'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

? ? ? ? ?Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)?

? ? ? ? ? ?NOTE: This is a longer than usual "catch-up" issue focused exclusively on ESG/DEI issues

? ? ? ? ? ? ? (i) chief sustainability officer of CPPIB on the ISSB climate reporting standards and the board's duty/interview with PepsiCo's chief sustainability officer/interview with the chief sustainability officer of Diego (maker of Johnnie Walker whisky and Guiness beer):?

? ? ? ? ? ? ? ? ? ?(a) Below is from this Aug. 12 FT commentary by?Richard Manley, chief sustainability officer of the Canada Pension Plan Investment Board?(CPPIB), "It’s in companies’ own interests to adopt global sustainability standards":

? ? ? ? ? ? ? ? ? ? ? ?".....In November 2021, the International Financial Reporting Standards Foundation created the International Sustainability Standards Board with a mandate to develop a global baseline for sustainability reporting. The final ISSB standards published in June last year require companies to demonstrate they are managing the most material risks confronting their businesses. Adoption of this global baseline presents an opportunity to consolidate the alphabet soup of voluntary ESG reporting frameworks currently plaguing companies......

? ? ? ? ? ? ? ? ? ? ? ?"National-level consultations on the adoption of these standards pose a dilemma for board directors. Should they advocate in favour of the ISSB, to ensure they and shareholders have disclosure of these material risks and opportunities??Or should they stand back and allow industry associations to undermine this critical disclosure framework by arguing for extended reliefs or carve-outs?......

? ? ? ? ? ? ? ? ? ? ? "Has a board discharged its duty to the company if it has not compelled management to identify the material sources of risk and opportunity at the nexus of the business? Is it acting in the long-term interest of the company if it has failed to quantify the carbon footprint of the business when it operates in jurisdictions committed to decarbonising their economy over the coming decades??Can it really be confident that its operations and supply chain will prove resilient to climate risks if an analysis of physical risks has not been done?

? ? ? ? ? ? ? ? ? ? ? "Where these risks and opportunities have not been identified, quantified and reflected in strategy and disclosures, shareholders should consider two simple questions. Is the board discharging its duty to the company? And do we have the right directors??With consultations under way, now is the time for all market participants and issuers to encourage comprehensive adoption of the global sustainability baseline. Many boards have already pushed for disclosure aligned with the ISSB’s previous standards. For any still on the fence, reporting on the two sets of standard (S1 and S2), should not be viewed as a concession to investors, but as an act of enlightened self-interest."

? ? ? ? ? ? ? ? ? (b) Jim Andrew is PepsiCo’s chief sustainability officer,?and below is a brief except from a WSJ interview with him that appeared in this July 24 article, "Work With Us on Sustainability and You’ll See Progress and Prosperity, Says PepsiCo CSO":

? ? ? ? ? ? ? ? ? ? ? ? ?"WSJ:?PepsiCo is about to release its latest sustainability report. What are the biggest challenges that the company faces in this area??

? ? ? ? ? ? ? ? ? ? ? ? ? Jim Andrew: The biggest challenge is reducing Scope 3 emissions. It’s about 94% of our total, including transportation, packaging, agriculture. It requires systemic changes. Industry and government need to work together and we aim to support a whole set of partners and suppliers. You got to have clear expectations. We have touched about 2,000 suppliers since 2021. We’ve told them we want four things: set or commit to set a science-based emissions-reduction target, share your SBT-aligned decarbonization plan and annual progress with us, report to us your Scope 1 & 2 emissions—which are part of our Scope 3—and if you are an ag supplier, what are you doing to help us build regenerative agriculture. No company can do this by themselves. It’s about collaboration and partnership to drive system change."

? ? ? ? ? ? ? ? ? ?(c) Note also this WSJ interview last Wednesday with Ewan Andrew, chief sustainability officer of one of the world’s foremost makers of alcoholic drinks (including such world-famous brands as Johnnie Walker whisky and Guinness beer),?Diego plc, "From Grain to Glass: Diageo Sustainability Chief Takes Holistic Approach to Net Zero."

? ? ? ? ? ? ? (ii) Spencer Stuart/Diligent report on corporate sustainability strategies and board oversight of ESG/Deloitte report on ESG disclosure and preparedness?

