Global corporate governance principles that incorporate sustainability considerations for the first time were officially endorsed by G20 leaders at their latest summit.
The Organization for Economic Cooperation and Development (OECD) reported that the G20 leaders approved revisions to its principles that aim to promote investor confidence and financial stability by setting baseline standards for corporate governance.
The updated principles, which now include guidance on sustainability considerations, are designed to help companies navigate climate-related risks and opportunities, along with new guidance on shareholder rights, the role of institutional investors and disclosure.
“The revised principles mark a significant, renewed international consensus and a strong desire from all OECD and G20 members to strengthen guidance on companies’ sustainability and resilience, to help them support the green transition and adapt to climate risks,” said OECD secretary-general Mathias Cormann in a release.
The revisions include measures to promote disclosure of sustainability-related information and to clarify board responsibilities on sustainability issues, and they recommend dialogue between companies, their shareholders and stakeholders on these issues.
The OECD noted that while most jurisdictions promote disclosure of sustainability-related information only a few have regulatory provisions on ESG ratings and index providers.
“The principles aim to help companies access financing from capital markets, protect investors, and make companies, and hence our economies, more resilient,” said Japan’s vice-minister of finance for international affairs Masato Kanda. “It was therefore important and timely that we substantially revised them to reflect the many recent evolutions in corporate governance and capital markets.”