News Roundup: Most Companies Not Covered Under CSRD Still Plan to Align With Rule

CCI staff share recent surveys, reports and analysis on risk, compliance, governance, infosec and leadership issues. Share details of your survey with us: editor@corporatecomplianceinsights.com.

Workiva: 80%+ of companies not subject to EU’s sustainability reporting mandate intend to meet the rule anyway

The European Union’s Corporate Sustainability Reporting Directive (CSRD), a landmark new rule mandating financial and management disclosures on social and environmental matters, is already having a global impact, according to new research commissioned by Workiva, which finds that 81% of companies not subject to the rule still plan to bring their disclosures at least partially into alignment.

Workiva’s survey of about 2,200 professionals in environmental, social and governance (ESG) found that planned alignment for companies not covered by the CSRD was even stronger in North America, where 86% of organizations said they were planning to at least partially meet the requirements, than in Europe, where only 83% said the same.

Still, worries remain, as 78% of respondents had concerns about information sharing within their value/supply chain and 69% said disclosing their sustainability strategy under the CSRD is challenging.

Workiva’s study comes at an uncertain time. The CSRD’s reporting requirements begin their phase-in this year, and the European Parliament recently approved a watered-down version of its Corporate Sustainability Due Diligence Directive, alternately called the CSDDD or CS3D, which requires covered organizations to mitigate their negative effects on the environment and human rights. Meanwhile, a court case is still playing out over the SEC’s recently finalized climate disclosure rule.

FTI Consulting: Communication gap keeps CISOs and C-suite from seeing eye-to-eye

Despite increased focus (and, in some cases, budgets) on cybersecurity, communications between chief information security officers (CISOs) and C-level executives leave much to be desired, according to research by FTI Consulting that found some executives struggle to see clear benefits from cybersecurity spending.

FTI’s most recent survey, part of its continuing “CISO Redefined” series, included responses from nearly 800 people in nine countries, indicating that about one-third of C-suite executives reported having a hard time identifying tangible return on cybersecurity investment, and by the same margin, executives said their companies’ CISOs sometimes paint a brighter picture than the reality. Its first installment in the series, released in 2022, provided the CISO side of the equation and indicated that about two-thirds of CISOs had trouble fully understanding their role within their organization.

More than 90% of executives surveyed said cybersecurity issues have climbed up their agendas over the past year, and a majority say cybersecurity is either critical or a high priority. And budgets are rising as a result, with executives reporting an average increase of 23% in their cyber budgets over the next couple of years.

Survey: Regulatory changes driving cybersecurity transformation

A new report from security provider LogRhythm shows that cybersecurity transformation continues apace in the corporate sphere, with nearly all surveyed organizations (95%) saying they’ve revamped their strategies in the past year.

The survey of nearly 1,200 global security executives and professionals found that the shifting regulatory landscape was the biggest driver of changes to cybersecurity strategies, with 98% saying they’ve modified their processes to keep pace, 89% saying customer data protection expectations are a key driver and 65% responding to AI-driven threats and solutions.

Early season results point to busy year for shareholder activism

Shareholder activism looks to be increasing, at least according to first-quarter analysis released by Diligent, which found that nearly 400 companies worldwide have been publicly subjected to new demands and that in the first quarter of 2024 was the most successful first quarter for activist shareholders in the U.S. since 2021.

However, a notable quirk in the data is that all 60 new directors were appointed as part of settlement agreements — no activist has yet succeeded in electing a new director in a contested vote, with the most high-profile proxy fight of the year so far ending with The Walt Disney Co. comfortably defeating Trian Partners.

Data also suggest that 2024 could be another busy year for ESG activism. The number of shareholder resolutions in the U.S. rose from 25 in Q1 2023 to 47 in the first three months of 2024.