Human Capital Management

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World Economic Forum Releases ESG Reporting Metrics and Disclosure Standards

On September 22, 2020, the World Economic Forum (WEF), through its International Business Council (IBC), recommended common standards to aid all companies around the globe, regardless of industry, in their sustainable value creation. The IBC invites all its members, which includes numerous large corporations, to declare their intention to report on these common standards, and encourages the wider corporate community to join them.
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BlackRock’s 2020 Investment Stewardship Report: Hits Record Level for Firm in Engagements and Director Accountability

BlackRock released its Investment Stewardship 2020 Annual Report. The report provides an overview of the asset manager’s engagements, views and voting statistics related to the 12-month period ended June 30, 2020. The report, which is double the length of last year’s, describes how the asset manager prioritized engagements with its portfolio companies, reaching the firm’s highest levels.
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Vanguard Spotlights Climate Change and Diversity as Priorities in its Latest Stewardship Report

Vanguard announced the publishing of its Investment Stewardship 2020 Annual Report.  The report shares the highlights of the asset manager’s engagements with its portfolio companies, observations and voting statistics relating to the 12-month period ended June 30, 2020. The firm’s key focus areas are primarily climate change and diversity.

Vanguard believes environmental, social and governmental (ESG) matters came into sharper focus during the 2020 proxy season because of certain events and circumstances, including the COVID-19 pandemic, economic uncertainty, escalating climate risks and historic social justice movements.
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Key Sustainability Standard Setters Converge to Promote Consistency in Corporate Sustainability Reporting

Five framework- and standard-setting institutions announced a joint statement on September 11, 2020 reflecting their collaborative vision to develop a comprehensive global corporate reporting system for disclosing sustainability topics such as climate change, biodiversity, wages and skills. The participants include the Global Reporting Initiative (GRI), CDP (formerly the Carbon Disclosure Project), Climate Disclosure Standards Board (CDSB), International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB).
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SEC’s Q2 Roundtable Offers Insight to Investor Views

On June 30, 2020, Chairman Jay Clayton moderated a virtual roundtable titled “Q2 Reporting: A Discussion of COVID-19 Related Disclosure Considerations” to solicit views from a small panel of highly experienced and well-informed private investors and asset managers (“Roundtable”).  The Roundtable included the following panelists: Gary Cohn, Former Director of the U.S. National Economic Council; Glenn Hutchins, Chairman of North Island and Co-Founder of Silver Lake; Tracy Maitland, President and CIO of Advent Capital Management; and Barbara Novick, Vice Chair and Co-Founder of BlackRock.
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SEC Urged to Mandate Disclosures on COVID-19 Risks and Responses

On June 15, 2020, Americans for Financial Reform (AFR), a nonprofit coalition founded in the wake of the 2008 financial crisis, called on the Securities and Exchange Commission (SEC) to require public companies to disclose how they are protecting employees from coronavirus (COVID-19), citing that consistent, comprehensive information is critical to investors and public health.

Although the SEC Division of Corporate Finance issued Staff Guidance in March 2020 providing companies with its views on COVID-19 disclosures, followed by a joint statement on COVID-19 disclosures in April 2020 by SEC Chairman Clayton and Corp Fin Director Hinman which statement recommended that companies “provide as much information as is practicable” about how they are responding to the pandemic, AFR claims that these efforts were only one step in the right direction.
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World Economic Forum Pledges to Stand By Stakeholders in the COVID-19 Era

The novel coronavirus (COVID-19) pandemic has posed unprecedented health risks and has led to global economic disruptions. The World Economic Forum (WEF), an international organization that fosters public-private cooperation on global, regional and industry agendas, released this month the “Stakeholder Principles in the COVID Era” (Stakeholder Principles) as part of its COVID Action Platform and called businesses to action stating that, during this time of crisis, “[t]he business community’s contribution: [is] to be leaders of responsiveness and stewards of resilience.”
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Davis Polk Client Memo: Human Capital and Climate Risk Disclosure – Analysis of 2019 Mandatory and Voluntary Reporting

To help guide public companies in preparing their annual reports and proxy statements for the 2020 season, we examined the climate change and human capital management disclosures that have been provided by the largest public companies in six industries. A key finding is that to date 10-Ks and proxy statements have generally contained only disclosures that are required by law.
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