Embed UN sustainable development goals in companies
Incorporating the United Nations’ sustainable development goals into a company’s corporate strategy is best practice, and corporate counsel has a role to play, according to a sustainability manager.
Ahead of the 2023 Corporate Counsel Summit, UN Global Compact Network Australia sustainability and governance manager Dan Wilcock said it is ideal to embed these goals into an organisation’s future operations when they review their corporate strategy.
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The 2030 Agenda for Sustainable Development — which was adopted by all United Nations member states in 2015 — provides a shared blueprint for peace and prosperity for people and the planet, now and into the future.
It includes 17 Sustainable Development Goals (SDG), which are an urgent call for action by developed and developing countries in a global partnership.
The goals recognise that ending poverty and other deprivations must go hand in hand with improving health and education, reducing inequality, and stimulating economic growth.
They also include tackling climate change and working to preserve our oceans and forests.
Corporate counsel has a critical role to play in assisting the organisation with incorporating these goals, along with every other member of the organisation as well as those within supply chains, he added.
“It’s a question of taking a very deliberate approach to do business better, whether it’s in relation to the environment, social spaces, human rights, the way you pay your employees, or gender equality,” he told Lawyers Weekly.
At the summit, Mr Wilcock will be participating in a panel session about some of the key developments in environmental, social, and governance (ESG) issues to be aware of in 2023 and the role of in-house counsel to support their organisation in complying with upcoming ESG reporting requirements.
However, legal departments can demonstrate value by going further than just ensuring that the organisation is legally compliant, Mr Wilcock suggested.
“I think corporate counsel could advance conversations beyond strict legal compliance and encourage their organisation to incorporate these positive values into the very fabric of a business and its culture,” he insisted.
While the SDG agenda is at the halfway point, Mr Wilcock said it is clear that the world is not on track to achieve the goals by 2023.
As such, he urged governments, businesses, civil society, and academia to become more ambitious to achieve the goals.
Be aware of ESG reporting requirements
Another area that is evolving rapidly is ESG reporting, as climate-related financial disclosures could become mandatory in the near future.
Indeed, the Albanese government published a consultation paper in December 2022 on the development of a new Australian climate risk disclosure framework.
The government said Australia would establish a framework for “consistent, credible, internationally comparable disclosures” amid growing demand for higher-quality reporting requirements from investors.
The requirements will be phased in over time and are expected to be mandatory for large entities.
The government also signalled its intent to apply tailored requirements to comparable Commonwealth public sector corporate entities and investment funds.
“There’s also consideration and analysis happening about sustainability-related financial disclosures and nature-related financial disclosures,” Mr Wilcock said.
“So, I think we’re looking at a sequence of reporting standards and obligations coming to Australia in future years.”
Mr Wilcock said larger organisations that are well resourced have “hopefully” begun to consider what data gathering and reporting frameworks and processes they could employ.
While it could take longer for these reporting obligations to become mandatory for smaller organisations, he recommended that they understand what data is required throughout their supply chain and operations and prepare for climate-related financial disclosures.
When asked how legal departments could assist with this preparation, Mr Wilcock said being aware of the incoming changes as they are phased in and the associated compliance requirements is paramount.
In addition, corporate counsel would need to vet the data and information that companies report, similar to how reporting of financial information is verified, he said.
“If the information is inaccurate, there will be legal risks,” Mr Wilcock warned.
Nipping greenwashing in the bud
Greenwashing is a third area of focus, particularly for the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC), which have made it clear that they are going to crack down on companies that engage in the practice.
Indeed, ASIC brought its first court action in the Federal Court of Australia against Mercer Superannuation (Australia) Limited in February for allegedly making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
As such, Mr Wilcock pushed corporate counsel to be aware of these issues and ensure that their organisation implements a coordinated approach across a range of areas to comply with the law.
“Greenwashing can happen deliberately or inadvertently, but you can also find yourself in non-compliance with the Corporations Act or the competition law consumer protection provisions,” he explained.
“This can happen if marketing of products or ESG statements get ahead of what’s really happening inside the organisation on the ground.”
He concluded: “Corporate counsel needs to ensure that there’s good communication across all areas of the business and people are aware of the risks of making ESG statements that may not be legally compliant.”
To hear more from Dan Wilcock about how in-house counsel could help their organisations incorporate SDGs into their corporate strategy to end poverty and protect the planet, come along to the Corporate Counsel Summit 2023.
It will be held on Thursday, 25 May, at Sofitel Sydney Wentworth.