Impact and Knowledge Exchange

Consultations

The Research Group engages in several consultation processes.

We have submitted our joint responses to public consultations such as:

- EU public consultation on the revision to non-financial reporting directive. You can read our response here: EU survey NFR

- FCA CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations. You can read our response here: CP20/3

- EU public consultation on the renewal of the sustainable finance strategy. You can find a copy of our submissions here (EC consultation 2) and here (EC Consultation 1, together with some additional comments: additional comments consultation).

 

Dr Solana has recently commented on the discussion paper “The 2021 biennial exploratory scenario on the financial risks from climate change” by Bank of England. He has also submitted a response to the Bank of England (BoE)’s consultation on its Biennial Exploratory Survey (BES) 2021 on 5 March 2020.

He has also responded to the European Central Bank’s public consultation on supervisory guidelines on climate-related and environmental risks in September 2020.

 

Prof. Sergakis has provided written evidence in relation to the Italian Authority Covip regarding the draft Regulation transposing the Shareholder Rights Directive for pension funds. Consultation COVIP 2020

He also provided written evidence in relation to the Italian Authority IVASS regarding the draft Regulation transposing the Shareholder Rights Directive for insurance funds. Consultation IVASS 2020

Lastly, his written evidence (together with Dr. Dionysia Katelouzou and Dr. Andreas Kokkinis) to the open consultation of the Greek Ministry of Finance has led to amendments to the final version of the Greek Bill on corporate governance. Greek draft bill consultation

 

Prof. MacNeil, Prof. Esser and Dr Chałaczkiewicz-Ładna have recently responded to the FRC Consultation  'A Matter of Principles: The Future of Corporate Reporting, Discussion Paper' (October 2020). FRC consultation 2020

They have also responded to the Consultation on Sustainable Corporate Governance launched by EU Commission. CFL Sustainable Corporate Governance

 

Finance and Social Justice Project

The Finance and Social Justice Project (the “FSJ Project”) is an LLM course that gives students the opportunity to work on current, real-world problems at the intersection of finance and social justice. It has three main goals:

  1. To enhance students’ employability by further developing their professional skills.
  2. To give students a practical insight into less conventional professional careers in corporate and financial law.
  3. To help students realise their potential to contribute to social change. 

In the FSJ Project, academic members of the research group and LLM students actively engage with non-academic organisations to understand how the latter address specific challenges of finance and social justice, and to disseminate the outcome of the students’ research.

The Project is keen to explore opportunities for collaboration with other academic institutions, as well as with non-academic organisations such as private companies, public authorities and non-governmental organisations.

If you are an organisation interested in collaborating with us, please email Dr Javier Solana.

 

 

You can find further information on the project here.

Environmental, Social and Governance (ESG)

Sustainability: The role of stakeholders in board decision-making

A collaborative project by Professor Iain MacNeil, Professor Irene-marié Esser and Dr Kasia Chalaczkiewicz-Ladna

As a group of three academics we collaborated successfully and worked on four projects in the sphere of sustainability and specifically the position of stakeholders during board decision making. These projects spread over a period of 6 years and resulted in academic publications (details below) but also contributed significantly to knowledge exchange, resulting in impact.

Non-financial reporting has risen in significance in recent years as the role of stakeholders who are not shareholders has been recognised in corporate governance frameworks. Our projects focus on the various mechanisms in place to protect stakeholders during board decision-making. We looked at the role of disclosure as a tool to address stakeholder concerns (Project 1: Strategic Reporting of the FTSE100 companies). In this context we focussed on the quality of non-financial reporting and evaluated how non-financial reporting facilitates stakeholder engagement in corporate decision-making. We found that compliance with those requirements is very high, amounting even to super or over-compliance. We also evaluated the quality of non-financial reporting through a series of interviews with stakeholders to determine whether the current regulatory framework on non-financial reporting in the UK informs stakeholders adequately to facilitate effective engagement in corporate decision-making.  

We are specifically interested in ways to get stakeholders more involved, rather than merely informing them, i.e., by increasing stakeholder engagement. In this context we considered various mechanisms, through hard as well as soft law, to deal with this issue. Our proposed entity model of ESG (Project 2: An Entity Model of ESG) suggests reform in this context to promote sustainability in the corporate sector more effectively, focusing on disclosure but also on stakeholder committees, a link with remuneration, voluntary ‘say on purpose’ provisions and mandatory due diligence. Our third project focused on the recent introduction of stakeholder engagement tools in soft law, in the UK. In Part 1 of the study, we noticed a shift to a more explicit process for the integration of stakeholder interests and a move away from the reliance on disclosure as the primary regulatory technique. In Part 2 of the project, we continued to evaluate workforce engagement tools introduced by Provision 5 and this paper focused on the engagement mechanisms as a tool to ensure more sustainable companies.

