In February of 2016 I wrote a blog entitled "Environmental, Social and Governance Issues – Dealing with them is good business". The premise of that blog, as was evident by the title, was that if a business pursued environmental, social and governance ("ESG") policies that were responsible it would reflect positively on its bottom line. That blog was written two months before the Paris Agreement was signed in April 2016 and it has become clear that much more is at risk than the bottom line. The Paris Agreement sought to bring nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects, with enhanced support to assist developing countries to do so. Over the past couple of years, the attention on climate change has reached unprecedented levels with most of the scientific community agreeing that if drastic measures are not taken within the next decade then the damage will be irreversible (see www.un.org/press/en/2019/ga12131.doc.htm).

Despite what appeared to be advancement in the fight against climate change, on June 1, 2017 the United States announced that it would cease all participation in the Paris Agreement. After that announcement, numerous companies placed a full page open letter in The New York Times and The Wall Street Journal encouraging the United States to keep the Paris Agreement (see www.c2es.org/content/business-support-for-the-paris-agreement). The youth of the world have also become more and more involved. A very passionate Greta Thunberg spoke before the UN General Assembly in New York City on September 23, 2019 imploring that the leaders of the world take immediate action to protect the planet.

With what appears to be a vast majority of every sector of the world rallying in support of action to protect our environment, it is important that we continually assess the results of our actions. Most of the action taken to date has been in the form of policies adopted by entities setting out their approach to dealing with ESG issues. Many of these are very commendable such as The Principles for Responsible Investment (the "Principles") which were launched in April 2006. These Principles were developed in 2005 by the then UN Secretary General, Kofi Annan, along with a group of the world's largest investors. The Principles are:

  1. We will incorporate ESG issues into investment analysis and decision making processes;
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices;
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest;
  4. We will promote acceptance and implementation of the Principles within the investment industry;
  5. We will work together to enhance our effectiveness in implementing the Principles; and
  6. We will each report on our activities and progress towards implementing the Principles.

Out of this came the Principles for Responsible Investment ("PRI") which is an international network of investors working together to put the six Principles into practice. Approximately 2500 investors have signed the Principles.

Government organizations have followed suit and implemented guidelines and policies seeking appropriate disclosure from those entities. The Canadian Securities Administrators (the "CSA"), for example, recently issued a staff notice on "Reporting of Climate Change related Risks” which reinforces and expands upon the guidance provided in CSA Staff Notice 51-333 "Environmental Reporting Guidance".

As mentioned in my blog from February of 2016 and as set forth in the Principles, implementing the various policies that have been put in place is a critical step of the process so that, as Greta Thunberg stated at the UN General Assembly, we do not simply have "empty words". The implementation of the policies needs to occur at all levels and everyone needs to strive towards compliance. Governments, businesses and organizations such as PRI need to follow through on the policies that they have put in place. If such policies have not been put in place then active steps should be taken to do so. While the Principles are based upon investment analysis they can easily be modified to apply to other scenarios.

Professionals such as lawyers can also assist with the creation and adoption of such policies and can also assist in ensuring that an implementation and compliance schedule is adopted. Everyone needs to be educated on the importance of implementation as no measure is too small.

There is a fable about a hummingbird. During a fierce forest fire, while all other animals stood in stunned fear, the hummingbird alone took action by repeatedly carrying a single drop of water in her beak to the flames. When asked by the other animals why she bothered with such insignificant efforts, she simply replied "I am doing what I can!"

We all need to do what we can.

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