Governance News 25 January 2023

45 minute read (PDF Download)  25.01.2023 Mark Standen, Siobhan Doherty, Kate Hilder

Our first issue of Governance News for 2023 has a strong ESG focus.  On the disclosure front, the ISSB (which is tasked with developing global baseline sustainability/climate reporting standards) expects to issue the first two finalised standards, currently in development, in June 2023. 

In Australia, ASIC continues to take action to address greenwashing concerns.  Companies are also facing a renewed wave of shareholder ESG resolutions on a range of issues heading into 2023 – we cover some of the stand outs.  On the financial services front we provide a status update on the Financial Accountability Regime as well as coverage of the government's four priorities for financial system reform and more…

Full coverage of this weeks content is now available. Past issues are available


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Boards and Directors  Navigation Show below Hide below

  • Director ID: ATO to take a 'reasonable approach to directors who try to do the right thing'

Diversity Navigation Show below Hide below

  • Gender diversity: AICD report highlights that despite overall progress, women remain underrepresented in Chair roles
  • Gender diversity: Canadian regular highlights that certain measures, including gender targets tend to be linked to higher numbers of women in leadership roles

Shareholder Activism Navigation Show below Hide below

  • Global report finds Australian companies were the third most targeted by shareholder activists in 2022
  • Global report finds shareholder activism globally has bounced back to pre-pandemic levels
  • ACCR names 'streamlined list' of companies it plans to engage with this year
  • Apple successful in its bid to block shareholder 'return to office' proposals
  • Oil companies Shell, BP, Chevron, ExxonMobil set to face shareholder Scope 3 resolutions again in 2023
  • Glencore targeted with shareholder thermal coal production resolution ahead of 2023 'say on climate' vote
  • Insurers targeted over fossil fuel underwriting: Green Century refiles resolutions at Chubb, the Hartford and Travelers
  • Animal welfare: McDonalds targeted with shareholder proposal calling on the company to go further to address the overuse of antibiotics in its beef supply chain
  • Animal welfare: Green Century has withdrawn its shareholder proposal at Jack in the Box after the company agrees to cease use of 'gestation crates' by 2026
  • Investors reject shareholder fossil fuel resolutions filed at Australian big banks
  • Microsoft shareholders reject all six shareholder ESG resolutions at annual meeting

Institutional Shareholders and Stewardship Navigation Show below Hide below

  • ShareAction report confirms largest asset managers backed significantly fewer shareholder ESG proposals in 2022 than they did in 2021
  • Failing to hold directors to account on climate: Majority Action report finds Climate Action 100+'s largest investor signatories are rubber stamping director elections
  • BlackRock does 'not anticipate material changes in our voting' in 2023
  • In Brief | NBIM releases new Climate Action plan, puts firms on notice that it will 'sharpen…engagement with companies by asking for science-based short-term, medium-term and 2050 net zero targets and credible transition plans covering scope 1, scope 2 and material scope 3 emissions, and improved disclosures on performance'
  • In Brief | The Australian Council of Superannuation Investors has released a paper outlining the risks associated with an 'unjust transition' from an investor standpoint and setting out investor expectations of companies in this context. Among other things, ACSI expects companies to 'advocate for a just transition. This extends to the industry associations of which a company is a member'

ESG  Navigation Show below Hide below

  • Top Story | Chubb review quells integrity concerns and Safeguard Mechanism gets a revamp
  • Top Story | The hidden transfer pricing risks of your global ESG strategy
  • Republican-led anti-ESG backlash in the US continues to build
  • Cost of anti-ESG backlash: Report finds the introduction of Texas-like ESG boycott legislation would cost taxpayers millions in excess payments
  • US Federal Reserve releases additional detail about pilot climate scenario analysis exercise to be undertaken with the six largest US banks
  • UK financial regulator appoints ESG advisory committee
  • In Brief | Addressing the problem of 'transferred emissions': Ceres and the Environmental Defense Fund have released joint climate-related guidance for oil and gas companies entering merger and acquisition transactions to help ensure that seller's existing climate commitments are maintained by buyers of assets after a change in ownership
  • In Brief | Treasury is consulting on proposals to transfer administration of four unique DGR categories including the Register of Environmental Organisations (which is currently administered by the Department of Climate Change, Energy, the Environment and Water) from portfolio agencies to the Australian Tax Office, consistent with the approach to administration of the 48 other DGR general categories. The due date for submissions is 19 February 2023

Disclosure and Reporting Navigation Show below Hide below

  • Top Story | Navigating the rising tide of greenwashing
  • Greenwashing: Eleven infringement notices against four companies issued by ASIC since October 2022
  • Global sustainability disclosure standards update: Draft standards expected to be issued in June 2023, ISSB to issue guidance and reliefs to support entities in measuring/disclosing Scope 3 emissions
  • In Brief | ASIC enforcement of continuous disclosure obligations: The Federal Court has directed Australian Mines Ltd to pay $450,000 penalty for breach of its continuous disclosure obligations and separately, Midway Ltd has paid a $33,000 infringement notice penalty for an alleged continuous disclosure breach

Regulators Navigation Show below Hide below

  • New regulations will give regulators the option of holding virtual, hybrid or physical hearings/examinations at their discretion
  • ASIC Commissioner Sean Hughes to depart ASIC next month
  • In Brief | Incentivising cooperation: US Assistant Attorney General Kenneth Polite has given a speech announcing 'significant changes' to the US Department of Justice Criminal Division’s Corporate Enforcement Policy. The primary aim is to give companies additional 'concrete incentives' to voluntarily self-disclose misconduct and make clear the risks for companies who elect not to do so

Financial Services Navigation Show below Hide below

  • Top Story | Government consults on its plan to transform payments system
  • Top Story | Early cracks in the 'Crypto Winter': Will regulation beat the chill?
  • Modernising Australia's financial system: Government flags four priorities for 2023
  • Financial Accountability Regime: Status update
  • Financial adviser registration delayed to 1 July 2023
  • BCCC seeks feedback on 2023-24 priorities
  • SACC Bill receives Assent
  • In Brief | DDO enforcement: The number of interim stop orders issued by ASIC has increased to 22 with the latest placed on the Pivotal Diversified Fund. ASIC has reiterated that it has targeted surveillances underway to monitor DDO compliance and stands ready to take action where non-compliance is identified
  • In Brief | APRA considers that though there are some positive indicators, the individual disability income insurance (IDII) market has 'some way to go' before it can be concluded that it has returned to a 'sustainable state'. In light of this, APRA has underlined the need for industry to IDII remain 'disciplined with its product design and pricing to strike the right balance between sustainability and profitability'
  • In Brief | The Financial Advisers Register will display whether financial advisers can provide tax (financial ) advice services from 1 February 2023
  • In Brief | Treasury has released a consultation paper setting out two proposals aimed at closing a loop hole that enables sex abuse offenders to shield their assets in the superannuation system. Broadly, the proposals would enable victim/survivors of child sex abuse to access offenders' superannuation to satisfy an unpaid compensation order. The closing date for submissions is 16 February 2022

Other News Navigation Show below Hide below

  • Top Story | The [email protected] Act is now law
  • AAT to be replaced with new federal administrative review body, legislation to establish the new body expected to be introduced this year

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