Reporting obligations on ESG issues continue to develop, with the regulatory landscape moving towards far greater transparency on ESG issues. Any information disclosed by a company (and its senior managers) will be scrutinised by its stakeholders. Increased reporting will increase the chances of stakeholders then holding the company to account.
Stakeholders may seek to hold a company to account through investment/purchasing decisions, pressure on reputation, exercising shareholder voting rights and/or civil liability actions.
A failure to assess and manage ESG-related financial risks could expose the company and/or its directors to civil liability actions (see, for example, Fiduciary duties).
The section 90A/schedule 10A FSMA regime gives investors the right to sue public companies that publish misleading information to the market, such as in a company's financial reports and RNS-announced press releases (published information). The first in our series of articles looking at different aspects of the s.90A regime can be found here.
See also OECD complaints.
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