Deloitte in the Isle of Man recently held its third Climate Collective event in conjunction with the Institute of Directors (IoD), focused on governance considerations for sustainability.
The event attracted an audience of over 40 people and was introduced by Charlotte Lewis, Director and Advisory lead at Deloitte in the Isle of Man.
Keynote speaker Dr Roger Barker, Director of Policy and Corporate Governance from the Institute of Directors, spoke about how boards globally are considering sustainability in decision-making and how the Isle of Man entities can integrate ESG factors into their governance framework.
He highlighted the key business sustainability themes that he has seen at a board level:
- Pushback – Directors should carefully consider how their companies communicate and make disclosures on ESG, due to increasing regulation about these topics and to prevent risks of greenwashing
- Purpose – Board responsibilities to govern businesses are shifting to extend beyond shareholder value to include stakeholder value and the environment. Initiatives such as Better Business Act are championing this movement
- Structure – Boards are increasingly thinking about the kinds of structure they need to integrate throughout organisations. Questions such as “Do we delegate these duties to a Sustainability Committee?” and “Do Boards need a member with a Sustainability skill set?” are commonplace
- Corporate Reporting and Regulation – The ESG reporting landscape is complex and evolving with a significant number of provisions emerging globally, such as the Corporate Sustainability Reporting Directive (CSRD) and SEC Climate Disclosure Rule (in which both require mandatory assurance).
In the UK, large companies that are in scope are required to report on Climate-related Financial Disclosures and premium-listed and standard-listed companies are required to make disclosures under the Taskforce for Climate-related Financial Disclosures (TCFD) framework.The UK government are currently undertaking an endorsement process of the International Sustainability Standards Board (ISSB). Subject to positive endorsement, these would be available by Q1 2025 and incorporated into new UK Sustainability Reporting Standards (SRS)
- Litigation – There is an increased risk of stakeholder litigation, either by exploring information provided in companies’ sustainability reports or by challenging decarbonisation goals.
A ‘fireside chat’ was moderated by Ieda Gomes Yell, Independent Non-Executive Director, Institute of Directors and Chair of the ESG Subcommittee at the IoD Isle of Man. Nigel Cheesley, Head of ESG strategy for Islands Business at Lloyds Banking Group, Rachel Winterbach Senior Associate at DQ Advocates and Dr Roger Barker, Director of Policy and Corporate Governance at the IoD, discussed how climate considerations and other ESG factors have been integrated into Lloyds Banking Group (LBG) and DQ Advocates Governance structure.
Nigel said that at LBG, what is key to achieving the right culture and tone from the top, is to engage stakeholders to drive sustainability in their organisations’ values which integrate into their day-to-day work and decisions. He also highlighted that there are challenges to sourcing accurate data needed for sustainability reporting in the Crown Dependencies when compared to the UK.
Rachel (pictured) talked about the steps that DQ Advocates have taken to integrate sustainability considerations into its governance framework such as undergoing an internal sustainability assessment and prioritising small improvements like setting up recycling facilities and using sustainable suppliers. DQ compiled an action plan to implement further sustainability factors and started their ESG Committee in May 2023. Currently, DQ is focusing on providing sustainability education throughout the firm, inviting organisations such as Net Zero IOM and Manx Wildlife Trust to talk about their initiatives.
Both Rachel and Nigel agreed a great starting point for any organisation is to implement the UN SDG’s and UN Global Compact.
The audience took part in an engaging Q&A session. The opportunities, as well as the challenges, were highlighted for the business community in having an effective ESG strategy. Leigh Morris, CEO of Manx Wildlife Trust, encouraged the IoM business community to leverage the island’s status as the world’s only whole-nation UNESCO Biosphere.
Charlotte agreed with Leigh and highlighted what a fantastic opportunity the IoM business community has to use the IoM UNESCO Biosphere as a testbed for sustainability initiatives.
Steve Billinghurst, the recently appointed new Chair of the Institute of Directors Isle of Man, closed the event emphasising the importance of collaborating with communities and businesses at events such as this to take actionable steps towards a sustainable and prosperous future on the Island.
The next Climate Collective event is due to take place in the fourth quarter of 2024.