? ? ? ? ? ? ? ? ? ? ? (a) In July, Spencer Stuart and board?governance software provider Diligent released their third annual global Sustainability in the Spotlight report, "The Balancing Act of ESG", based on a survey conducted in March/24 of "800-plus board members in the U.S., U.K., and European Union" seeking their views on their companies’ sustainability strategies and board oversight. Below is from the section of the report, "Board Oversight":

? ? ? ? ? ? ? ? ? ? ? ? ? ?"A board priority: This year’s survey confirms that ESG oversight has become an established board function. Sustainability in all its forms is a significant priority for directors and, for the most part, ESG oversight is built into the structure of boards. Directors are seeking more transparency into ESG in response to regulatory demands and they are seeking out more insights to become better stewards of their organizations’ ESG efforts.?The survey respondents peg ESG as a mid-level priority to high-priority issue for most boards.?Nearly half (47%) say it is a mid-level priority and a third identify it as a high-level priority. Less than 20% of respondents say ESG is a low-priority issue for their boards......

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Oversight structures continue to develop: The majority of our respondents (62%) say that the ESG oversight structure within their boards is unchanged since 2023. Just under a third of respondents say that the oversight structure has changed in the last year. Where changes have occurred, 58% of respondents say that ESG has been assigned a larger role in board and committee discussion meetings; 29% say that a new board committee or sub-committee has been established to increase oversight; and 30% say that they have formalized ESG oversight in the board’s governing documents. All of this suggests that ESG oversight is becoming a more permanent feature in boardrooms.?

? ? ? ? ? ? ? ? ? ? ? ? ? ? "Seeking greater transparency: A large majority of boards and companies (89%) are taking action on ESG in response to regulation. Most of this action is related to transparency: 62% of respondents say their organizations are enhancing ESG disclosures, reports and filings. A substantial number of respondents report that there are also efforts to improve the board’s ability to oversee ESG. A third of respondents say that solutions enabling the board’s ability to monitor ESG are being put into place, and 30% say that directors are being educated regarding ESG issues."

? ? ? ? ? ? ? ? ? ? ? ? ? ? The Spencer Stuart/Diligent report is discussed in this July 26 Fortune article, "ESG regulations are still in limbo, but companies are already preparing for them":

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?".......ESG has become a politically charged term that’s led to a slew of anti-ESG legislation in Republican-led states and to some companies either delaying their environmental commitments or ditching them entirely.?“I know that we’ve all been reading a lot about the ESG backlash,” said Nithya Das, chief legal and administrative officer at?Diligent. “But interestingly, only 3% of companies have actually changed their ESG strategy or priorities as a result of the backlash.” Das cited further data from a recent Diligent report showing that an overwhelming 96% of directors expect a “continued or stronger” focus on ESG in the next five years......

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"And while nearly all companies remain firmly committed to ESG, 17% say they’re evolving how they’re communicating their sustainability strategies......The Diligent report also highlighted that the biggest obstacle to ESG strategy development and integration is internal competition. Nearly one out of every four board members believe that to be true at their companies.?Das said Diligent’s survey data also shows the push to integrate ESG into business strategies in a few interesting ways: 94% of board directors have integrated ESG into either their compensation plans or their strategic goals. And more than four in 10 directors say they want more clarity about how ESG connects back to the business strategy. “We’re seeing from the board level that directors are asking for tighter alignment between the ESG strategy and business strategy,” Das said."

? ? ? ? ? ? ? ? ? ? ? ? ? ?(b) Also in July, Deloitte published its "2024 Sustainability Action Report", based on a survey on ESG disclosure and preparedness of "300 executives at diverse, publicly owned companies with revenue of at least $500-million." A good summary of its findings is in this July 29 Globe and Mail article, "OMG, ESG – what 300 executives are thinking about sustainability policies":

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"There’s been a lot of chatter – and confusion – around environmental, social, and governance (ESG) over the past few years......Global professional services company Deloitte just released the "2024 Sustainability Action Report" which surveyed 300 executives at diverse, publicly owned companies with revenue of at least $500-million. Here’s what they’re thinking about ESG:

