• The legal memo for Argentina was prepared by Victoria Vasalo and Maria de la Paz Miatello of Perez Alati, Grondona, Benites, Arnsten & Martinez de Hoz (h) Abogados. My thanks to Florencia Librizzi of the UN Global Compact for the introduction to Victoria and Maria.
• The legal memo for Canada was prepared by Stephen A. Pike of Gowlings. Stephen was a member of the American Bar Association’s “Task Force on Sustainable Development” and that’s how I met him.
• The legal memo for Mexico was prepared by Felipe Chapula Aimaraz of Cacheaux Cavazoa & Newton. My thanks to Jose Miguel Olivares Padilla of Group Vial Serrano Abogados for the introduction to Felipe.
• The legal memo for Saudi Arabia was prepared by Grahame Nelson of Al Tamimi & Co. My thanks to Talha Yesilhark of Deutsche Bank for the introduction to Grahame.
• The legal memo for South Africa was prepared by Elodie Maume and Jean Milner of Webber Wentzel. My thanks to Mervyn King for the introduction to this firm, which is in alliance with Linklaters. Again, I want to thank Vanessa Havard Williams of Linklaters for helping us create the template for these legal memos for the one from the United Kingdom.
• The legal memo for South Korea was prepared by S.I. Park of Hwang Mok Park. My thanks to Dan Malone of Butzel Long for the introduction to Mr. Park.

As you all now know, these legal memos are being posted on the ABA’s Sustainable Development Task Force website’s “Duty of Board Directors” section. My thanks again to Lee DeHihns, the Chair of the Task Force, for making this possible.

These memos have also been posted on the UN Global Compact’s website, on the Explore Our Library page under “Sustainability & the Fiduciary Duty of Boards of Directors.” We will also be working with them to get legal memos from as many other countries as possible next year. Thanks to the efforts of individuals and law firms all over the world, we already have a unique database on the fiduciary duty and liability of company board directors, with a focus on their ability to consider ESG audiences, as well as an examination of the ability of institutional investors to consider these audiences. We hope that this will prove useful to practitioners and academics in a variety of ways. We will be exploring specific applications next year.

The Three Pillars of The Statement Campaign

These legal memos are the first of “three pillars” in The Statement Campaign. The second one is finding companies who will be the first to issue the Statement for their 2016 fiscal year. We are pursuing a variety of promising paths focused on certain industries and certain countries using different strategies to learn which ones are the most effective. This will no doubt be the most challenging of the three pillars, for obvious reasons. Getting companies to do something new is never easy—especially when it involves voluntary disclosure at the board level.

The third pillar is enlisting investor support through a global investor engagement initiative, using the PRI Clearinghouse platform. The lead sponsor of this initiative will be Arabesque Partners, of which I am Chairman. We are now recruiting the support of a few leading asset owners before formally putting this initiative into the Clearinghouse. If you are an asset owner interested in learning more, please let me know and I’ll send you the draft of this engagement initiative. The key points of contact will be Andreas Feiner (andreas.feiner@arabesque.com), Head of ESG Research at Arabesque, Tim Youmans (tyoumans@hbs.edu), my Harvard co-author and collaborator on The Statement and other projects, and me (robert.eccles@arabesque.com). I will keep you apprised of any major developments on this as well.

The purpose of The Statement Campaign, as all of you know, is to urge companies to have their board of directors issue an annual “Statement of Significant Audiences and Materiality.” While this statement is values neutral (e.g., the board can decide that the only significant audience is short-term shareholders so the company can play the earnings game, or the board can designate additional significant audiences and a longer time frame), you all know that my goal is to support integrated reporting and to create a sustainable society. I see the idea of “The Statement” as one mechanism, by which company boards can voice their support (or not) for the UN Sustainable Development Goals.

Some Relevant Recent Publications

I’d like to bring to your attention several recent pieces that reference or are relevant to The Statement Campaign. “Materiality in <IR>: Guidance for the preparation of integrated reports” was prepared for the International Integrated Reporting Council (IIRC) by the International Federation of Accountants. Stathis Gould, head of Professional Accountants in Business at IFAC, led this project. He has also published an interesting piece titled “Corporate Governance and Transperancy-The Chicken or the Egg of Sustainable Development?” Here, he addresses the question of what the private sector must do to rise to the occasion of supporting the 17 Sustainable Development Goals agreed to by the UN’s 193 members States this September. Stathis argues that:

The private sector’s contribution to the SDGs can, and should, be facilitated by the arrangements for corporate governance as implemented by governance codes and reinforced by companies’ law and stock market listing rules. Corporate governance, in substance over form, is the means to encouraging and enabling companies to embed sustainability issues into its strategy and the decisions it makes.

Also from the IIRC is the report “Creating Value: Integrated Reporting <IR> and Investor Benefits” written by Zoe Draisy, Reporting and Assessment Officer at the Principles for Responsible Investment. Referring to the type of information that is included in an integrated report, this report finds that “Studies have shown that investors are using this information in many ways, including to help manage investment risk, evaluate industry dynamics and the regulatory environment, validate an investment thesis and assess a company’s forward looking information.”

And in clever piece titled “Farsightedness in Corporate Leadership,” Ann Skeet, Director of Leadership Ethics at the Markkula Center for Applied Ethics of Santa Clara University, manages to link the Statement Campaign to some recent remarks by The Pope and the CEO of BlackRock. Ann concludes:

On the need for corporate leaders to embrace such farsightedness to protect the interests of important stakeholders in addition to shareholders, Larry Fink, Pope Francis, HBS scholars, and Exxon Mobil investors can agree.  I can too.

Homeowners, after all, usually make better home improvements than renters.  As citizens of the earth accept responsibility for our home, so CEOs and boards should act like the owners of the companies they lead.

Happy Holidays

As this is my last e-mail for the year, I wish all of you the best for 2016.

Let’s make it a great one for The Statement Campaign.