Finally, our fourth project concentrates on corporate purpose which has emerged in recent years as a key issue in connection with the role of corporate governance in the transition towards sustainability. We started our analysis by reviewing what corporate purpose means in different contexts and how it is framed in academic and policy discourse and then moved on to addressing some key questions: whose interests should be encompassed by corporate purpose; who should decide about corporate purpose, the board or the shareholders; and what legal technique should be used to implement corporate purpose?

Our projects are based on substantial empirical studies, doctrinal analysis, and evaluation.

Research Outputs linked to this:

Project 1:

Esser, I.-M., MacNeil, I. and Chalaczkiewicz-Ladna, K. (2018) Engaging stakeholders in corporate decision-making through strategic reporting: an empirical study of FTSE 100 companies. European Business Law Review, 29(5), pp. 729-772 (Part 1).

Esser, I.-M., MacNeil, I. and Chalaczkiewicz-Ladna, K. (2020) Engaging stakeholders in corporate decision-making through strategic reporting: an empirical study of FTSE 100 companies (Part 2). European Business Law Review, 31(2), pp. 209-242 (Part 2).

Project 2:

MacNeil, I. and Esser, I.-M. (2022) From a financial to an entity model of ESG. European Business Organization Law Review, 23(1), pp. 9-45.

Project 3:

Chalaczkiewicz-Ladna, K., Esser, I.-M. and MacNeil, I. (2022) Workforce engagement and the UK corporate governance code. In: Martínez-Echevarría y García de Dueñas, A. (ed.) Corporate Governance, Sustainability and Reputation = Gobierno Corporativo, Sostenibilidad Y Reputación. Thomson Reuters Aranzadi. ISBN 9788411254199

See: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3834387

Chalaczkiewicz-Ladna, K., Esser, I.-M. and MacNeil, I. (2023) The Workforce Engagement Mechanisms in the UK: A Way Towards More Sustainable Companies? (Part 2), (Accepted for Publication).

See: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4296944

 

Climate Litigation

Dr Javier Solana regularly engages with financial institutions, their regulators and civil society organisations that aim to promote a more sustainable financial system. He has been invited to present his research on climate change litigation in various policy fora, including the European Investment Bank Legal Risk Conference (2022), various knowledge exchange events at the European Central Bank and the Bank of England, and the Network for Greening the Financial System (2018). His work in this area has informed the new monetary policy strategy of the ECB (e.g. Drudi et al, 2021; Ioannidis et al, 2021) and informs the guidance that is currently being offered to more than 140 central banks and financial supervisors across the world on how to address climate-related litigation risks in the financial system (e.g. NGFS, 2023). It has also inspired the world’s first climate litigation case against a central bank (ClientEarth, 2021, p. 3) and has shaped the policy strategies of several NGOs (e.g. Del Vasto, 2019; Hercelin, 2019).

 

Previous KE activities resulting in Impact

Presentation of research with impact and knowledge exchange opportunities

We have been invited to present our findings and work at various events, conferences, and symposiums.

For example:

  • Invited talk (Prof MacNeil and Prof Esser): At ‘II International Conference on Corporate Governance’ (Universidad CEU San Pablo, Madrid) (2020) focusing on presenting Projects 1 and 2 to an audience of academics, practitioners, and regulators.
  • Invited talk (Professor MacNeil), focused on Project 2, to the Securities Regulation Committee of the International Law Association comprising academics, practitioners and regulators, December 2020.
  • Invited panel member (Prof Esser): Univeristy of Durham: ‘UK litigation on Extractive Industries and Foreign Security Forces’ (Feb 2021). This was an interdisciplinary event with the aim to apply for funding (a networking grant). This has the potential to provide impact and knowledge exchange opportunities through a network of scholars in the field of the law of delict, corporate law, and international human rights. The funding for this was successful and Prof Esser has been asked to be one of the collaborators and will present a paper during June 2023.
  • Invited Talk (Prof MacNeil and Prof Esser on Project 3): UCL interdisciplinary seminar series in Law and Finance (May 2021) as well as at the Sustainable Finance Conference in May 2021 hosted by the National Univeristy of Singapore.
  • Prof Esser was invited to present her work on stakeholder protection, especially during a pandemic at the Institute of Directors of South Africa (June 2021).
  • A panel discussion took place in August 2021 to share our findings on Projects 1-3. The panel was hosted by Stellenbosch University with people from industry, policy makers and academics being on the panel. It was an open panel aimed at industry and alumni of the University with links in the corporate world.
  • Prof Esser was invited to be an expert member by a media platform providing news, research and events on sustainable finance to professional investors to assist with a planned fund accreditation.
  • Prof MacNeil and Prof Esser were part of a panel discussion at an interdisciplinary conference on Regulation and Governance in June 2021 dealing with the findings of all three these projects.
  • Prof MacNeil organised two COP 26 side-events in tandem with Hausfeld Law and the Impact Investing Institute, encompassing Project 2.
  • Prof Esser presented Project 4 and Dr C-Ladna Part 2 of Project 3 at the ‘Future of Company Law’ SLS sponsored conference at the University of Edinburgh (April 2023). Prof Esser also presented the work on Corporate Purpose at Stellenbosch University during April 2023.
  • Prof MacNeil presented Project 4 at the ‘III International Conference on Corporate Governance’ (Universidad CEU San Pablo, Madrid) (2023).
  • Prof Esser has been invited to attend a workshop in Southampton during June 2023 on sustainability and corporate law.
  • Prof MacNeil will integrate insights from all the projects into a presentation on sustainable finance at the PRIME Finance AGM in the Hague in June 2023.

