy studying DEI reports because there’s always something to learn from...
New AI Identifies “Climate Cheap Talk”
Years ago, it was generally thought that no one really read corporate sustainability/CSR reports. About four years ago, we realized that was no longer true and the question became “who is reading our ESG/sustainability reports, and what are they looking...
Hong Kong Introduces New Sustainable Finance Taxonomy
The Hong Kong Stock Exchange (HKEK) is back in the news as the banking institution launches its new sustainable finance taxonomy. The Hong Kong Taxonomy for Sustainable Finance seeks to protect against greenwashing by introducing science-based criteria and thresholds for...
Are Fake Carbon Credits Sometimes Okay? Part 1
Earlier this week, Financial Times reported on yet another failed carbon credit project, but this one has a couple twists to it. FT wrote: “Shell sold millions of carbon credits tied to CO₂ removal that never took place to Canada’s...
Are Fake Carbon Credits Sometimes Okay? Part 2
Continuing on about Shell’s Quest project carbon credits… Astute readers of Part 1 of this blog will point out there are different regulatory implications depending on whether a project produces carbon credits versus carbon offsets sold into the voluntary market....
G7 Coal Phase Out Pledge Draws Criticism
Last month, the G7 met in Italy where the meeting focused heavily on climate change – including discussions surrounding biodiversity loss, energy efficiency, and global moves towards net-zero. The biggest news of the meeting was an agreement to phase out...
Is Climate/ESG Pressure in the EU Working?
Here’s some news that caught my interest: CNN reported that oil and gas giants Shell and TotalEnergies are “considering abandoning their stock exchanges for Wall Street in a move that would deal a hammer blow to London and Paris.” Shareholders...
More on Misalignment Between Executives and ESG Staff
I recently blogged about how ESG staff and advisors are putting investor priorities over those of their own company. This LinkedIn post from Nawar Alsaadi about a new annual survey from Workiva of ESG practitioners highlights additional areas of misalignment...
Stanford’s Alicia Seiger on Rethinking Business Approach to Climate
Thanks to our friend Ken Pucker for highlighting this excellent YouTube video from climate one – a practical and insightful conversation with Stanford University’s Alicia Seiger, Managing Director, Sustainable Finance Initiative, Precourt Institute for Energy. She provides excellent points and...
ESG Staff & Advisors: Are You Aiming at the Right Target?
At the end of March, I had the opportunity to take part in a challenge hosted by a multiple World Champion Extreme Long Range (ELR) shooter and YouTuber. The concept of being on target was certainly important in preparing for...
Resources for Mental Health Awareness
May is Mental Health Awareness Month and with mental health being an increasingly hot topic in the workplace, this is the time to delve into your company’s approach to mental health and refresh both your understanding of the topic and...
PracticalESG’s Free Virtual Event Series Continues Next Week
PracticalESG.com is holding the second day of our three part no-cost virtual events on a range of ESG topics. Our session is scheduled for May 14, from 11:00am – 2:00pm Central Time, and will consist of three panels: EU: Developing Policies...
Congress Eyes Big Oil Litigation on Climate
Recently, the House Committee on Oversight and Accountability – along with the Senate Committee on the Budget – released a report investigating Big Oil and its attempts to misrepresent the effects of burning fossil fuels on the environment. The report...
SEC Auditor Fraud Enforcement: Lessons for ESG/Sustainability Audits
Last Friday, the SEC charged financial audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers “with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards in its audits and reviews incorporated in more...
More on Climate Tech: The “Death Valley” of Commercialization
Last week, I blogged about the risk of relying too much on developing technology and solutions to solve climate risks at some undetermined future time. TechCrunch published an article last weekend expressing similar concerns, but from a different angle: “the...
Canada’s New Plastics Reporting Requirements
The government of Canada announced a new program requiring certain companies to report on plastic production and disposal. The requirement is being implemented under the Canadian Environmental Protection Act, 1999 which allows the Canadian Environmental Protection Agency (CEPA) to collect...
More on the Congressional Hearing About Social Audits
Continuing from the previous blog on the Congressional-Executive Commission on China (CECC) hearing earlier this week “Factories and Fraud in the PRC: How Human Rights Violations Make Reliable Audits Impossible.” While some criticism of social auditing is warranted (Scott Nova,...
