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The ESG Report

Practical ESG with Lawrence Heim

What is the role of ESG in shaping a sustainable future? Tom Fox and his special guest, Lawrence Heim, take an insightful journey into the principles and practice of ESG in this week’s show. Lawrence is a true advocate for ESG and shares his unique perspective and deep understanding of ESG and its role in shaping a sustainable future. 

Lawrence Heim is the editor of Practical ESG. He is a seasoned professional in the field of environmental sustainability; with a background in environmental compliance, technical consulting, non-financial auditing, and risk management, Lawrence has been at the forefront of the industry for over 30 years. His expertise and dedication have earned him a reputation as a leading voice in the ESG community. 

 

You’ll hear Tom and Lawrence discuss:

  • Practical ESG is a resource for ESG practitioners and the corporate community, providing practical and candid content analysis, and helping them understand complex issues.
  • Contributions cover a range of ESG topics, including climate issues, investor perspectives, and corporate culture management.
  • Lawrence is working on a blog about the recent SEC proposed rules for climate disclosure risk.
  • The ISSB (International Sustainability Standards Board) just announced the creation of a working group with multiple regulatory agencies, including the SEC. The goal of the working group is to align ISSB standards with existing national frameworks.
  • Adoption of ISSB standards is not automatic; it must go through legal and administrative processes in each country. In the US, FASB (Financial Accounting Standards Board) is responsible for the convergence process.
  • The SEC proposed rules have received over 6000 public comments, most of which are form letters or from concerned citizens. Stakeholders are concerned about the complexity of the proposal and need more time to evaluate it.
  • There are three different categories in the proposed framework for measuring greenhouse gas emissions: Scope One (direct emissions from the company’s own equipment), Scope Two (emissions from energy purchased from third parties), and Scope Three (emissions embedded in the company’s supply chain).
  • The proposed SEC framework does not specify how to collect the data or interact with suppliers. Other established frameworks, such as Conflict Minerals, can be used as a reference to think about how to approach the collection of the data and interaction with suppliers.

 

KEY QUOTE:

“…just because IFRS adopts a standard or develops a standard, that doesn’t mean that it is automatically established as a regulatory standard. These countries, as with anything else, individual countries have got to go through their legal and administrative processes to implement them and make them enforceable within their own boundaries, their own jurisdiction.” – Lawrence Heim

 

Resources

Lawrence Heim on LinkedIn | Email

Practical ESG

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FCPA Compliance Report

Alastair Parr on New Developments in TPRM

Welcome to the award-winning FCPA Compliance Report, the longest running podcast in compliance. In this special episode, I am joined by Alastair Parr, SVP of Global Products & Delivery at Prevalent to discuss developments in third-party risk management.

In this episode we consider:

  • Why is a comprehensive 3rd risk management solution not simply a nice to have but a must to have now?
  • Why is 3rd party risk management so much critical after the pandemic and the Russian invasion of Ukraine?
  • Improving the UX for TPRM.
  • Why has simplifying the UX for TPRM eluded most providers so far?
  • How can the UX be improved so the information which is the most vital and most relevant is captured and more importantly can be actioned?
  • How can the process of obtaining TPRM information to implementing controls to manage the risk be improved?
  • How can companies automate data gathering by using a single targeted assessment by building in targeted compliance mappings for legal or regulatory requirements?
  • Other areas of compliance such as modern slavery and human trafficking?
  • Do you see continued evolution of 3rd party risk management into 2025 and beyond?

Resources

Alastair Parr on LinkedIn

Prevalent

Being a Compliance Officer is Awesome on Amazon.com

Categories
Daily Compliance News

February 6, 2023 – The Activision Blizzard Punished Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition of Daily Compliance News:

  • Trump offers to post bond. (Bloomberg)
  • Activision Blizzard was spanked by SEC. (CNN)
  • Age discrimination win and whistleblower award in the UK. (FT)
  • Farewell to Mr. Peeps. (AP News)
Categories
Sunday Book Review

February 5, 2023 – The Coming Conflict with China Edition

In the Sunday Book Review, I consider books that would interest the compliance professional, the business executive or anyone who might be curious. It could be books about business, compliance, history, leadership, current events or anything else that might interest me. In today’s edition of the Sunday Book Review, we consider some of the top ethics books which every compliance professional should read in 2023:

  • Who Got China Wrong? by Bob Davis
  • Where the West and China Find Common Ground by Maria Tatar
  • Chip War: The Fight for the World’s Most Critical Technology by Chris Miller
  • Xi Jinping: The Most Powerful Man in the World by Stefan Aust and Adrian Geiges
  • Revolution and Dictatorship: The Violent Origins of Durable Authoritarianism by Steven Levitsky and Lucan Way
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Daily Compliance News

February 4, 2023 – The Pope Fights Corruption Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition of Daily Compliance News:

  • Will Weisselberg flip? (Bloomberg)
  • FTC says Lena can participate. (Law360)
  • DOJ looking at Silvergate. (Reuters)
  • Pope urges rejection of corruption. (AP News)
Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Internal Controls – Four Key Internal Controls for Compliance

There are four significant controls that every compliance program should have in it. They are: 1) DOA; 2) maintenance of the vendor master file; 3) contracts with third parties; and 4) movement of cash/currency.