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? "Companies are investing in reporting: With the recent lineup of new sustainability reporting mandates and standards, like the U.S. Securities and Exchange Commission’s climate disclosure rule, 99 per cent of companies are preparing for increased disclosure requirements.?Additionally, 74 per cent of companies say they are likely to invest in new technology or tools to help improve their ESG disclosure capabilities.?It’s not just about mandates, though. Companies are also realizing that these investments have benefits internally, with 51 per cent saying the top three advantages are greater efficiencies, lower risk and enhanced trust with stakeholders. The top expected external benefits were brand reputation, talent attraction and higher pricing abilities.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? "Cross-functional teams to the front: This work can’t happen without people power, and the study shows companies are building that capacity in the form of cross-functional ESG working groups, and hiring for roles like chief sustainability officer and ESG controller.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? "But there’s still an issue with data quality: Even though companies are investing in their disclosure capabilities, 57 per cent say that quality is the biggest challenge with ESG data, and 88 per cent report data quality as one of the top three challenges."

? ? ? ? ? ? ? ? (iii) the ESG debate: companies talking about it less but not abandoning it/the DEI debate:?a recap of where we are today:?

? ? ? ? ? ? ? ? ? ? (a) Below are excerpts from several recent articles on how companies today are approaching ESG/sustainability: this WSJ article last Monday, "Companies Haven’t Abandoned Sustainability. They’re Just Talking About It Less"; this Corporate Counsel blog post last Wednesday, "Many Companies Steadfastly Support ESG, Despite Backlash"; this HBR post last Tuesday, "Companies Are Scaling Back Sustainability Pledges. Here’s What They Should Do Instead"; and this Reuters article last Wednesday, "BlackRock trims support for some ESG resolutions in AGM season", along with this related Forbes article on Monday with some perspective on BlackRock's reduced support for ESG proposals, "BlackRock Didn’t Pull Support Of ESG, Just ‘Poor Quality’ Shareholder Proposals":

? ? ? ? ? ? ? ? ? ? ? ? ?i) Below is from the WSJ article:

? ? ? ? ? ? ? ? ? ? ? ? ? "Companies are talking less about sustainability in earnings calls and marketing materials, but they are mentioning it nearly as frequently as ever in their financial reports and disclosures. Business leaders have faced political and legal pressure to avoid overstating green claims or appearing to prioritize sustainability initiatives over profit. Last year, a Wall Street Journal analysis found a steep dropoff in mentions of “ESG,” “DEI,” and other related terms in corporate earnings calls. But?a new analysis of hundreds of thousands of public and private companies complicates the picture. Companies’ financial disclosures are mentioning sustainability almost as much as ever,?with the trend line showing a steep climb between 2019 and 2021 before flattening out.

? ? ? ? ? ? ? ? ? ? ? ? ? "The apparent disconnect suggests that companies haven’t fully shelved their sustainability-related goals—they are just talking about them less. “We haven’t seen any real diminution in the amount of quality of reporting on sustainability,” said Julie Gorte, senior vice president for sustainable investing at Impax Asset Management.?“What you don’t see is the companies coming out and having a big marketing splash about it.” Almost all of the mentions of ESG and sustainability—roughly 97%—were related to financial disclosures and earnings reports, according to an analysis of data through Factiva, the digital research platform also owned by Dow Jones. A handful of results came from corporate announcements and board meeting transcripts.?“Everyone wants to keep their head below the lip of the fox hole politically and not be a target,” Gorte said....."

? ? ? ? ? ? ? ? ? ? ? ? ? ?ii) Below is from the Corporate Counsel blog post, with reference to the just released Corporate Counsel ?“2024 GCs and ESG Benchmark Study":?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"Companies remain committed to environmental, social and governance programs, but they are less likely to use the term “ESG” or publicly disclose?those metrics.Those were among the key findings of the newly released “2024 GCs and ESG Benchmark Study".....The study’s release comes as some high-profile companies backpedal on ESG....But the Corporate Counsel/Morrison & Foerster study, which was based on surveys with 97 in-house legal leaders conducted between February and April,?found those headline-grabbing retreats are not indicative of a wider corporate disaffection with ESG and DEI efforts......

