Governance News 6 April 2022

45 minute read + (PDF download) 06.04.2022 Mark Standen, Siobhan Doherty, Kate Hilder

This week's Governance News has a strong ESG focus and includes coverage of the release of the ISSB's first two draft global sustainability standards which have been released for consultation as well as a number of developments evidencing the growing pressure on companies to act on a range of ESG issues including climate risk. The issue also features coverage of various key financial services, risk and regulatory developments and more…

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CFA Institute's voluntary DEI Code gains traction with US and Canadian investors

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Top shareholder concerns in 2022? New report predicts that climate risk, HCM and political lobbying will be among the key areas of investor focus
New report predicts an uptick in majority votes on shareholder E&S proposals in 2022
'Pretending to be aligned with net-zero': Shareholder group calls on shareholders to reject management's 'say on climate' resolution at the upcoming Standard Chartered AGM
Not substantially implemented: SEC has declined Occidental's request to exclude a shareholder climate resolution ahead of the AGM
Not enough: Co-filers of shareholder climate resolution at Credit Suisse will push ahead with their resolution, despite the bank's newly announced climate commitments
US supermarket chain Kroger is under pressure over its treatment of pigs, Carl Icahn has flagged plans to push for two board seats
In Brief | Shareholder fossil fuel financing proposals to go to a vote: ICCR has issued a statement confirming that separate requests to the SEC by Citigroup, JPMorgan Chase, Morgan Stanley and Chubb to omit shareholder climate proposals calling on them to align their financing with the IEA's net zero 1.5°C scenario have been denied meaning that all the proposals will now advance to a vote
In Brief | In a letter to shareholders, activist Pershing Square has flagged a 'permanent shift away' from the 'noisiest form of activism, activist short selling' in favour of a more 'constructive' approach

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Disappointing': The latest Benchmark Assessments from Climate Action 100+ finds focus companies globally are not on track to make the progress required to align with the 1.5°C climate goal agreed in Paris

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In Brief | 'At a crossroads' on climate action: The latest IPCC report cautions that 'without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C is beyond reach'. Achieving this goal would mean global greenhouse gas emissions would need 'to peak before 2025 at the latest, and be reduced by 43% by 2030', while at the same time methane emissions would need to be reduced by one third. For context, even limiting global warming to around 2°C would still require global emissions to peak before 2025 at the latest, and be reduced by a quarter by 2030
In Brief | Out of step with the Paris Agreement? Global report finds that fossil fuel financing by the world's largest banks continues to gain pace – with USD$742 billion provided in 2021 alone - despite many banks being members of the Net-Zero Banking Alliance, and despite the individual climate pledges by the banks in question

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The ISSB has released the first two draft global sustainability standards for consultation
US regulator consults on draft climate-related risk management principles for the largest financial institutions
Consultation on proposed changes to NGER reporting requirements

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Top Story | 'Fit for purpose': PJC Report gives ASIC corporate governance framework the tick of approval
In Brief | The government has issued a new statement of expectations for the ACCC. The Treasurer said that the statement 'makes clear that the government expects the ACCC to contribute to the government’s economic goals, including supporting Australia’s economic recovery from the COVID‑19 pandemic, and to work closely with government and Treasury on the implementation of policy reforms'. The ACCC is expected to provide the a Statement of Intent in response 'in due course'
In Brief | Michele Bullock has been appointed to the position of Deputy Governor of the RBA, following the departure of Guy Debelle with immediate effect. Ms Bullock has also been appointed as a member of the Reserve Bank Board

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Top Story | Preferring substance to form in unconscionable conduct: the High Court’s recent judgment
Hayne implementation: Labor pledges to introduce a CSLR (if elected)
Modernising the regulatory architecture: APRA consults on 'minor amendments to centralise the definition of significant financial institution'
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022 has received Assent
New report flags self-reported breaches of the General Insurance Code continued to increase for a fifth consecutive year
APRA consults on proposed five year plan to transition reporting to APRA Connect, flags plans to introduce new data collections
APRA launches Phase 2 of its multi-year superannuation data collection project
Increased transparency around superannuation information for parties to family law property settlement proceedings take effect
APRA puts boards on notice that crisis preparedness should be a priority: 'If you are going to step up to the controls of one of our institutions, it is your responsibility to assure yourself that you can land it safely in the unlikely event of an emergency'
Latest quarterly statement from Council of Financial Regulators released
ASIC acts against 19 SMSF auditors
In Brief | APRA is consulting on additional draft life and general insurance reporting standards impacted by the introduction of the AASB 17. The due date for submissions is 3 June 2022

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Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022 now enacted

Contact

Mark Standen

Consultant, Sydney
- +61 2 9921 4902
- +61 412 104 902
Siobhan Doherty

Partner, Sydney
- +61 2 9921 4339
- +61 413 187 544

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Governance News 6 April 2022

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