ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to the Listed Companies (Code of Corporate Governance) Regulations 2019 to elevate the responsibilities of the boards towards environmental, social, and governance (ESG) considerations and gender equality and diversity and inclusion (DE&I).

The proposed amendments, in line with international best practices, emphasise the board’s role in ensuring that listed companies operate with a comprehensive understanding of ESG considerations. Boards will be responsible for setting the company’s sustainability strategy, priorities, and targets.

This will include aligning with the upcoming ESG Disclosure Guidelines to create long-term value for the company and its stakeholders.

The amendments also envisage a more active role for the board in fostering DE&I within the company including promoting gender mainstreaming, gender equality, and the participation of women on boards, in management, and across the workforce.

To ensure proper oversight on ESG matters, the amendments propose that boards be responsible for regular review and monitoring of the company’s progress towards its sustainability and DE&I goals.

The amendments will allow boards to establish a dedicated sustainability committee with at least one female director or they will be able to assign sustainability and ESG-related matters to an existing committee.

This committee will oversee sustainability efforts, DE&I practices, environmental, social, and governance compliance and report on integrating sustainability for long-term company value.

By embracing these amendments, boards can position their companies for success in a world increasingly focused on sustainability and DE&I.

Published in Dawn, March 20th, 2024