PLC Forum 2022: Key takeaways

Businesses face a growing list of challenges, from a looming recession to grappling with post-pandemic ways of working, disruption to traditional business models and continual regulatory change.

At last year's annual PLC Forum, we focused on a range of pressing issues for senior legal advisers and decision-makers – how best to navigate the challenges of ESG ratings, how to improve diversity and inclusion at senior executive and board level, and the risks and opportunities presented by the metaverse.

Contact us

If you would like to know more about the PLC Forum, or if you would like to be invited to this year's event, please contact us.

Speakers

David Eveleigh
Group General Counsel and Company Secretary, Serco
Sandra Carlisle
Head of Sustainability, Jupiter Asset Management
Ben Yeoh
Senior Portfolio Manager, Global Equities, Royal Bank of Canada
Caroline Dawson
Partner, Clifford Chance

Related resources

Business and Human Rights Insights blog
Insights on current policy trends, legal developments and emerging risks connected to business’ approaches to and responsibility for ESG, sustainability, human rights and the impacts of climate change.
Financial Markets Toolkit
This newsletter covers legal, regulatory and policy developments pertaining to ESG from across the globe.

Navigating the challenges of ESG benchmarking

ESG analysis and rating services can be critical in helping investors to identify ESG risks. But environmental and social impacts are hard to measure, and differing methodologies – which are not always transparent – can produce confusing outcomes, making it difficult for the market to reliably evaluate ESG performance.

Our panel explored the challenges involved in using ESG ratings and noted that a growing number of ratings firms are entering the market. David Eveleigh, Group General Counsel and Company Secretary of Serco said: "There's a lot of them and they all have different approaches, so it's quite challenging to follow them all, but you can't ignore them."

Sandra Carlisle, Head of Sustainability at Jupiter Asset Management said: "They provide information, but if you are relying on them exclusively then you have a problem. The information is backward-looking, and the interrogation of that information is not very deep." And Ben Yeoh, Senior Portfolio Manager, Global Equities at Royal Bank of Canada said: "ESG ratings are an opinion. For people like me – an active manager – we might use them as a baseline, but we are very much using those opinions to form our own set of opinions."

All agreed that the industry is in its infancy and more professionalism and transparency is needed. Caroline Dawson, a Partner at Clifford Chance, argued that regulation of the ESG ratings agencies is not the answer. "If you go down that route before the industry is ready, then you create the issue we had in 2008 when we ended up with an over-reliance on credit ratings agencies and all the problems that that caused." David Eveleigh added that "regulation would be a disaster in this space when it is so immature. The market will rightsize it and people will start to go to the good agencies that provide good open data and open processes."

Diversity and inclusion 360^o– where are we now, what have we learned, and what challenges do we face?

PLCs have come a long way in improving diversity and inclusion but still have far to go, as social washing – a disconnect between commitments and genuine action – is a growing concern. The number of FTSE100 companies with women on the board is "pretty uninspiring at 39.1%" said Catherine Johnson, Group General Counsel at London Stock Exchange Group, who added "ethnicity representation is much further behind."

Session insights

Our panel explored what is driving change. Jenny Craik, Group Head, Performance, Reward & Employee Relations at HSBC said the things that differentiate those companies that are getting further with the D&I agenda is that it is "linked to their purpose and strategy and it is sponsored by the leadership team rather than just the HR function." While Gillian van Maaren, Partner and HR Director at investment management firm, Ruffer, said: "I think there is a lot of pressure from investors who are asking for tangible evidence of our commitment, and we are also seeing, increasingly, that millennials entering the industry are looking to join organisations with values and ethics that chime with their own." And Catherine Johnson added that getting buy-in to a D&I agenda at a senior level "is down to presenting a good business case that we will perform better if we get D&I right."

There are a number of obstacles to diversity and inclusion, including the availability of talent to sit on boards – both in terms of ethnicity and gender, and the difficulties of getting people to share their data and entrust a company to look after it.

