As environmental, social and governance (ESG) matters continue to be the focus of companies, regulators, investigators and other stakeholders for businesses, Bass, Berry & Sims attorney Sehrish Siddiqui authored an article for ACC Docket alongside Stefanie Holland, Deputy General Counsel at Albemarle Corporation, outlining key steps for effective ESG oversight.
"Effective oversight by boards and management over ESG-related matters have simultaneously become the subject of increasing scrutiny," the authors wrote, citing greenwashing lawsuits related to fraudulent environmental claims, updated listing standards from Nasdaq related to diversity standards and disclosures, and enforcement actions taken by the U.S. SEC Climate and ESG Task Force.
Sehrish and Stefanie highlighted three key areas for corporate boards and three key areas for management to consider in their oversight of ESG-related matters.
For corporate boards, the attorneys suggested:
- Training of board members in the relevant ESG areas.
- Clear delineation of ESG oversight responsibilities among board members or committees.
- Reliable communication mechanisms with management.
For management, the authors suggested that leaders prioritize ESG-related goals, progress and disclosures by ensuring the following areas are present:
- Appropriate ESG expertise and training.
- Qualified personnel to manage ESG-related matters in sufficient numbers.
- Cross-departmental coordination for ESG-related goals and disclosures.
The full article, " Six Steps for Effective ESG Oversight," was published in September 2023 by ACC Docket and is available online.
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