Boards take stock of ESG – Lexpert Special Edition: Finance and M&A 2021

John M. Valley

Apr 27, 2021

More and more, corporate Canada is being taken to task for its approach to environmental, social and governance (ESG) issues. However, as legal journalist Elizabeth Raymer explains in her recent article in Lexpert Special Edition: Finance and M&A 2021, the fallout hasn’t been entirely negative. While there are challenges associated with adapting to ESG standards and new reporting requirements, there are also opportunities, including the ability to attract “green” funding from investors and a focus on new markets. In the article, John Valley, Osler partner and corporate governance expert, explains that an “increasing number of institutional investors in Canada are now using ESG factors as part of their investment strategy.” In turn, he continues, this has created “an opportunity for companies to better engage with their stakeholders and focus on their organization’s long-term and sustainable value.”

John offers additional insight into the role diversity plays in ESG, and makes specific reference to Osler’s annual report on diversity disclosure practices.

“We have seen a slow but steady increase in the number and percentage of women on boards of directors,” he says. “But, disappointingly, what we have not seen is a corresponding increase in the number of women in executive officer positions.

“Over the past year, we have seen further focus on diversity, and in particular with respect to diversity characteristics beyond gender,” John comments while referring to the more than 300 Canadian companies – including Osler – that have pledged their support to the Black North Initiative. This attention, he says, extends to institutional investors and proxy advisory firms.

“Investors are voting their shares based on companies’ performance on diversity issues. This is consistent with broader trends where ESG-related concerns are now influencing expectations and, in some cases, investment decisions, in the market.”

Read Elizabeth Raymer’s article, “Boards take stock of ESG,” from Lexpert Special Edition: Finance and M&A 2021, published on April 22, 2021.