ESG+ Newsletter – 21 May 2026
In this week’s ESG+ Newsletter, we look at growing pressure on US boards as major investors escalate their response to the omission of shareholder proposals, signalling a tougher stance on governance rights. We also examine an emerging split in global carbon accounting standards, as a new initiative challenges efforts to unify emissions reporting under existing frameworks, raising concerns about reporting fragmentation. Elsewhere, we explore how sustainability is increasingly being reframed as a core driver of supply chain resilience and competitiveness, with regulation and due diligence requirements pushing companies toward deeper transparency and diversification. Finally, we consider a growing concern that AI adoption, while widely accessible, may be reinforcing rather than reducing inequality within the workforce as effective usage becomes unevenly distributed across organisations.
This week’s poll
Do total emissions metrics provide a fairer picture than emissions intensity?
- Yes, they account for the total climate impact
- No, downstream emissions should not be attributed to producers
Last week’s poll
Investors putting US boards on notice over shareholder proposal omissions
This year, some of the largest US public pension funds have voted against board members at companies omitting shareholder proposals, per a recent article in Responsible Investor. This follows the SEC’s earlier announcement that it will no longer respond to the majority of no-action requests from companies seeking to omit shareholder proposals from their proxy statements, instead accepting the company’s representation that it has a reasonable basis to exclude the proposal, in many cases. This new regime affords companies additional cover to omit shareholder proposals from their proxies, which has prompted concern among some investors. Notably, the California Public Employees’ Retirement System (CalPERS) has said that “in a handful of cases” where CalPERS believed the omitted proposal had merit, the fund voted against the members of board committees. Elsewhere, UK-based asset manager Schroders has also voted against 11 US company boards over omitted shareholder proposals. This trend underscores the value for boards of maintaining open and constructive engagement with shareholder rights processes.
New carbon accounting methodology set to rival global standard
A quiet but significant battle is unfolding over how companies measure and report their greenhouse gas emissions, Reuters reports. The Greenhouse Gas Protocol and the International Organization for Standardization (ISO) have been working toward a single global standard for corporate carbon accounting, a development welcomed by businesses that struggle to verify and compare emissions data across their supply chains. However, a rival initiative, Carbon Measures, has recently emerged, proposing an alternative approach known as E-ledgers, which focuses on carbon intensity per unit of product rather than absolute emissions totals. Proponents argue this eliminates double-counting by transferring emissions along the supply chain, and that embedding granular product-level carbon data empowers buyers and consumers to make purchasing decisions based on the emissions embodied in specific goods, as opposed to those generated through scope 3 emissions.
Critics contend that focusing primarily on emissions intensity rather than absolute totals may understate the full scale of an industry’s climate impact, a particularly in sectors whose largest emissions exposure lies downstream with end consumers, such as fossil fuels. Additionally, investors seeking to understand total transition risk across a value chain are unlikely to find intensity metrics alone sufficient. As methodologies continue to evolve and regulatory approaches differ across jurisdictions, greater fragmentation in reporting standards may present challenges. With 2030 climate targets approaching and carbon border mechanisms gaining traction globally, there is increasing focus on improving consistency and comparability in emissions data. A more aligned global approach to disclosure could help support clarity and reduce complexity across frameworks.
Supply chain sustainability increasingly a strategic and competitive priority
A recent article in Automotive Logistics reported that the Automotive industry leaders at the European Association of Automotive Suppliers (CLEPA) recent Materials, Regulations and Sustainability event argued that sustainability has become a strategic lever for competitiveness and resilience, rather than merely a matter of regulatory compliance. Sustainability has become deeply intertwined with supply chain security, geopolitical risk management and long-term industrial strategy. The initial focus on Decarbonisation has evolved to encompass three interconnected priorities: forced labour elimination, supply chain transparency, and circular economy principles; with the elimination of forced labour practices in supply chains a key priority for 2026.
Regulation such as the German Supply Chain Act, initially viewed as burdensome, has proven its value by driving genuine supply chain mapping and transparency that companies are now repurposing as a resilience tool. These implications are sector-agnostic. The regulatory trajectory, mandatory due diligence, forced labour screening, and circular economy obligations are already moving across electronics, textiles, and food supply chains. Signalling the importance for global businesses with complex global supply chains to proactively prepare for potential sector specific be legislation to come into force.
AI usage may reinforce workforce inequality
A letter in the Financial Times from Peter Hantman, CEO of Tungsten Automation, raises a concern that AI adoption, may be deepening divisions within organisations. While AI tools are now broadly accessible regardless of role or educational background, data suggests that access alone is not translating into equitable outcomes. In practice, both usage and, more critically, effective usage remain unevenly distributed across the workforce.
As large language models increasingly commoditise knowledge, the competitive edge is shifting towards those who know how to apply these tools with strategic intent. In most organisations, which means more senior employees, individuals who bring not only greater contextual understanding but also the confidence and psychological safety to experiment, iterate, and embed AI meaningfully into their day-to-day work.
Hantman argues that realising AI’s potential requires organisations to go beyond simply providing access. It demands deliberate investment in capability-building at every level of the workforce, underpinned by clear use cases and a culture where experimentation is encouraged. While AI governance, as a means of capturing strategic opportunity and managing material risk, has been widely discussed over the past 12 to 18 months, this letter draws attention to a more specific and underexplored dimension of that risk. Namely, the prospect that AI, if left unmanaged, could quietly widen inequality within the workforce itself.
ICYMI
- Germany off track to meet 2045 climate target. According to Edie, Germany is projected to miss its legally binding climate goals from 2040 onward, with planned land-use measures failing to generate the expected carbon sinks and instead continuing to contribute net emissions through 2050.
- EU proposes mandatory supply chain diversification rules that will require companies to source critical components from at least three suppliers and limit single-supplier dependency to 30–40% to strengthen supply chain resilience across strategic sectors, Investing Live reports.
| The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
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