As was the case with Jones Day’s preceding post in its Governance Perspectives series, which we reported on last week (see “Board Committee Refresh”), the observations and advice imparted by the firm’s new post: “Getting Ahead of 2022 Proxy Season: Sustainability” are just as relevant without regard to the proxy season or an upcoming annual shareholder meeting. In view of the focus on corporate sustainability and the fact that this topic generally has become a defining issue for many investors, even those companies that have prioritized sustainability for years need to ensure that their public disclosures and communications make clear how the board oversees sustainability, company-specific sustainability priorities and practices, and the integration of sustainability into the corporate strategy.
The firm advises companies to align internally on the meaning of sustainability and its relation to corporate strategy; formalize board oversight either with a committee or at the full board level in the way that makes the most sense for the company; and communicate (in a disciplined manner) the company’s sustainability strategy via multiple mediums, e.g., sustainability report, Form 10-K, proxy statement, website.
The overarching theme is that while each company’s circumstances that influence its determinations about board oversight structure and sustainability strategy differ (i.e., there is no one-size-fits-all approach), the key is to move forward now in a way that lets investors and other stakeholders know that the company is attuned to investor interests and has a well-considered approach that is aligned with its corporate strategy.
See last week’s report: “ESG Disclosure Practices ‘Hygiene’“ and this Society/Gibson Dunn & Crutcher publication: “ESG Legal Update: What Corporate Governance & ESG Professionals Need to Know.”
This post first appeared in the weekly Society Alert!