A New Era in Reporting: Empowering Board Members with IFRS Sustainability Standards

By Helle Bank Jorgensen, CEO of Competent Boards

As we enter summer, an extraordinary shift is taking place in the realm of corporate sustainability. A momentous occasion occurred on Monday, June 26th, marking a significant milestone in our journey towards a more sustainable and resilient economy. The International Sustainability Standards Board (ISSB), an independent entity operating under the esteemed IFRS Foundation, has introduced its groundbreaking inaugural standards: the IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2: Climate-related Disclosures. These transformative standards, set to come into effect on January 1, 2024, are poised to revolutionize the complex landscape of sustainability reporting, rendering it more accessible for businesses and analysts alike.

This unveiling of the IFRS Sustainability Standards is akin to the birth of a new language—one that distills intricate concepts into actionable insights. Are we standing on the precipice of a game-changer? All signs point to a resounding yes.

Imagine a shared vocabulary that empowers stakeholders to discern, compare, and evaluate companies uniformly, presenting a transparent and cohesive view of the corporate sustainability panorama. This is precisely the promise encapsulated by these pioneering standards.

95% Execs and Directors Say Sustainability Key to Shaping Future Boardrooms

By Helle Bank Jorgensen, CEO of Competent Boards

The vast majority (95%) of business leaders and board directors believe that sustainability plays an important or very important role in shaping successful future boardrooms. That’s according to a Competent Boards white paper Why sustainability plays a key role in shaping future boardrooms that examined five key areas of focus for company board directors.

Two-thirds (66%) of poll respondents cited investor demand as the key driver of sustainable change in boardrooms. Other critical factors noted by respondents include: regulations; customer, employee and stakeholder demands; and board members’ fiduciary duty. 

How smaller companies can help the world get to net zero faster

By Helle Bank Jorgensen, CEO of Competent Boards
In the business world, the titans grab the headlines and dominate people’s thinking. Walmart, Amazon, Ikea, Unilever, Nike, Microsoft and Samsung are just some of the international giants that bestride the corporate world.

However, like a large iceberg, what goes on beneath the surface could be more important. These large corporations cannot act in isolation: their supply chains are full of and depend on the work of small- or medium-sized enterprises (SMEs). And according to the World Bank’s data, these SMEs more than pull their weight in the global economy, comprising:
90% of worldwide businesses
More than 50% of employment worldwide
Up to 40% of GDP in emerging economies
Seven out of every 10 new jobs in emerging economies

In reality, the cogs of business work well by being interconnected and interdependent. As such, SMEs have a huge — but currently understated and undervalued — role to play in the collective corporate effort to address the climate crisis and achieve net zero emissions by 2050 or sooner. It is time to turn the spotlight on the opportunities and
benefits these smaller and medium-sized businesses — and the world at large — would gain from taking meaningful climate action sooner rather than later.

Barriers to change
The links in supply chains are easy to spot. For example, a small company with vehicles for transporting its products will have Scope 1 emissions from those direct operations. However, those same emissions could form part of a much larger company’s Scope 3 emissions from indirect activity. So a simple environmental improvement by a small- or
medium-sized company, such as switching its vehicles to electric power or green hydrogen, could benefit the value chain.

Crafting the ‘G’ in ESG: Accountability in the Boardroom

By the Nasdaq Center for Board Excellence ‘ESG & Sustainability’ Insights Council: Helle Bank Jorgensen, CEO, Competent Boards; Amma Anaman, Associate General Counsel and Legal Relationship Manager, U.S. Listings, Nasdaq; Chantal Wessels, CFO, Corporate Platforms, Nasdaq. First published by Nasdaq – reposted by Harvard Law School Forum on Corporate Governance

As investment in environment, social and governance (ESG) gains momentum, investors and stakeholders increasingly expect swift and concrete sustainability initiatives from companies across the globe. But boards have lagged behind the ESG fervor. While 40% of directors were found to be ESG conscious with some level of knowledge in the space, only 8% of board directors were found to be competent and capable of effective, embodied action, according to a 2021 study of the top 100 public corporations internationally.

We recently considered the evolving perspectives in ESG, as well as tools and strategies for boards to meet the ESG expectations of their stakeholders.

Why Leaders Must Adapt To Evolving ESG Demands

By Helle Bank Jorgensen, CEO of Competent Boards

Earlier this year, I took part in a fascinating session with the World Economic Forum as part of the New Champion Dialogues 2022 series. Hosted by Olivier Schwab, Managing Director at WEF, I was joined by Anushka Bogdanov, Chair and founder of Risk Insights and Jason Jay, Senior Director at MIT Sloan School of Management. 

The discussion focused on the rapidly changing picture of environmental, social and governance (ESG) requirements for companies as they come under increasing pressure from stock markets to provide transparent, measurable and comparable data on their activities. 

And let’s not forget pressure from employees, suppliers, customers and other societal stakeholders. ESG risks and opportunities are a fast-moving field, with new regulations and expectations coming thick and fast. 

It starts and ends with the board of directors

For companies that want to effectively adapt to these evolving ESG requirements, including climate change, that process must start and end with the board of directors. ESG and climate change are areas where board directors cannot provide oversight if they don’t have the insight.