The role of the Board when it comes to ESG

Date: April 2022

Good governance is fundamental to any successful organisation, but as the focus of companies  moves away from a pure profit and shareholder focus to a more rounded and inclusive stakeholder view, how does governance have to change?

Sustainability has to be embedded across the entire organisation and boards needs to rethink how they are addressing the E and the S via the G

A 2021 study from PwC showed  that almost two thirds of board directors are linking strategy with ESG, but the same survey says that only 25% of directors feel that their boards hav‚Äče a good understanding of the ESG risks.

A recent survey by SWIPRA in Switzerland  showed that only 31% of institutional shareholders believe that boards assume sufficient responsibility in the areas of E & S.

Directors are seeing increased interest from shareholders in environmental and social topics, and it is becoming clear that ESG has to be considered across the entire value chain. Having a single sustainability officer or an isolated department is no longer sufficient. To get it right, sustainability has to be embedded across the entire organisation and boards needs to rethink how they are addressing the E and the S via the G.

So where should boards be thinking about ESG? In reality, everywhere! But here are some initial questions that boards should be asking:

One thing that is clear is that ESG is not a passing fad. We are in a period of transition where ESG is being singled out as the topic of the moment, but we BELIEVE. in a future where ESG is integrated across organisations to the same extent that financial performance is.  

Sustainability and ESG are complex topics, and many organisations are only at the start of this journey. It starts with understanding and assessing your impact, then aligning credible substantially goals with long term strategies and identifying the solutions that are right for your business.