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 extracurricular activity that gives LLM students the opportunity to work on current, real-world problems at the intersection of finance and social justice. A team of ten LLM students has worked under the supervision of Dr. Javier Solana in 2018/2019 and in 2019/2020.

As part of the project, the team has also drafted a policy paper and a blog post for Oxford Business Law Blog and European Law Blog

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 C-Ladna

As a group of three academics, we collaborated successfully and worked on three projects in the sphere of sustainability and specifically the position of stakeholders during board decision making. These projects spread over a period of 3 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 so as 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, indicating 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.

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. (2021) From a financial to an entity model of ESG. European Business Organization Law Review, (Accepted for Publication) 

Project 3: 

Chalaczkiewicz-Ladna, K. , Esser, I.-M. and MacNeil, I. (2021) Workforce engagement and the UK corporate governance code. In: Corporate Governance, Sustainability and Reputation. Thomson Reuters Aranzadi. (Accepted for Publication)

 

Previous Knowledge-Exchange 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): University 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.

· Invited talk (Prof MacNeil and Prof Esser) on Project 3 at 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 University 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).

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 University of Johannesburg where she deals with basic principles of board governance but also supplies knowledge linked to her research projects.

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

The CFL Research Group hosted a webinar during 2020 and Prof Esser and Prof MacNeil presented, ‘The Pandemic Response in the UK in the Context of Corporate and Financial Law – within and without Law’ during this webinar. The findings of this featured in an article posted by ‘Board Agenda’ where they refer to this piece and the impact that it can have. We were also invited by the Oxford Law Blog to submit a piece for their blog, featuring this work. 

Future plans and additional info

· A panel discussion is planned for August 2021 to share our findings on these 3 projects. The panel will be hosted by Stellenbosch University with people from the industry, policymakers and academics being on the panel. It is an open panel aimed at industry and alumni of the University with links in the corporate world.

· Dr C-Ladna is also planning a workshop to present our data and findings on Provision 5 workforce engagement mechanism (as per Project 3) to policy-makers.

· 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 will be part of a panel discussion at an interdisciplinary conference on Regulation and Governance in June 2021 dealing with the findings of all three of these projects.

· Prof MacNeil is progressing COP 26 side-events in tandem with Hausfeld Law and the Impact Investing Institute, encompassing Project 2.

· We have also been asked if they can report on our work relating to Project 3 on the Oxford Law Blog.

Our next phase, Project 4, will examine in more detail the operation of ESG in companies and its link with remuneration practices. Prof MacNeil, Prof Esser and Dr Betty Wu will work on this project. 

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. 

 

Impact-led activities on climate change litigation

Dr Javier Solana has engaged in a series of impact-led activities following his research on climate change litigation, including:

  • Participation to the Bank of England’s Working Group on climate change litigation for BES 2021 (June – October 2020)
  • Presentation at ECB Strategy Review Legal Roundtable (23 February 2021)
  • Presentation at ECB Legal Colloquium on climate change litigation (27 May 2021)

His research on Eurosystem’s power to promote environmental protection has been cited by ClientEarth in litigation against Banque National de Belgique (April 2021).