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"At the same time, the study found that companies are taking concrete steps to reduce the likelihood that they’ll?find themselves targeted by anti-ESG activists.?Most notably,?23% of respondents said that in response to the backlash, they have adopted a “change in terminology/not using the?term ‘ESG,’” up from 15% a year earlier. That approach is even more prevalent at public companies, which tend to be more in the spotlight. Twenty-eight percent of public company respondents have adopted that strategy, up from 20% last year....."?

? ? ? ? ? ? ? ? ? ? ? ? ? ? iii) Below is the headnote summary of the HBR post by?Kenneth Pucker, the former chief operating?officer of Timberland (owned by Nasdaq-listed, lifestyle apparel company VF Corporation:?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"Summary: In the past 18 months, many companies have significantly retreated from their sustainability commitments.?High-profile examples include Tractor Supply Co.,?which eliminated jobs focused on diversity and withdrew its carbon-emissions goals, and?Canada’s major oil sands companies, which removed decarbonization goals from their websites. Nike and others have similarly reduced their sustainability efforts. This trend is largely driven by political opposition to ESG initiatives, underperformance of ESG funds, and challenges in justifying sustainability investments due to intangible benefits. To counter this retreat, companies must replace unrealistic targets with meaningful actions, rethink supplier relationships, rebalance investments considering future ecological costs, and reshape governance structures to ensure accountability and expertise in sustainability initiatives."

? ? ? ? ? ? ? ? ? ? ? ? ? ? See also this article in the Sept./Oct. Issue of the HBR Magazine, "Moving Beyond ESG", and this Aug. 14 Fortune article, "The ‘sustainability recession’ will end soon—and not by choice."

? ? ? ? ? ? ? ? ? ? ? ? iv) Below is from the Reuters article:

? ? ? ? ? ? ? ? ? ? ? ? ? ?"BlackRock, the world's biggest asset manager, cut its support for shareholder proposals linked to environmental and social issues in the most recent annual general meeting season, backing just 4%, a report on its global voting record showed.?Despite the number of environmental- and social-related proposals increasing year-on-year to 493 from 455, BlackRock said most had been rejected for much the same reasons as in previous years. In 2023 it had supported 6.7% of such proposals.

? ? ? ? ? ? ? ? ? ? ? ? ? ?"In our assessment, the majority of these (proposals) were over-reaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term shareholder value," it said in the report on Wednesday. "A significant percentage were focused on business risks that companies already had processes in place to address, making them redundant."......

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Also driving the number lower were the growing number of resolutions aimed at forcing companies to roll back their plans to manage sustainability risks, including retooling their operations to be in line with global climate goals. BlackRock said it did not support any of the 88 proposals that fell into this category.....Across the market, overall support for ESG proposals was flat at 23%, industry tracker Morningstar said, while support for environmental and social resolutions fell to 16% from 19%......"

? ? ? ? ? ? ? ? ? ? ? ? ?See also this Forbes article on Monday with some perspective on BlackRock's reduced support for ESG proposals, "BlackRock Didn’t Pull Support Of ESG, Just ‘Poor Quality’ Shareholder Proposals."

? ? ? ? ? ? ? ? ? ? ?(b) A?good recap of the DEI debate to date?is in the July 30 Fortune CFO Daily Newsletter, "As the DEI debate rages on, research keeps pointing to the business benefits"; and in the Aug. 2 Fortune CHRO Daily Newsletter, "DEI has some prominent critics—but it’s actually getting more popular, this latter one with reference to the "2024 Edelman Trust Barometer" report?released in July.?

? ? ? ? ? ? ? ? ? ? ? ? ? ?i) Below is from the Fortune CFO Daily Newsletter:?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"If you search for “DEI”—diversity, equity, and inclusion—on social media sites like LinkedIn, you’ll find no shortage of posts offering intense praise or criticism of the practice in the workplace. DEI has also permeated the political arena, leading some companies to abandon it and others to double down. While there is plenty of noisy debate, the business case for DEI has been the focus of studies for years—and the research continues to point to enhanced financial outcomes.?

