Governance News 20 March 2024

45 minute read (PDF download) 20.03.2024 Mark Standen, Siobhan Doherty, Kate Hilder

This week has a strong ESG focus. A new report confirms nature and AI are firming up as emerging areas of focus in shareholder proposals filed so far this year and the latest in a string of landmark legal opinions concludes that directors have an existing duty under UK law to consider nature risk. On the financial services front, we provide break down the regulator's latest FAR information pack, we cover the Federal Court's decision in Australian Securities and Investments Commission v R M Capital Pty Ltd [2024] FCA 151 - the first case to consider the proper construction of the obligation under 963F of the Corporations Act 2001 (Cth) for AFS licensees to 'take reasonable steps to ensure that representatives of the licensee do not accept conflicted remuneration' and more…

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Landmark legal opinion concludes that UK Directors have an existing duty to consider nature risk

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Paid Parental Leave Amendment (More Support for Working Families) Bill 2023 has passed both Houses
'Sexism in the City' report concludes workplace bullying/sexual harassment is still rife in financial services
In Brief | Racial and Gender Pay 'scorecard' ranking the 128 largest US companies on pay transparency highlights a trend towards increased disclosure – over half (52%) of companies in the sample report some kind of quantitative pay gap disclosure (a near 12x increase on 2016)

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2024 proxy season: AI and nature highlighted as emerging areas of focus across the 525 ESG shareholder proposals filed so far this year
Follow This urges shareholders to back its Scope 3 proposal at Shell ahead of upcoming vote
Green Century claims credit for home improvement retailer's decision to disclose additional customer emissions information
SOC backs down on board change at Starbucks ahead of meeting

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ICGN publishes a guide to engagement on AI for investors

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Call for policy certainty on nature | ShareAction urges UK government to mandate TNFD disclosure
NZBA updates guidelines to bring banks' capital markets activities within scope of the targets
Bank of England urged to reprioritise climate
In Brief | Edging closer: EU member states have reached agreement to progress a compromise version of the CSDDD which would establish a corporate due diligence duty, mandating operational/supply chain oversight for in-scope entities

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ASX opens consultation on proposed CHESS replacement solution implementation plan

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Mandatory climate disclosure | ASIC issues update for SMEs, encourages SMEs to review greenwashing guidance before making sustainability claims
Mandatory sustainability disclosure | Canada releases ISSB-aligned draft standards for consultation
In Brief | SEC climate disclosure rule update: US Court grants Liberty Energy Inc. and Nomad Proppant Services' application for an 'administrative stay' on SEC's newly finalised climate disclosure rule
AI-washing enforcement action: SEC settles charges against two investment advisers who claimed to be using AI (when they were not)

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Top Story | FAR implementation: Regulators release cross industry guidance, set expectations around FAR preparation for the insurance and super sectors
Top Story | 'Reasonable' rehashed: Judicial clarity on a licensee's obligation to take 'reasonable steps'
Status update: Bill proposes to legislate an 'objective' for superannuation
ASIC welcomes 'high level of compliance' with new IDR reporting requirements
APRA urges insurers to 'think seriously' about how they can improve communication with consumers (especially around the actions consumers could take to help mitigate their risks and reduce their insurance premiums)

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Top Story | Release of the Final Report of the Aged Care Taskforce
Tackling online scams | National Anti-Scam Centre says losses to scams fell significantly in Q4 2023, Assistant Treasurer says 'scammer crackdown' is working
In Brief | Responsible use of AI: European Parliament approves legislation to regulate AI use across the EU
Status update | Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 receives Assent