Conflict Minerals Month: Are Recycling Claims Risky?
[Editor’s note: After this blog was drafted and put in our queue for publication, the Alliance for Responsible Mining published an Open Paper addressed to ISO, the London Bullion Marketers Association (LBMA), the Responsible Jewelry Council (RJC) and the Responsible...
EU Brings Greenwashing Proceedings Against 20 Airlines
Airlines are having a tough time when it comes to sustainability. Low carbon air transport doesn’t currently exist, however, to the dismay of regulators, airlines advertised “low carbon” options and “carbon offsetting” for years. This led to a litany of...
Congressional Commission: Use US Securities Laws to Improve Social Audits
Congressman Christopher Smith, Chair of the Congressional-Executive Commission on China (CECC) earlier this week held a hearing “Factories and Fraud in the PRC: How Human Rights Violations Make Reliable Audits Impossible.” The panel of Commissioners and expert witnesses offered brutal...
Hackers Still Pose Environmental Risks at Industrial Operations
When it comes to IT matters these days, everything is AI 24/7. But companies can’t take their eye off other IT matters like cyber risk. Data privacy breaches are important, but you still need to remember potential environmental risks if...
An Example for All? Unilever Gets Real With Environmental Goals
One trope in the environmental/sustainability world is quoting Kermit the Frog’s song “It’s Not Easy Being Green.” It is overused, but true. As ESG and climate concerns grew in recent years, it became common for companies to make grandiose environmental...
Good News from Chief on DEI
Much of the DEI content we see is often riddled with negativity about how companies are not doing enough, or an exploration of whether DEI is “dead”. Chief, the largest network of women executives, produced a survey of C-Suite executives...
CalSTRS Struggles to Calculate 2023 Emissions Data
CalSTRS is a California fund managed by the Teacher’s Retirement Board. In addition to being a $336.2B pension fund, CalSTRS is known for its ESG and climate leadership. They are part of Climate Action 100+ and pledged to achieve net...
NZIA Rebrands but Companies Still Wary
Chalk one up for the Anti-ESG movement as threats of antitrust enforcement appear to have put the final nail in the UN Environmental Programme’s (UNEP’s) Net-Zero Insurance Alliance (NZIA). The UNEP announced last week that the coalition would be discontinued...
A Warning from a Climate Tech Startup Insider
Much of what we as people – and company employees – anticipate with regard to climate risk is that new solutions will develop to manage emissions, remove CO2 from the atmosphere and generally reduce climate impacts. Many developments reported in...
PracticalESG’s Free Virtual Event Series Continues on May 14
PracticalESG.com is holding the second day of our three part no-cost virtual events on a range of ESG topics. Our session is scheduled for May 14, from 11:00am – 2:00pm Central Time, and will consist of three panels: EU: Developing...
Apple, Intel and Others Accused of Using”Blood Minerals”
A new report issued by the law firm Amsterdam & Partners, representing the government of the Democratic Republic of Congo according to Barron’s, accuses Apple, Intel, Sony, Motorola, Lockheed Martin and others of buying tin, tantalum, tungsten and gold from Rwanda...
More on Why You Shouldn’t Dismiss SEC’s Climate Disclosure Rule
We haven’t written about the SEC climate disclosure rule in a few days, so we are due. Last week over on TheCorporateCounsel.net, Liz blogged on why companies still need to keep their heads in the game on climate disclosure. She...
Hong Kong Stock Exchange Adopts IFRS Aligned Disclosure Standards
Last year, the Hong Kong Stock Exchange (HKEX) published a consultation on climate disclosure requirements. After reviewing the consultation, HKEX is adopting climate disclosure standards in line with the IFRS 1 and IFRS 2 standards published by the ISSB. ESG...
CS3D Passes in EU Parliament Finally
After a long and troubled development process, the Corporate Sustainability Due Diligence Directive (CS3D) has passed in European Parliament, leaving only a final vote by the European Council before its official passage. The final version of the directive is watered...
