The Lexpert Special Editions profiles selected Lexpert-ranked lawyers whose focus is in Corporate, Infrastructure, Energy and Litigation law and relevant practices. It also includes feature articles on legal aspects of Canadian business issues.
Issue link: https://digital.carswellmedia.com/i/1518994
16 www.lexpert.ca Feature "IT'S JUST BEEN SO POLITICIZED" Rima Ramchandani TORYS LLP where we can certainly do better. But we have seen some progress." e Form 58-101F1 Corporate Governance Disclosure of National Instrument 58-101 Disclosure of Corporate Governance Practices requires all issuers listed on the Toronto Stock Exchange (TSX) to disclose annually the number and percentage of women on boards and in executive officer roles and targets for that number or percentage, among other things. ere was a three percent rise in total board seats occupied by women, according to the Year 9 Report of the CSA's review of disclosure concerning female representation on boards and in executive officer positions, released in late 2023. eir representation went from 24 percent of total board seats to 27 percent. Women assumed 43 percent of new board vacancies, and eight percent of the board chairs were women, a one percent increase from 2022. Only five percent of the companies had a female CEO, and 17 percent had a female CFO. Mandatory climate-related disclosures are also on the horizon. On June 26, the International Sustainability Standards Board (ISSB) released two sustainability disclosure standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. e Canadian Sustainability Standards Board, which works to advance the adoption of sustainability disclosure standards, recently launched a consultation to develop a revised CSA rule concerning climate-related disclosure requirements. Raman says everyone has been in a "holding pattern" waiting for the US Securities and Exchange Commission to develop climate-reporting rules. ey were released on March 6, aer Lexpert inter- viewed Raman for this article. "Once the SEC has its disclosure rule, the CSA will look at it and likely come up with its own rules as well," he says. "Both on the 'S' side and the 'E' side… we're going to have real requirements that are going to kick in." Some companies have long been disclosing sustainability information – especially larger ones – and they will be well situated when the rules come into place, says Bains. He says others will be less prepared but will develop internal processes, infrastructure, and controls once sustainability information disclosure becomes a regulatory requirement. "We did see a number of issuers a step ahead of the curve and already provide disclo- sure that would be similar to what would be required in a mandatory situation." Aer years of public companies and other organizations touting their bona fide ESG activities to please customers and attract investment, a backlash is emerging. Investment vehicles known as anti-ESG or traditional funds specifically exclude ESG criteria from decision-making processes. According to KnowESG, an "integrated sustainability data hub," anti-ESG funds have grown in popularity in recent years. e objec- tive of these funds is to maximize financial returns. ey are skeptical of ESG's purported benefits and believe that exclusively consid- ering financial metrics is better aligned with their objective. According to research released last June from Morningstar, there are 27 funds with an anti-ESG agenda. e anti-ESG movement is more preva- lent in the political sphere than in the board- room. Between January and June of 2023, US lawmakers introduced 165 bills and resolutions against ESG criteria in 37 states, according to S&P Global Market Intelligence. e proposed laws involve measures such as banning state pensions from considering ESG and investing in funds deemed discriminatory against the oil and gas industry. "at is a pretty dominant and continuing to be dominant theme," says Rima Ramchandani, co-head of the capital markets practice at Torys LLP. "It really puts a lot of companies in a difficult position." e anti-ESG movement is primarily a US trend. But it means many companies are being tugged in different directions, she says. On one side, some advocates and stakeholders are pushing them to go further with net-zero FIGHTING AGAINST FORCED LABOUR AND CHILD LABOUR IN SUPPLY CHAINS ACT • Requires companies to report annually on the actions they have taken to prevent forced- or child- labour use in their supply chains • Applies to private-sector organizations listed on a Canadian stock exchange or who have a nexus to Canada because they have Canadian assets, a place of business, or are doing business in Canada • Applies to private companies with at least two of three factors: $20 million in assets, $40 million in revenue, or 250 employees