CCGG published a practical guide in 2018 to assist corporate directors in assessing and overseeing environmental and social (E&S) factors. CCGG approaches E&S matters through a governance lens, whereby E&S should be viewed by each company in terms of what is material to their business and oversee and disclose to investors what is identified as material accordingly.
The guidebook outlines 29 principles-based E&S recommendations covering eight key governance areas.
The Directors’ E&S Guidebook was developed following extensive interviews with directors from some of the leading companies in Canada and abroad, combined with an extensive literature review on the topic of board E&S governance and it incorporates input from CCGG members. Below are quotes from some of the directors that were interviewed.
Bill Anderson, Chair of the Board, Gildan Activewear Inc.
This new CCGG guidebook includes many recommendations that reflect best practices for companies with respect to environmental and social risk factors as well as the oversight role that the Board should play in this regard. As an integrated manufacturer, Gildan has invested in E&S practices and procedures which are consistent with the guidebook’s recommendations. We believe that CCGG’s guidance for managing E&S risks will be useful for many companies to ensure that such risks are monitored and properly mitigated across their supply chains.
Göran Ando, Chair of the Board, Novo Nordisk A/S
Environmental and social dimensions should be managed with the same rigour and reported with the same robustness as financials. For a company to be successful for the long term, it is imperative to understand and address in a timely way the environmental and social factors that may help or hinder achievement of business objectives.
I warmly recommend this guide as a must-read for any board member and encourage you to think about the questions you will ask of management based on what you learn from it. It's time to move ahead from overlooking these risks and opportunities and to put in place more diligent board oversight. This, to me, is simply good governance.
R.H. Auchinleck, Chair of the Board, TELUS Corporation
As we all know, the “tone at the top” drives corporate culture. At TELUS, the board plays a critical role in supporting the company’s deep commitment to embracing sustainable practices. We see this level of board engagement as essential if E&S initiatives undertaken by TELUS are to be long-lasting, add value and reflect an appropriate balance of stakeholder interests. Understanding environmental risks also enables us to more effectively manage enterprise-wide risks. The E&S Guidebook provides a practical toolkit for boards to think about how they organize themselves to create sustainable value for stakeholders.
Patrick Daniel, Chair of the Board, Cenovus Energy
Understanding environmental and social risks and how they are being mitigated is of growing importance to shareholders of corporations around the world. At Cenovus, we integrate environmental and social considerations into every aspect of our business, including at the board level, and we believe transparent disclosure of these risks is a critical component of effective oversight and management. While there’s no one-size-fits-all approach to E&S, this guidebook offers boards a well-rounded overview of how to provide meaningful disclosure to shareholders.
Isabelle Marcoux, Présidente du conseil, Transcontinental Inc.
The guidebook is as relevant for smaller companies seeking to develop a framework to govern and oversee E&S factors as to organizations with large market caps that already have in place robust E&S governance practices. Rather than being prescriptive, it offers a wealth of useful recommendations and relevant insights for boards to evaluate and adapt to their business reality and evolving environment. The guidebook also recognizes that efforts in this area take years, determination, and resources, and companies can only focus on a number of issues at a time. Our journey at Transcontinental has been about establishing a corporate culture where management believes in E&S as a driver of long term value for its employees, shareholders, business partners, and the communities in which we operate. The members of our board share our sense of responsibility towards our stakeholders. In fact, the board as a whole acts as a guardian of our multi-year E&S strategy and each of the committees of the board has a clear mandate to oversee one aspect or another of its implementation.
Tom O’Neill, Chair of the Board, Loblaw Corporation
Environmental and social matters are rapidly evolving and are an increasingly important area of focus for Canadian issuers and their stakeholders. The E&S Guidelines provide Canadian issuers with a well-thought out principles-based tool to assist them in reviewing and evaluating their E&S corporate governance practices.
Patrick Pouyanné, Chair of the Board, Total SA
Total’s ambition is to become “the responsible energy major” and the Board of Directors is strongly involved in the supervision of this challenge. Reviewing and assessing social and environmental risks, in particular the ones associated with climate change, is an important part of a board mission as well as ensuring that Total provides complete and transparent information to stakeholders on these issues. This is the reason why we issued our first climate report on a voluntary basis in 2015. “The E&S Guidebook” will certainly be a precious and useful tool to help directors in understanding better the investors’ expectations and to further integrate environmental and social issues in their work.
Michael Wilson, Chair of the Board, Suncor
Environmental and social factors are and will continue to be critical drivers of strategy and risk and must be high on the board’s agenda. Companies need to do more than focus solely on the most immediate and pressing E&S risks if they are to be successful. This guidebook is a reflection of shared best practices and outlines imperatives for boards to consider and adopt in guiding companies over the long term to effectively manage E&S factors and build corporate capacity for adaptation and change.