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Farm equipment maker John Deere?is one of the latest companies to distance itself from DEI efforts.?The company posted on X?on July 16 that it would no longer “participate in or support external social or cultural awareness parades, festivals or events,” and will “ensure the absence of socially-motivated messages” in compliance with federal and local laws. The company added that “the existence of diversity quotas and pronoun identification have never been and are not company policy. John Deere also ended an array?of its corporate diversity and climate efforts.?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"Meanwhile, JPMorgan Chase CEO Jamie Dimon affirmed the bank isn’t retreating from its diversity efforts despite the?“ridiculous ESG, DEI groups coming at us,” he said in January at an event hosted by the Female Quotient at the World Economic Forum, Fortune’s Ruth Umoh reported. “I’m going to start by telling you that I’m a full-throated, red-blooded, patriotic, unwoke, capitalist CEO,” Dimon said......

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Major organizations are also weighing in. Fortune’s Emma Burleigh recently reported in CHRO Daily that the Society of Human Resource Management (SHRM), the world’s largest human resources group announced that it would be dropping “Equity” from its approach to “Inclusion, Equity and Diversity.”?SHRM wrote in a?LinkedIn post?on July 9: “By emphasizing Inclusion-first, we aim to address the current shortcomings of DE&I programs, which have led to societal backlash and increasing polarization.” Burleigh noted the reaction from many HR practitioners was “swift and furious.”

? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"But as some grapple with whether dropping the “E” in DEI will make it more acceptable, there are many business leaders who still see the practice as essential.?A report by Workday?released in February is based on a survey of 2,600 global business leaders, such as CEOs and leaders from HR, finance, IT, and sales. Seventy-eight percent say the importance of DEI increased in the past 12 months, with 85% stating they have a budget for DEI initiatives—an increase of 11% compared to last year's survey. Some of the top reasons for supporting DEI:?positively impacting business success and results (39%); improved employee engagement (40%); staff well-being (41%); and attracting and recruiting a diverse workforce (43%).

? ? ? ? ? ? ? ? ? ? ? ? ? "Regarding consumers, 75% say that diversity and inclusion—or a lack thereof—influence their purchase decisions,?according to a July 16 report by Kantar, a London-based marketing data and analytics firm. Kantar’s Brand Inclusion Index 2024, released this month, is based on a survey of more than 23,000 people in 18 countries. And inclusion is what many employees want......."

? ? ? ? ? ? ? ? ? ? ? ? ? ? Related to the above, note the following articles:?

? ? ? ? ? ? ? ? ? ? ? ? ? ? – this Business Insider article last Tuesday, "Companies from Harley-Davidson to John Deere are backing down on DEI";?

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- this Reuters article today, "US companies tweak diversity policies as challenges mount";

? ? ? ? ? ? ? ? ? ? ? ? ? ?– this Aug. 3 WSJ article, "The Activist Pushing Companies to Ditch Their Diversity Policies", discussing the activist Robby Starbuck who was behind the campaigns to scrap the DEI programs at Tractor Supply and Deere, and Harley-Davidson (For a refutation of Robby Starbuck's negative views on DEI, and characterizing his views as "based on a fallacy", see this Bloomberg article last Wednesday, "DEI Has a New Nemesis — And He’s Good at His Job";?

? ? ? ? ? ? ? ? ? ? ? ? ? ? – in particular with respect to the decision of the SHRM to drop the "E" from "DEI", this Aug. 6 HBR post, "Why Dropping the E in DEI Is a Mistake";?

? ? ? ? ? ? ? ? ? ? ? ? ? ? – with respect to the attack on DEI at Harley-Davidson: this Aug. 8 Bloomberg article, "Broad Customer Base or Woke Agenda: Harley Wrestles With Anti-DEI Attack"; this WSJ article last Monday, "Harley-Davidson Changes DEI Policy Following Activist Pressure", with a link to the company's statement; this other Bloomberg article last Monday, "Harley-Davidson Drops Diversity Efforts After Attacks by Anti-DEI Activist"?(see iii) below for more on this); and this FT article last Friday, "The Harley-Davidson boss caught in an ‘anti-woke’ squall";

? ? ? ? ? ? ? ? ? ? ? ? ? ? – this Aug. 14 WSJ article, "Diversity vs. Merit: You Agree More Than You Think", a follow-up to the July 25 WSJ article, "Merit, Excellence and Intelligence: An Anti-DEI Approach Catches On" (see item (iv)(a) from July25/24);?

