When and how Boards should Redefine their Corporate Strategy due to Evolving ESG Regulation
October 25, 2023
The discussion centred around the main challenges faced by board members in emerging markets (EM) due to increasing regulations, as summarized below:
1. ESG is still not a top priority on the agenda, especially in emerging markets. While board members may have some familiarity with ESG questions, it is not a realistic focus for all EM jurisdictions. Each market has its own unique context and what works in one country may not work in another.
2. Framework conditions and regulatory environments cannot be changed by individual board members alone. Collaboration and alliances are necessary to influence and shape these conditions. International organizations like the IFRS Foundation provide opportunities for emerging countries to participate in the development and discussion of ESG framework conditions.
3. The focus should be on understanding the impacts, risks, and opportunities associated with ESG and sustainability, rather than just complying with individual regulations. Companies need to be aware of their own specific impacts and risks, and operate accordingly. Transparency around these aspects will naturally align with regulatory requirements.
4. Regulation should be viewed within the broader context of operational application, impacts, risks, and opportunities. It is essential to consider multiple stakeholders and navigate the complexities of a multistakeholder world in order to arrive at effective solutions.
The video recording for this roundtable discussion can be viewed below.
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