FCA Issues New Guidance on Anti-Greenwashing Rule for Financial Sector
Last year, in an attempt to curtail greenwashing in the financial sector, the UK’s Financial Conduct Authority (FCA) issued an anti-greenwashing rule through the Policy Statement on Sustainability Disclosure Requirements and Investment Labels. With the implementation of the rule right...
California Announces Massive Nature-Based Climate Initiative
California Governor Gavin Newsom announced a new program to use “more than half of its land to fight the climate crisis.” The program includes 81 targets for nature-based solutions intended to help California achieve its world-leading climate goals, including reaching carbon neutrality...
IASB to Develop Examples on Carbon Accounting, Financial Materiality
Here’s some fascinating news from Responsible Investor – the International Accounting Standards Board (IASB) is developing illustrative examples of climate-related financial information that should be included in company disclosures and accounting. This action is the result of an IASB project...
New York State Common Retirement Fund Adopts Workplace Due Diligence for Private Equity Investments
In response to its concern about workplace conditions in assets held by private equity funded by New York’s Common Retirement Fund (CRF), New York State Comptroller Thomas P. DiNapoli announced the Fund’s adoption of its Responsible Workforce Management Policy and Principles. According...
Shell Faces Shareholder Pressure on Scope 3
Oil and gas giant Shell is no stranger to climate controversy. The company was the defendant in a major Dutch case which ruled that Shell had a duty to reduce their emissions, a ruling now being appealed. The company also...
EU Parliament Passes Forced Labor Product Ban
Back in March, we wrote about the EU reaching a political agreement on legislation that would ban the import in the EU of goods created with forced labor into the Union. That legislation has now been officially adopted by Parliament...
Asset Managers “Losing Enthusiasm” for ESG Staff and Leaders
It is challenging to work in the ESG/sustainability/climate space right now. Wheels are spinning one direction in regulatory requirements, voluntary initiatives and disclosure mandates – overloading practitioners. Yet others spin just as fast in the opposite direction in anti-ESG policy,...
Salesforce Advocates for AI Emissions Disclosure
We’ve written previously on concerns about energy needs for AI and its predicted growth. The industry seems to be getting concerned as well. According to this article from The Wall Street Journal (subscription required), US software company Salesforce announced “it...
Is U.S. Residential Solar Success Backfiring?
Yesterday, Zach wrote that Poland generates so much renewable power that prices go negative during peak sunlight hours. Looks like California is in a similar boat – but with potentially more perverse impacts. According to this piece from the Washington...
Are Banks Delivering on Climate Promises?
One of the world’s premier climate pacts for financial institutions is the UN-backed Net Zero Banking Alliance (NZBA). Formed in 2021, the NZBA aimed at getting financial institutions to adopt voluntary climate commitments to limit global heating to 1.5 degrees...
New Zealand Bank Regulator: Climate Risks Don’t “Threaten Bank Solvency”
More about banks and climate… The Reserve Bank of New Zealand (RBNZ) released their stress tests to assess New Zealand banks’ resilience to climate risk. The results may be surprising – and controversial: “The key stress-test for New Zealand’s five...
The Best Explanations of Climate Risk Ever
I’m a fan of making things simple, easy to understand and practical. That is a challenge in ESG, sustainability and climate matters, especially when so many practitioners seem to revel in opacity, ambiguity, complexity and the insular lexicon of the...
In Defense of DEI: Florida’s Stop Woke Act Faces Setback in Landmark Ruling
In a small victory for DEI, a U.S. appeals court upheld a ruling blocking a Florida law signed by Governor Ron DeSantis, which prohibited mandatory workplace diversity training promoting certain progressive concepts. The law, known as the Stop WOKE Act,...
Poland Renewables Create Oversupply
It turns out you can have too much of a good thing. Recently, Poland’s renewable energy production was a little too effective, creating an oversupply and pushing the price of electricity into negative levels. This resulted in the government ordering...
Simplifying the ESG Business Case (Part 4): Opportunities
[Ed. note: You can read Part 1 of this series here, along with Part 2 and Part 3.] In Part 1 of this “occasional blog series,” I introduced a very simple model of how executives think about business. In Part...