? ? ? ? ? ? ? ? ? ? ? ? ? ?-- this Aug. 11 Bloomberg article, "For Anti-DEI Groups Swarming Annual Meetings, Even a Loss Is a Win, which notes that:??"There were 42 proposals filed this year by prominent conservative investors that are considered anti-DEI, compared with just one in 2021, according to data compiled by Bloomberg. Although they make up more than a third of the resolutions related to social issues filed in 2024,?overall support for anti-DEI resolutions averaged 2% this year — a fraction of the 18.5% backing for pro-DEI proposals...."? ?

? ? ? ? ? ? ? ? ? ? ? ? ? – this Bloomberg article last Thursday regarding NYSE-listed, spirits and wind company Brown-Forman Corp. (maker of Jack Daniel’s whiskey): ?

? ? ? ? ? ? ? ? ? ? ? ? ? ? "Jack Daniel’s whiskey maker Brown-Forman Corp.?became the latest company to scrap corporate diversity, equity and inclusion programs as pressure?increasingly grows from conservatives to shed diversity programs or face a public backlash. The company sent a letter to employees on Wednesday informing them that Brown-Forman was going to stop linking executive compensation to progress on DEI. The company said it will also end its participation in an annual ranking of companies with an LGBTQ-friendly work environment. The Kentucky-based business will also scrap plans to push for more suppliers from a minority background,?according to a copy of the letter shared on X by anti-DEI activist Robby Starbuck and confirmed by Brown-Forman......"

? ? ? ? ? ? ? ? ? ? ? ? ?-- and this Bloomberg article yesterday, "Lowe’s Scraps Some DEI Policies as Activist Claims a New Win":

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Lowe's Cos. is scaling back its diversity, equity and inclusion programs,?the latest American company to end such initiatives following a series of activists attacks on firms that promote DEI. The home-improvement retailer will no longer participate in surveys for LGBTQ advocacy group the Human Rights Campaign, and will also combine its various business resource groups that represent diverse employees into one umbrella organization,?it said in an internal note. It’ll also focus on sponsoring events related to safe and affordable housing, disaster relief and skilled trades education, and will not participate in community events outside of this remit, according to the note, which was seen by Bloomberg News and confirmed by a Lowe’s spokesman......"

? ? ? ? ? ? ? ? ? ? ? ? ? ? The policy changes were disclosed in an internal email by the Lowe's executive team, as reported in this TheStreet blog post today, "Lowe’s cuts back major policies amid low sales":

? ? ? ? ? ? ? ? ? ? ? ? ? ? "Like many other companies, in July 2023, after the Supreme Court's decision in the Harvard/UNC cases, we began reviewing our diversity and inclusion programs to ensure they are lawful and aligned with our commitment to include everyone in the incredible opportunities here at Lowe's and ensure that no one is excluded.....We made some changes to our programs so they can more effectively further this commitment.....As you know, over the past few years, we have been narrowing our community and philanthropic areas of focus to strategically align with our business, with a concentration in three areas: safe and affordable housing/community improvement, disaster relief, and skilled trades education......As a result, Lowe’s will focus on events that have the biggest impact to these three areas. We will not sponsor and participate in community events that are outside of the scope, such as festivals, parades, and fairs.”

? ? ? ? ? ? ? ? ? ? ? ii) Below is from the Fortune CHRO Daily Newsletter, inter alia quoting Trisch Smith, global chief diversity, equity & inclusion officer at PR and marketing consulting firm, Edelman:

? ? ? ? ? ? ? ? ? ? ? ? ? "DEI has shot to fame over the past few years......A vocal group of powerful people are dead set against the practice, and the headline-grabbing backlash is undeniable.?But?a new report shows that when it comes down to it, DEI—short for diversity, equity, and inclusion—is actually pretty popular among workers, and approval rates are on the rise.?

