2024: A Turning Point for ESG Engagement?
In 2024, companies are radically changing how they approach environmental, social, and governance (ESG) issues.
Climate change is now seen as a major business risk, rather than a distant threat. Due to this pressing issue, an increasing number of corporations (76.2% of the largest U.S. companies in 2023) are including climate change in their financial filings.
New Regulations Drive Reporting Transparency
Regulatory bodies worldwide are implementing stricter ESG reporting requirements. The U.S. Securities and Exchange Commission's (SEC) climate rule mandates companies to disclose material climate risks and mitigation strategies.
Similarly, the EU's Corporate Sustainability Reporting Directive (CSRD) enforces "double materiality" reporting, requiring companies to disclose environmental and social impact alongside financial performance.
Beyond Climate: Nature Takes the Spotlight
While climate reporting takes centre stage, a new area of environmental focus is emerging: nature. Organisations like the UN are pushing for disclosures around biodiversity and land degradation. While climate proposals garnered slightly higher support in 2023, nature-related proposals are gaining traction, indicating growing investor interest in this area.
The Rise of Labour Activism
The "S" in ESG is also gaining momentum. Social campaigns in the U.S. doubled in the first quarter of 2024 compared to environmental campaigns. Notably, labour unions are playing a more prominent role, driving campaigns for worker rights and freedoms. This trend is expected to continue, with unions potentially influencing board composition and company policies.
Stay Ahead of the Curve
To navigate this evolving ESG landscape, companies need to stay informed. Download Diligent Market Intelligence's (DMI) special report, "ESG Engagements in 2024."
Discover an extensive network of ESG providers here
Source: Diligent
