You can’t be sure

Companies around the world may have been encouraged this week by the decision of the Dutch appeal court to overturn a judgement from 2021 that the oil giant Shell reduce its greenhouse gas emission by 45% across the world by 2030.

Much has been made of the fact that climate litigation is rising against both governments and companies, but the ruling suggested that corporates could push back against the trend.

However, according to some academics, corporate shouldn’t be celebrating the emergence of a laissez faire attitude to climate transition.

Joana Setzer, associate professor at the Grantham Research Institute at the London School of Economics, says the judgement does not mean the end of climate litigation.

“While the court dismissed the claim, the judgment also offers encouragement for future climate litigation.

“It reinforces the principle that companies must take meaningful action to reduce emissions and highlights the growing legal focus on corporate accountability in the face of climate change.

“More than 20 other cases are currently examining the human rights responsibilities of companies regarding climate change.” Best keep the lawyers on speed dial.

Growth spurts

A quick note about what could show up in the Audit Reform and Corporate Governance bill when it eventually shows up (change has only been under discussion since 2018, so we shouldn’t be too impatient).

Of course, there has been much speculation because, well, there’s been so many recommendations. But chancellor Rachel Reeves offered a clue about the general direction of travel this week in her Mansion House speech. She announced she had told a whole slew of regulators they had new “remit” letters.

“These make clear that I expect them to fully support this government’s ambitions on economic growth,” said Reeves.

When she was business secretary last year Kemi Badenoch, gave the Financial Reporting Council (FRC) a new remit to support growth. Reeves is doubling down on that principle.

So, when the audit reform bill does appear, and likely create a new regualtor—ARGA—with at least some new powers, don’t expect it to do anything that smacks of creating a lag on growth. Regulation and governance are being put back in their boxes.

Seeking parity

Only 12 companies in the FTSE 100 have achieved “gender parity”.

According to analysis from headhunters Russell Reynolds, a quarter of the top 100 companies have executive teams where fewer than 25% of the places are held by women. The research looked at top executive roles including business unit leaders, COOs and CFOs.

Laura Sanderson, Russell Reynolds’ co-lead in Europe, Middle East and India, says: “Establishing a cohort of skilled women leaders needs to be treated as a business imperative.”

She adds: “Boards must take active steps to manage their talent pipelines.

“At its core, achieving gender balance in business leadership is an indicator of organisations’ succession and talent planning success.”

Stress incoming

Bad news for US board members: you may be about to start spending more time in the boardroom.

According to lawyer Michael Peregrine, writing for Forbes, the swathe of business policies about to emerge from Donald Trump’s new presidency means execs and non-execs will have to spend much time together wading through the implications.

Peregrine says this means two things. Board members need to do their homework.

And… “Second is the need to present the case for heightened board engagement in a manner that doesn’t come off as micromanagement.

“Executive leadership may need assurance on the rationale for board involvement, and on the limits of its scope; limits which in some cases may also serve to reduce directors’ own liability exposure.”

Boardrooms may about to become much more stressful places to be in the US. We can only wonder if it will spread.