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Demand for DEI programs among workers is up 9% since 2022, to 60% of people overall, the same percentage it was in 2020, according to Edelman's 2024 Trust Barometer report on business and racial justice released in July.....And the number of workers who view DEI initiatives as “more positive” has doubled to 38% over the past three to five years. The uptick in favorability is also widespread—increases are seen across race, gender, and socioeconomic lines.?

? ? ? ? ? ? ? ? ? ? ? ? ? "So how can we make sense of this contrast between a backlash against DEI in theory, and an embrace of it in practice??“I think that there is a very loud minority, and this in terms of the efficacy, the importance of the benefit of the DEI programming,” says Trisch Smith, global chief diversity, equity & inclusion officer at Edelman,?a PR and marketing consulting firm. “This research does show us that there is an employee demand for diversity programs.”?Among workers with an employer that had more DEI initiatives, employees reported an increased sense of belonging compared to workers with an employer that had fewer initiatives......There is shared understanding and recognition of the benefit of this work to individuals across various demographics,” says Smith. “That it’s not only a select few, or certain communities who are in support of the work.”......

? ? ? ? ? ? ? ? ? ? ? ? ? "When DEI programs are challenged by critics, the Edelman report recommends addressing the criticism head on, inviting meaningful dialogue, and creating platforms to encourage employees to speak up. Using “plain language” is also key. That can even be simple things, like using the phrase “diversity, equity, and inclusion” rather than just “DEI.” “It can be at all hands, it can be email here for questions,” says Smith.?“We’ve also seen organizations providing the proper tools to help their managers have the conversations, even on a one-on-one basis or within their teams. So it’s also not necessarily solely CEO, but also at more again, the local level, if you will, within your team within your department.”

? ? ? ? ? ? ? ? ? ? iii) Below is from last Tuesday's Fortune CEO Daily Newsletter, "Woke’ Harley-Davidson ditches DEI, folding to right-wing pressure":

? ? ? ? ? ? ? ? ? ? ? ? ".....On Monday, Harley-Davidson posted a statement on X?to tell the world that it’s backing away from policies like “supplier diversity spend goals” to “better align” with its customers......Are brands like Harley really turning their backs on diversity or, as several CEOs have told me, deciding to stop talking about it??Harley distanced itself from DEI on a social media site where it had faced much of the ‘anti-woke’ wrath.?On the Harley website, there was language about inclusion but no statement like the one posted on X......

? ? ? ? ? ? ? ? ? ? ? ?"Diversity is good for business. Angry customers are not. Those who dislike companies pushing DEI policies are not all right-wing extremists or racist, any more than those who push companies to take a stance on DEI are all left-wing extremists or doctrinaire.....The question is how to deal with it.?For investors, betting against companies taking action on social issues has proven to be a losing strategy, according to a recent Yale study......"

? ? ? ? ? ? (iv) ESG/sustainability reporting: an update and some commentary by prominent Canadian issuers on the coming sustainability reporting requirements in Canada/Conference Board guides on the ISSB standards and 'double materiality' assessments/ Nasdaq guide for boards and C-suite on sustainability disclosure:?

? ? ? ? ? ? ? ? ? ? (a) Below is from this July 31 Globe and Mail article on the coming sustainability reporting requirements in Canada, inter alia with some commentary by Enbridge, Barrick Gold?and CPPIB, "Investors support proposed Canadian sustainability disclosures, but companies are pushing back":

? ? ? ? ? ? ? ? ? ? ? ? ?".......The Canadian Sustainability Standards Board?is poring over 169 responses to its call for input into plans to adopt international rules for sustainability and climate-related reporting. The feedback shows a stark divide between investors such as pension funds and asset managers demanding detailed comparable data and companies that say some factors are still too uncertain and implementation too burdensome......

? ? ? ? ? ? ? ? ? ? ? ? "The CSSB suggested in its draft delaying the implementation of Scope 3 reporting by two reporting periods after the standards are in force......Canada Pension Plan Investment Board, the country’s largest institutional investor, said it is open to the idea of a transition period,?and the prospect of “safe-harbour” disclaimers for companies. “However, we strongly encourage issuers to not unduly delay the measurement and reporting of Scope 3 emissions, as we view it as important to understand indirect?climate change?risk across the entire value chain and not just those directly impacting the business,” CPPIB said in its response.......