  1. Your DOA should reflect the impact of compliance risk including both transactions and geographic location so that a higher level of approval for matters involving third parties, for fund transfers and invoice payments to countries outside the U.S. would be required inside your company.
  2. Your vendor master file can be one of the most powerful preventative control tools largely because payments to fictitious vendors are one of the most common occupational frauds.
  3. Your contracts with third parties can be a very effective internal control which works to prevent nefarious conduct rather than simply as a detect control.
  4. Your controls over the disbursements of funds and movement of should include such methods accounts payable computer checks, manual checks, wire transfers, replenishment of petty cash, loans or advances.

The bottom line is that internal controls are just good financial controls. The internal controls that detail requirements for third-party representatives in the compliance context will help to detect fraud, which could well lead to bribery and corruption.

 Three key takeaways:

1. Remember the top four internal controls for an effective compliance program.

2. Effective internal controls should do more than protect but also prevent internal program violations.

3. Effective internal compliance controls are good financial controls.

Categories
Sports and Compliance

The USMNT Imbroglio

Welcome to the Sports and Compliance podcast. For the longest time, I have wanted to have a podcast on the intersection of Sports and the World of Compliance and Ethics, both for those stories as they play out on the Sports Page and for the lessons they provide to business executives and compliance professionals. In this podcast series, I am joined by one of the top compliance commentators, Stephen Martin, CCO at Skillsoft. Together, we will use our love of sports and competition to discuss current ethical issues in sports, look at compliance through a sports lens, and determine how the world of sports and its stories can guide the compliance professional.

In this episode, we take up the imbroglio involving the US Men’s National Soccer team.  

Our topics include:

·      Is whistleblowing for revenge valid?

·      Is a 30-year-old event the basis for termination?

·      What are the responsibilities of a player to a coach? From a coach to a player?

·      What should the investigation entail?

Resources

San Stejskal’s In USMNT’s Berhalter/Reyna saga, everyone involved faces an uncertain future

In The Athletic.

Categories
Daily Compliance News

February 3, 2023 – The We’re No. 1 Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition of Daily Compliance News:

  • SEC now looking at hedge fund use of ephemeral messaging apps. (Bloomberg)
  • Somalia most corrupt, according to TI-CPI. (Quartz)
  • SBF banned from contacting former FTX employees. (Reuters)
  • Think you are having a bad week-did your business lose $100MM? (BBC)
Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Internal Controls – Discipline and Rigor In Your Internal Controls

New York Times columnist David Brooks’ thoughts on building and maintaining order inform the discussion on rigor in your internal controls. In internal controls, I believe it is incumbent to consider not only the most obvious risk areas for your internal controls but also the universe of potential transactions within a company’s operations. There is a clear need for rigor in your internal controls protocols. Adherence to that rigor can increase operationalization around the internal controls a company should consider, including gifts, travel, and entertainment expenses. Brooks said, “Building and maintaining order … requires toughness of mind and rigid discipline to serve your own work properly.” By having the rigor to institute and enforce the types of internal controls identified, you can go a long way toward detecting and, more importantly, preventing an FCPA violation from occurring.

Some of the key areas of Internal Control focus should be:

·       The Delegation of Authority (DOA)

Petty cash disbursements

·       Travel

·       P-Cards

·       Employee Expense Reports

·       Corporate checks and wire transfers, such as check requests, purchase orders, or vendor invoices.

·       Gifts and business entertainment

Three key takeaways:

1. You must maintain rigor around your internal controls.

2. Controls against fraud can also help to prevent corruption.

3. Building and maintaining good internal controls requires rigor.

Categories
Hidden Traffic Podcast

Japanese Human Rights Due Diligence Guidance with Ben Fouracre

Gwen Hassan welcomes Ben Fouracre, Managing Director and Global Investigations Lead for Asia Pacific and Japan at J.S. Held LLC. Ben has spent 16 years in Japan working with non-Japanese, non-Asian companies to help them develop and execute their compliance strategy. He is an expert in risk, supply chain, labor and environmental issues, as well as anti-corruption, anti-bribery and anti-money laundering, with a focus on human trafficking.  


The biggest focus in Asia has been foreign regulation, such as the FCPA. Many Japanese companies have fallen afoul of these regulations, which has led to the development of compliance departments and training. Companies in the region are now also increasingly focusing on sustainability and the social side of ESG. The Ministry of Economy, Trade and Industry and the Ministry of Foreign Affairs have been pushing for companies to have their own ESG strategy, goals and internal evaluation, and to focus on human rights and foreign policy.

The Japanese government conducted a survey that revealed one in five companies in Japan don’t have guidelines or safeguards related to human rights protection in their supply chains. However, there are some good examples of Japanese companies that are ahead of the curve. The Japanese government issued human rights due diligence guidelines, but there is still a need for proactive measures to be taken to ensure companies are doing what they say.  Although there is no definitive timeline or law in Japan, companies are responding to pressure from stakeholders such as investors, shareholders, customers, and employees to work towards sustainability.

Ben believes that companies must be seen as contributors, not profiteers off environmental and social harm. As such, policies and procedures must be implemented and evolve with the business. In particular, companies need to take a proactive approach to supplier risk profiling. This includes understanding the size, operations, and history of the supplier, their relationship with the company, and any potential risks the company may face from stakeholders when it comes to human rights issues such as child labor and forced labor.

NGOs have been actively raising awareness of issues related to sustainability and social responsibility, Ben points out. To ensure transparency and ethical and socially viable practices, companies should strive to engage in dialogue with NGOs. This allows them to better understand the issues and look for solutions.

Resources

Ben Fouracre on LinkedIn | Email 

J.S. Held LLC