annual review indst 2024 public - Flipbook - Side 9
Annual Review 2024
Our engagement
plan
Our engagement plan identifies 12 key themes and 36 related sub-themes.
We find this breadth of coverage is necessary to reflect the diversity of the
issues affecting companies in our global engagement programme.
2024 delivered extreme weather events with record
heatwaves, droughts, wildfires, storms and severe
flooding worldwide, reinforcing the urgent need to limit
global heating. Geopolitical instability continued, with
the Russia-Ukraine war ongoing and conflict in the
Middle East. While inflation concerns eased, low real
wage growth has left households with the lingering
perception of a high cost of living.
Against this backdrop, half the world’s population went to the
polls in 2024, leading to changes in government in the US, UK
and India. This is likely to herald new approaches to tackling
mega-trends such as climate change, the risks to nature and
biodiversity, and digitisation/AI. We are also likely to see new
policy responses to ease the cost of living and reduce
geopolitical conflict. Given the rising risks and opportunities
for companies, the importance of good governance and a
responsive strategy is as high as ever.
Priority themes
In 2025, we will continue to focus on the most material
drivers of long-term durable wealth creation, with our
four priority themes:
Board effectiveness
To enhance the quality of board performance, which is
foundational for good company decision-making, we want
boards to set their risk appetite in alignment with the
company’s strategic goals, including profitable growth. We
will continue our focus on seeking improvements in board
skills and experience through dimensions of diversity, whilst
avoiding a box-ticking approach. This includes improvements
to ethnic diversity, following the recent progress on gender
diversity. The goal is to achieve representation reflective of
the diversity of the stakeholders that the company aspires
to serve.
We remain committed to improving a board’s “software,”
relating to how it functions, in addition to its “hardware,”
relating to its composition and structure. This means ensuring
that boards are assessing their combined technical expertise,
knowledge and experience to match their upcoming
challenges, such as cybersecurity, artificial intelligence and the
evolving legislative landscape. The board should monitor and
assess the prevailing company culture to ensure it is in line
with the company’s purpose, strategy and values.
Climate change
Our engagement remains focused on companies having a
strategy and greenhouse gas emissions reduction targets
aligned with the goals of the Paris Agreement, pursuing
efforts to limit global warming to 1.5°C. The importance of
taking action was reinforced by the Alliance of CEO Climate
Leaders ahead of COP29, highlighting the alliance’s progress
in reducing emissions by 10% while delivering aggregate
growth revenue of 18% between 2019 and 2022.1
Bruce Duguid
Head of Stewardship, EOS
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