?

? ? ? ? ? ? ? ? ? ? ? ? "CSSB....released its draft standards in March, and invited public comment. The Canadian Securities Administrators, the umbrella group for provincial securities commissions, has said it will examine the CSSB’s work before deciding on moving to mandatory sustainability reporting. “The board is in analysis and decision-making mode now, and the aim is to make final decisions this fall,” Lisa French, vice-president of sustainability standards for Financial Reporting and Assurance Standards Canada, the umbrella organization for standard setting, said in an e-mail. “Final decisions are closely followed by the issuance of final standards.”?Ms. French declined to comment on the responses or whether the CSSB’s final standards will differ materially from the draft versions, saying it will make its work public through summaries of meetings and how it came to its conclusions later........

? ? ? ? ? ? ? ? ? ? ? ?"Another contrast concerns conducting scenario analysis – gauging impact of climate risk over a range of potential possibilities. Enbridge Inc., the pipeline and utility company, said it wants scenario analysis removed from the standard. The practice, like Scope 3 measurement, suffers from “a lack of standardized assumptions, methodologies and timeframes”?for such things as predicting future financial resources to deal with climate-related effects and other uncertain data,?Enbridge said.

? ? ? ? ? ? ? ? ? ? ? "Several companies pushed back against a proposal to report material climate- and sustainability-related data in conjunction with annual financial statements, with some arguing it would add to an already-heavy reporting burden at year-end......Barrick Gold Corp. said it compiles much of the data for its sustainability report in the first half of the year for publication in June, and that the most up-to-date details would not align with year-end disclosure.?“Forcing these disclosures to be made concurrently risks compromising the quality of the sustainability disclosures and requiring disclosure in an integrated fashion risks burdening users of financial statements with information they do not deem material and/or relevant to their decision making,” Barrick said......"

? ? ? ? ? ? ? ? ? ? (b) On Aug. 16, the Conference Board?published this report, “Cutting Through Complexity–Managing International ESG Disclosure", offering "practical steps to stay abreast of and prepare for compliance with various international ESG disclosure regimes." Accompanying the report are?these three guides which provide "the latest updates on both the International Sustainability Standards Board (ISSB) standards and the Corporate Sustainability Reporting Directive (CSRD), along with additional information on the CSRD’s double materiality assessment":

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? – Guide 1:?ISSB Standards

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? – Guide 2: Corporate Sustainability Reporting Directive?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? – Guide 3: Double Materiality Assessment

? ? ? ? ? ? ? ? ? ? ? ? This is how Guide 3 describes the concept of "double materiality":

? ? ? ? ? ? ? ? ? ? ? ? "Double materiality is a concept that recognizes that two perspectives need to be considered to determine what sustainability issues or information are considered material (important) and should be included in a company’s sustainability report......(D)ouble materiality expands the traditional view of materiality, which only addresses financial impacts, to include the company’s impact on the environment and society. Double materiality does not mean that an issue must have both a financial and an environmental/social impact. An issue can be considered material if it meets either criterion or both."

? ? ? ? ? ? ? ? ? ? ? As regards "double materiality" in Canadian sustainability reporting, note that according to "Millani’s 7th Annual ESG Disclosure Study: A Canadian Perspective" published by Canadian ESG advisory firm Millani?last October (see item (ii)(b) from Oct.17/23):

? ? ? ? ? ? ? ? ? ? ? "Another trend is the growth of?double materiality?assessments in Canada, where companies consider both financial materiality and their impact on society and the environment.?"One of the most important areas of development is the evolution from single to?double materiality,"?says Craig (Milla Craig, Millani president and CEO). "Although the ISSB doesn’t specifically ask for this assessment, issuers in Canada are already advancing: 19 percent of materiality assessments currently take a?double materiality?approach, even though 54 percent of issuers are not calling it as such."

? ? ? ? ? ? ? ? ? ?(c) Nasdaq published last week this guide, "Navigating the Sustainability Disclosure Conundrum: A Practical Guide for Boards & Leaders." Note in particular the table on p.3, a comprehensive list of ESG "Reporting Standards and Frameworks", and p.4 a comprehensive list of all ESG raters.

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