French Agency Finds Firms Struggling to Explain Climate Finance
The EU’s Corporate Sustainability Reporting Directive (CSRD) and its accompanying European Sustainability Reporting Standards (ESRS) require companies to disclose a lot of information. Among that information is key data on companies’ climate transition plans and strategies, and part of that...
EU Needs Higher Carbon Prices to Fund Policy
The EU Emissions Trading Scheme (ETS) is often considered the gold standard for cap and trade policy. The government sets a certain number of carbon allowances, and companies are allowed to trade allowances on a secondary market. Funds generated from...
Investors Concerned About Oil Sector Climate Transition Plans
ESG Investor wrote about their Stewardship Summit 2024 earlier this month. One of the topics discussed was how investors are engaging with oil and gas companies, and the information they use to do so. In general, the article explains that...
What Counts in ESG Scores?
ESG ratings and scores are fraught with credibility issues. This stems in part from the opaque nature of ratings methodologies. Most ESG ratings are proprietary black boxes, meaning that the public, researchers, and regulators, don’t know exactly how scores are...
Archive of PracticalESG Event Day 1 Now Available
Last week’s Day 1 of our three-day Practical ESG event series was a success. The three hour virtual event covered The recording is now available for members to play back at their convenience. Click here to access the archive. If...
TNFD and GRI Collaborate on Nature Risks
Nature-related disclosures are garnering a lot of attention lately. We’ve discussed the Taskforce on Nature-related Financial Disclosures (TNFD) and their nature-based disclosure standard, as well as opinions by some who believe that legal duties may exist to disclose nature risks....
CEOs Expect “Significant Returns” from ESG… Finally
A new survey from KPMG reflects a surprising change in CEO views on sustainability/ESG initiatives: expectations for a return on program expense. “… 55% of CEOs reported that they expect to see ‘significant returns’ from their sustainability investments in 3-5...
Chamber of Commerce Seeks to Intervene on the Side of the SEC
Litigation surrounding the SEC’s Climate-Related Disclosure Rules has been a rollercoaster so far and shows no signs of slowing down. The lawsuit can currently be divided into two main positions: Recently, the Chamber of Commerce moved to intervene in The...
Is it OK to be Silent on Climate in SEC Disclosures?
Yesterday, Bloomberg’s Matt Levine wrote about whether it is fraudulent under US securities law to not mention a potentially material risk in SEC filings. The article is a good read and I recommend reading it to get the full picture....
EU Narrowly Passes New Building Standards
The EU passed another highly contested climate law. The Energy Performance of Buildings Directive was recently passed by a narrow majority after facing substantial opposition. The directive establishes new building standards requiring both the renovation of energy inefficient buildings and...
Is a New Class of Sustainable Businesses Forming?
Working on scope 3 emissions and supply chain due diligence often leaves companies trying to reckon with decisions and conditions outside of their control. Continuing with my series of takeaways from last month’s Reuters Responsible Business 2024, let’s look at...
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Featured Q&A Members Only
California Voluntary Carbon Markets Disclosure
I understand that the California legislature is considering a bill that would clarify the voluntary carbon markets disclosure information is not required to be posted to companies’ websites until January 1, 2025. Since that hasn’t been formally adopted (yet), are most companies just relying on the legislative intent and waiting to post this information? I have only been able to find one example so far of a company making this disclosure –
https://www.ally.com/content/dam/pdf/corporate/ally-california-voluntary-carbon-markets-disclosure.pdf.coredownload.inline.pdf
legislative text here – https://legiscan.com/CA/text/AB2331/id/2966827
04/23/2024, Question #21939
Contract manufacturer emissions under the SEC’s climate disclosure rules
Could I have to report contract manufacturer emissions under the SEC’s final climate disclosure rules?
03/14/2024, Question #21308
California AB 1305 – What is a “significant” emissions reduction claim?
The new California AB 1305 – Voluntary Carbon Market Disclosures Act – requires certain website disclosures Jan 1, 2024 for businesses operating in California that make “carbon neutral,” “net zero emissions,” or “significant emissions reductions” claims. What constitutes a “significant” emissions reduction claim? Any thoughts on approach or thresholds? For companies that issue sustainability reports that include emissions reduction information, at what point do you cross the line and have required reporting?
11/10/2023, Question #19206