Companies Across APAC Stepping Up Efforts To Keep Whistleblower Policies Up To Date

Many companies across the Asia Pacific region have stepped up their efforts to keep their whistleblower programmes and policies up to date, and there is more that can be done, according to a senior lawyer of a global law firm. Companies are recognising that they must adopt best practices in the environmental, social and governance (ESG) space, said Mini vandePol, Head of Baker McKenzie's Asia Pacific Investigations, Compliance & Ethics Group. 

On ESG adoption in India, she said that at the moment, it is a little bit of a "mixed bag". "This is partly because it is being talked about mainly by the regulators like SEBI... I think there is a good understanding of the environmental part... It's the S and the G that are less understood," she said.

Meanwhile, the capital market regulator Securities and Exchange Board of India (SEBI) has mandated the top 1,000 listed companies by market capitalisation to make filings as per the Business Responsibility and Sustainability Reporting (BRSR) from FY 2022-23.

In FY 2021-22, more than 175 companies reported on the BRSR framework on a voluntary basis. "With the BRSR becoming mandatory from this financial year and a number of stakeholders, such as investors and ESG rating providers, placing reliance on disclosures made in the BRSR, assurance becomes key for enhancing the credibility of disclosure and investor confidence," SEBI had said earlier.

On March 8, SEBI extended the timeline until March 15 for the submission of public comments on the proposed regulatory framework for ESG rating providers. The regulator had placed a consultation paper on Regulatory Framework for ESG Rating Providers (ERPs) in the securities market on its website on February 22 and sought comments on the same.

"I think companies really need to grasp and improve their controls, processes and the way the company invests in the process of improving the S and the G," she said, adding that if you think about the social and governance elements as only compliance, then there will be issues as ESG is really a bigger conversation than compliance.

According to Baker McKenzie's Asia Pacific Whistleblowing Landscape Report, companies are now moving to include all aspects of ESG within their whistleblowing programme. More than half of respondents (60 per cent) said their whistleblower reporting programme now covers breaches of their ESG or sustainability policy.

"In the old days, people would speak up, then they were ignored or they were fired. The retaliation against people who blew the whistle was incredibly high. "To be a whistleblower, it takes a lot of courage. It takes enormous courage... you know that you are likely to lose. There are things like whistleblower rewards in the US by the SEC... but that is a very small minority....," she said.

Meanwhile, SEBI has proposed a regulatory framework on ESG disclosures by listed entities, ESG ratings in the securities market and ESG investing by mutual funds in order to facilitate a balance between transparency, simplification and ease of doing business in an evolving domain.