Governance News 24 August 2022

Governance News 24 August 2022

This week’s issue features coverage of ASIC’s latest corporate plan which outlines the regulator’s priorities over the next four years, as well as a number of shorter-term cross industry and sector-specific projects. We also cover a number of significant financial services, regulatory and ESG-related developments and more…

Remuneration

  • End LTIPs, mandate worker representatives on RemCos and increase pay transparency: The UK High Pay Centre has called for action to address the widening pay gap between CEOs and workers
  • Most S&P companies now include some form of ESG metric in their incentive plans, with HCM related metrics the most common category

Institutional Shareholders and Stewardship

  • NBIM says effective human capital management ie critical to success, outlines minimum expectations for companies

ESG 

  • Australia’s climate Bills | Science and Technology Australia suggests the Climate Bills should include an additional commitment to ‘name and fame’ transition leaders
  • The government is consulting on proposals that could see Australia’s largest GHG emitters cut emissions by up to 6% per year
  • UK financial regulator is recruiting for a new ESG advisory group
  • The ICA has welcomed government’s support of flood inquiry findings, reiterated calls for increased investment in resilience measures
  • In Brief |  Actuaries Institute analysis has found that climate change is already having a disproportionate impact on the affordability of insurance for vulnerable households.  The Actuaries Institute has put forward several policy recommendations to address the issue including (among others) implementing ‘structural solutions to improve infrastructure resilience’, better land use and planning and changes to building codes.  The Australian Council of Social Service has welcomed the report and called for ‘national review’ of insurance affordability ‘prioritising people experiencing financial disadvantage’
  • In Brief | Unlocking investment in the hydrogen industry: The IGCC has released a report outlining the barriers, risks and opportunities for investors to ‘accelerate’ the Australian hydrogen industry.  A key message is that green hydrogen (which is produced with renewable energy) ‘appears more economically viable and avoids serious investment risks associated with blue hydrogen’

Disclosure and Reporting

  • BlackRock has urged global coordination on the development of climate disclosure obligations

Regulators

  • Top Story | Consumer protection is the key theme in ASIC’s latest corporate plan
  • ASIC has provided an update on three projects aimed at improving regulatory efficiency
  • Expert panels: RBA to strengthen its ‘existing dialogue with the economics profession’

Financial Services

  • Government flags plans to consult on a proposed framework for the regulation of cryptoassets
  • The Board of Taxation has released a ‘consultation guide’ for its (planned) review of the tax treatment of cryptoassets
  • Consultation on proposed extension of the CDR to non-bank lenders
  • CDR: Treasury is consulting on a proposed ‘minor and technical amendment’ to the definition of ‘product’ in the Open Banking principal designation instrument
  • Hayne Commission case study: ASIC says ‘thousands’ of customers sold Freedom insurance policies may be eligible for compensation
  • FPA calls for ‘urgent and immediate continuation of ASIC industry levy freeze’
  • Treasurer calls for discussion of the role of superannuation funds in funding the energy transition, affordable housing and aged care
  • Encouraging investment in our region: Assistant Treasurer and large investors to visit Indonesia and Singapore
  • Insurer to pay up to $220 million over ‘pricing promises’
  • In Brief | Compensation for financial advice related misconduct tops $3.6 billion: ASIC says that as at 30 June 2022, six of Australia’s largest banking and financial services institutions had paid/offered a total of $3.6 billion in compensation to customers who suffered loss/detriment as a result of fee for no service conduct or non-compliant advice.  Of this total, $438m was paid/offered by the institutions in the first six months of this year (between 1 January to 30 June 2022)

Risk Management

  • Top Story | Google fined $60 million for misleading and deceptive conduct
  • ACCC to examine competition and consumer concerns with social media

Corporate Misconduct and Liability

  • Consultation on proposed stronger penalties for anti-competitive conduct

For full Governance News pdf please click here.

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