Dealing with D&I-related complaints is a growing issue for companies, as Clifford Chance Partner Alistair Woodland said: "It is a question of balancing zero tolerance for certain behaviour with allowing people to learn and improve". Jenny Craik said that it is difficult, but possible "with a really clear code of conduct and transparency about how the investigative process works."

Speakers

Edward Bowles
Global Director of Public Policy, Meta
Chika Ekeji
Group Chief Strategy and Transformation Officer, MTN
Joachim Fleury
Senior Consultant, Clifford Chance
Jennifer Chimanga
Partner, Clifford Chance

The metaverse – risks and opportunities

The metaverse has been described as the future of the internet – a digital world where we will live, work and play, and which has attracted enormous investment from tech companies. In whatever form it takes, the metaverse is too big to ignore and will have a significant impact on business as well as our personal lives. Companies will need to navigate a complex patchwork of existing and emerging laws if they are to successfully operate in these virtual worlds.

Session insights

Our panel agreed that there is no single definition of the metaverse, but in essence it is an interoperable, 3D virtual world – or series of worlds. Edward Bowles, Global Director of Public Policy at Meta said: "The metaverse may be virtual, but the impact is very real," and Chika Ekeji, Group Chief Strategy and Transformation Officer at telecoms company, MTN, said: "It is the next long-term evolutionary step for where the internet will go."

The metaverse is growing fast – the Metaverse Standards Forum which was set up this summer with 40 member companies, now has 1,500 members who are looking at issues such as security, privacy and international standards. But the biggest challenge the metaverse faces will be making the interoperability between different worlds as easy as possible. "Connectivity between Horizon Worlds, which Meta is building, with the virtual worlds being created by many other companies and developers is crucial so that users can take their digital ID and assets to one world and back again seamlessly," Edward Bowles said.

The panel discussed use cases which range from training doctors to carry out complex operations, to enabling employees to work in re-creations of their own offices, virtually, providing better customer services and virtual entertainment such as concerts and sports events. Clifford Chance Senior Consultant Joachim Fleury expressed some scepticism about the hype around the metaverse – "it has been claimed that the metaverse is more life-changing than electricity, but you can't run the internet, the metaverse or blockchain without electricity," he said. He added that "the metaverse is here to stay and that businesses need to think about the use cases, and the risks and the issues they need to worry about, such as IP and what they might need to do if a metaverse provider goes bust". From a legal perspective he said that "the issues are not necessarily different, you just need to know how to apply existing rules and existing knowledge to this new situation."

We closed the PLC Forum with a discussion under the Chatham House Rule between Sir John Sawers, Executive Chairman at Newbridge Advisory and ex chief of MI6, and James Bole, Clifford Chance Partner, about current geo-political events and the impact on PLC boardroom decision making.

Clifford Chance

PLC Forum 2022

Key takeaways and reflections from this year's event

Businesses face a growing list of challenges, from a looming recession to grappling with post-pandemic ways of working, disruption to traditional business models and continual regulatory change.

Contact us

Speakers

Related resources

Diversity and inclusion 360^o– where are we now, what have we learned, and what challenges do we face?

Session insights

Speakers

We closed the PLC Forum with a discussion under the Chatham House Rule between Sir John Sawers, Executive Chairman at Newbridge Advisory and ex chief of MI6, and James Bole, Clifford Chance Partner, about current geo-political events and the impact on PLC boardroom decision making.

Across the Board

Toolkits & Client Log-in

Businesses face a growing list of challenges, from a looming recession to grappling with post-pandemic ways of working, disruption to traditional business models and continual regulatory change.

Contact us

Related resources

Diversity and inclusion 360o – where are we now, what have we learned, and what challenges do we face?

We closed the PLC Forum with a discussion under the Chatham House Rule between Sir John Sawers, Executive Chairman at Newbridge Advisory and ex chief of MI6, and James Bole, Clifford Chance Partner, about current geo-political events and the impact on PLC boardroom decision making.

Across the Board

Diversity and inclusion 360^o– where are we now, what have we learned, and what challenges do we face?