Director Summit | Environmental, Social and Governance

June 14, 2018

Our mergers & acquisitions group hosted a program on “Managing ESG – Environmental, Social and Governance – Considerations for Public Companies” as part of its Director Summit roundtable series. 

We welcomed ESG practitioners from PepsiCo, Oath (formerly Yahoo) and Deloitte to participate in a panel discussion moderated by New York-based Securities and Public Companies partner and leader of our global ESG and corporate social responsibility (“CSR”) practice, Michael Littenberg.  Among other things, the panel explored investors’ “E” and “S” expectations, including the latest activist trends and shareholder proposals, the role of CSR disclosure, and the role of the board of directors in ESG.

Director Summit

Meeting Investors’ “E” and “S” Expectations 

A key question facing companies is:  what do investors care about?  The past year has seen a record number of “E” and “S” shareholder proposals – coupled with more investor support – a trend that is expected to continue.  Investors are increasingly calling on companies to embed social risk management in the companies’ cultures, leading to the need for a more rigorous framework around how companies think about these risks, along with board level visibility and oversight of these matters.  Further, environmental reporting has become more granular and investors and the market are holding companies more accountable in terms of the quality of analysis and sufficiency of disclosures. 

Social Compliance Legislation Around the World 

Our panel focused on the importance of knowing how to write mandatory and voluntary CSR disclosures for investors, and data analytics providers.  The panel agreed that it is critical for companies to understand what investors are looking for and how they evaluate CSR issues.  Companies need to organize their compliance efforts with this goal in mind.  Given the increased investor focus on CSR disclosures, these disclosures should be prepared with the same level of rigor and review as other investor-facing disclosures. 

The Role of the Board in ESG 

Finally, the panelists shared their insights on how to keep boards of directors organized and focused around important ESG issues.  The panelists touched on the role of the board of directors in integrating ESG into a company’s strategy and risk management.  In today’s environment, stakeholders are more frequently making decisions about a company based on its ESG “scorecard.”  The panel concluded with an overview of ESG best practices – framing the ESG conversation with leadership, incorporating ESG into a company’s business strategy and building trust and confidence with stakeholders related to ESG matters.

For more information about our mergers & acquisitions and supply chain compliance & corporate social responsibility practices, please reach out to the attorneys highlighted in the Attorney Profiles.

Ropes & Gray