These days there is a lot of talk about the recommendations/demands that Larry Fink, president of Blackrock, has communicated in his annual letter to CEOs. After last year's letter in which the president of Blackrock established climate change as a key factor in the long-term prospects of companies and urged them to implement corporate climate change strategies, this year he has gone further by calling for accelerating the transition process to net zero emissions, and using the energy transition as a lever to strengthen capitalism and on which to base the health of the economy.
The corporate information of each company linked to climate change, along with the rest of the environmental, social and good governance aspects(ASG information) will continue to grow in importance for all interest groups, especially for investors, which is why it calls for a single global standard for the disclosure of this information, facilitating the comparability and analysis of this information that allows for well-informed decision-making processes.
These trends, which have been accelerated by the emergence of the COVID 19 pandemic, confirm the new challenges that Boards of Directors must face in their work of evaluating the ASG risks of companies, and making the best corporate decisions that allow them to comply with sustainability commitments and have a clear vision of the progress that the company must achieve.
The reality, today, is that the Councils do not have the necessary tools to provide them with quality and updated information on ASG matters, in the same way that they have it on economic-financial matters. So, how are they going to be able to decide on ESG matters? How are they going to lead the sustainable transformation process that they must address and that interest groups are demanding with growing interest, as Larry Fink shows?
The urgency of transformation that is being requested by the interest groups requires putting the necessary means and tools at all levels of the organization to facilitate it, starting with the Board of Directors and its responsibility in matters of ASG and non-financial information, facilitating the evaluation of the company's sustainability risks and commitments, focusing the reporting to investors and regulators in the most appropriate way and reinforcing the company's sustainable business model.
FromSicasoft SolutionsWe are fully convinced of the need to follow this path and of the responsibility of the Board of Directors to lead the actions to be undertaken in order to face this challenge, providing their companies and themselves with the tools they need to do it successfully.