Knowledge exchange through provision of training

  • Prof Esser co-presented training with Prof Delport of the University of Pretoria to executives of the Revenue Services in Uganda (May and June 2021). This training is linked to the work she has done on these projects.
  • Prof Esser also presents a course on Board Governance annually at the Univeristy of Johannesburg where she deals with basic principles of board governance but also supplies knowledge linked to her research projects. As part of the work she does for this course the Institute of Directors in South Africa is looking into accrediting this course as part of CPD for their members. Prof Esser was contacted by the following organisations in connection with her research: (i) Corporate Secretaries International Association Limited (https://csiaorg.com/); (ii) The Institute of Directors South Africa (https://www.iodsa.co.za/ and she sits on their exam committee for the CDSA qualification (professional qualification for Directors).
  • Prof Esser delivers a “Corporate governance and the law” course for the Good Governance Academy, for the information about the 2022 course see: https://goodgovernance.academy/showcase-corporate-governance-and-the-law/

 

Comments on public consultations

  • The Green Paper Corporate Governance Consultation in the UK (2016)
  • The FRC on the updated UK Corporate Governance Code (2018) followed by a Company Lawyer publication.
  • EU public consultation on the revision to non-financial reporting directive, the FCA CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations (2020).
  • EU public consultation on the renewal of the sustainable finance strategy (2020).
  • EU public consultation on sustainable corporate governance (2020).
  • FRC public consultation on the future of non-financial reporting (2020).

These responses are linked to our projects as it highlights our findings on disclosure as a mechanism to protect stakeholders, but it also shows the weaknesses of reporting in this context and how it can potentially interact with other ways like board committees and due diligence.

Interviews with stakeholders

  • As part of Stage 2 in Project 1 we had various interviews with stakeholders such as NGO’s, trade unions, Client Earth etc.
  • We had various conversations sharing our research with the FRC Lab, Frank Bold (a policy-focused law firm in Brussels) and the UNPRI.

Media

(See: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3636292)

 

Future plans and additional information

  • We are preparing a joint response to the recently launched FRC’s Consultation on Revision to the Corporate Governance Code (deadline for submissions: September 2023) with the aim of highlighting the ideas from our projects and making the relevant suggestions and recommendations.

 

Sustainable Finance

Workshop on Sustainable Finance

On 29 March 2019, Professor Irene-Marie Esser and Dr Javier Solana organised an inter-disciplinary workshop on sustainable finance. The event attracted academic researchers from Economics and Law from various UK universities, as well as representatives of the financial industry and civil society organisations.

The workshop used the final report prepared by the High-Level Expert Group for the European Commission, which was published at the end of January 2018, and the Commission’s Action Plan on Sustainable Finance, which was published on 8 March 2018, as the reference points in their discussions of topics such as the introduction of Environmental, Social and Governance (ESG) considerations into investment mandates, climate-related disclosures, and the possible tension between systemic risk and climate change.


The group identified three broad lines of enquiry: 1) the possibility of direct intervention in the operations of investment firms rather than the indirect route of intervention on the investment chain; 2) the need to develop a taxonomy of “green” (and possibly also “brown”) financial products to inform climate-related disclosures and the challenges associated with that exercise; and 3) the need to rethink the normative priorities of financial regulators and supervisors if the policy objective of promoting sustainable finance is also going to encompass a stable financial system.


The workshop marked the beginning of a series of conversations that will continue to take place within the School of Law and with attendees to the workshop on the possibility of designing collaborative research projects that will address these and related questions.