As the annual year-end reporting and proxy season approaches, we at Mintz are starting to work with our clients on effective ways to communicate a variety of different things using those disclosure documents, including progress in fulfilling ESG goals. ESG is increasingly being cited by institutional investors as a factor of critical importance to them in investment decisions. While many companies are making great strides in accomplishing their ESG goals, companies can find it challenging to communicate exactly what it is they have accomplished in this area, given all of the many frameworks and measuring sticks that are available.
The National Association for Corporate Directors has just published a useful guide illustrating ways in which ESG accomplishments can be highlighted in company proxy statements. Before the crush of the proxy season begins in earnest, we recommend taking some time to consider whether some of these suggestions would be useful to your shareholders.
Practitioners in Mintz's ESG practice group, including myself, can help companies with the application and implementation of these disclosure principles.
These examples of ESG disclosures are meant to showcase the various ways in which a company can describe its ESG accomplishments in its proxy statement. NACD has looked across the Russell 3000 Index companies using data provided by Multidimensional Public Company Intelligence to identify companies with ESG disclosure practices in six main categories: 1. Board Oversight and Activities 2. Board Skills 3. Corporate Governance Highlights 4. Letter From the Chair to Shareholders or Stakeholders 5. ESG Accountability Structure 6. Shareholder Engagement Around Environmental and Social Issues
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