Essential corporate news – week ending July 5, 2019

Publication July 2019

Hampton-Alexander Review: Improving gender balance in FTSE leadership – update published

On July 1, 2019 the Hampton-Alexander Review published an update in relation to the number of female directors appointed to FTSE 350 company boards.

Launched in 2016, the Government-backed Hampton-Alexander Review set FTSE 350 businesses a target of having 33 per cent of all board and senior leadership positions held by women by the end of 2020.

The key figures from the update are:

  • 32.1 per cent of FTSE 100 board positions are now held by women (up from 12.5 per cent in 2011).
  • Meanwhile in the FTSE 250, figures have jumped from 24.9 per cent to 27.5 per cent.

The update notes the figures show that if progress matches the same gains made over the last three years then FTSE 100 companies are on track to reach the 2020 target and that, for the first time, the FTSE 250 could meet the 33 per cent target for women in senior leadership positions if current progress is maintained. It also notes that there are now only four all male FTSE 350 boards, down from 152 in 2011.

Fourteen companies in the FTSE 350 have also been named by the Hampton-Alexander Review, in a new initiative to highlight those with one woman or less on their board.

On July 1, 2019 the portal for FTSE 350 companies to submit their senior leadership gender representation data to the Hampton-Alexander Review opened. Companies have until July 31, 2019 to lodge the gender split of their executive committee, and the direct reports to the executive committee, via the portal. The 2019 Hampton-Alexander Report will be published on November 13, 2019.

(Hampton-Alexander Review: Improving gender balance in FTSE leadership – FTSE 350 urged to keep up the pace to meet women on boards target, 01.07.19)

(Hampton-Alexander Review: Improving gender balance in FTSE leadership – FTSE 350 urged to keep up the pace to meet women on boards target press release, 01.07.19)

BEIS: Government’s Green Finance Strategy

On July 2, 2019 the Department for Business, Energy and Industrial Strategy (BEIS) published the Government’s Green Finance Strategy – Transforming Finance for a Greener Future (Green Finance Strategy). The Green Finance Strategy is informed by the private sector and wider stakeholders, and is, in part, a response to the recommendations of the Green Finance Taskforce published in March 2018.

It has three core elements:

  • Greening finance.
  • Financing green.
  • Capturing the commercial opportunity.

The Government will formally review progress against the aims and objectives of the Green Finance Strategy in 2022.

Greening finance

The Green Finance Strategy notes that the transition to a green financial system means fundamental changes to the way decisions are made across the economy. It sets out the actions the Government is taking to ensure climate and environmental factors are recognised and acted upon as a matter of strategic and financial imperative, and aims to ensure that current and future financial risks and opportunities from climate and environmental factors are integrated into mainstream financial decision-making and that markets for green financial products are robust in nature.

The Green Finance Strategy focuses on four elements: establishing a shared understanding; clarifying roles and responsibilities; fostering transparency and embedding a long-term approach; and building robust and consistent green financial market frameworks.

Actions that the Government is taking include (amongst other things) setting out its expectation that all listed companies and large asset owners will disclose in line with the recommendations of the Financial Stability Board's Task Force on Climate-Related Financial Disclosures (TCFD recommendations) by 2022 and establishing a joint taskforce with UK regulators (chaired by Government) which will examine the most effective way to approach disclosure, including exploring the appropriateness of mandatory reporting.

The Government will continue to explore actions it can take to ‘green’ the UK’s financial system and will publish an interim report by the end of 2020. The report will examine progress on the implementation of the TCFD recommendations.

Financing green

The Green Finance Strategy aims to accelerate finance to support the delivery of the UK’s carbon targets and clean growth, resilience and environmental ambitions as well as international objectives.

The strategy for mobilising green investment has four primary elements: establishing robust, long-term policy frameworks; improving access to finance for green investment; addressing market barriers and building capability; and developing innovative approaches and new ways of working.

Actions that the Government is taking within this framework include (amongst other things) announcing a package of measures to mobilise green finance for home energy efficiency, determining the steps necessary for landlords and businesses to understand and potentially disclose operational energy use, and strengthening engagement with local actors to accelerate green finance across the country. The Government is also mobilising green investments internationally.

Capturing the commercial opportunity

The Green Finance Strategy sets out the aim of ensuring UK financial services capture the domestic and international commercial opportunities arising from the ‘greening of finance’, such as climate related data and analytics, and from ‘financing green’, such as new green financial products and services.

To ensure the UK continues to capture the commercial opportunities arising from the ‘greening of finance’ and the ‘financing of green’, the Green Finance Strategy aims to: consolidate the UK’s position as a global hub for green finance; position the UK at the forefront of green financial innovation and data and analytics; and build skills and capabilities on green finance.

Actions that the Government is taking within this include (amongst other things) enhancing climate-related and environmental data and analytics and promoting dialogue with regulators and industry to support innovation, promoting the adoption and mainstreaming of green finance products and services, and engaging with professional bodies to drive green finance competencies – notably through the launch of a Green Finance Education Charter - upskilling the UK’s diplomatic networks and building capacity on green finance across the public sector.

(BEIS: Government’s Green Finance Strategy, 02.07.19)

(BEIS: Government’s Green Finance Strategy press release, 02.07.19)

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