In an increasingly complex and convoluted ESG and sustainability landscape, it is important for corporate boards to engage with sustainability concerns effectively, through conscious and continuous effort.
Staying fully informed about the firms on whose boards they serve, along with the ecosystem in which these firms exist and operate, is a huge challenge for board members. An important means of navigating this is to ensure that the board has the right resources to remain properly informed – and is able to make the necessary enquires and obtain useful input from third parties. This entails:
- Constant upskilling and sustainability education and training for directors, to ensure the board can take a more strategic view on ESG matters and remain fit-for-purpose in a rapidly evolving ESG landscape.
- Establishing a sustainability sub-committee at the board level to ascertain the type of ESG information shared internally and externally, determine the space for ESG on the board’s agenda, and translate the language of sustainability into a form that is easily understood by directors.
- Leveraging digital tools to make it easier for board members to read data, and to foster communication by enabling them to comment and enquire (through the use of a chatbot, for example).
- Determining material ESG information proactively to ensure that boards are not simply passive recipients of agendas and are seeing the material ESG information that they need to carry out their responsibilities efficiently.
- Seeking ESG and sustainability advice from consulting firms to identify relevant ESG and sustainability concerns, formulate effective sustainability strategies, and design ESG governance structures and systems to help establish accountability and responsibility for sustainability throughout their organizations.
- Using regulatory and voluntary frameworks such as the TCFD and the TPT as a starting point to understand good practices to affect a manageable transition and embed transition plans within governance structures, to achieve strategic ambition though board oversight and reporting.
It is imperative to build a future-looking board that considers a long-term horizon, often beyond five years into the future. ESG and sustainability effectiveness is a key indicator of how firms will navigate that future.
For detailed analysis of how boards can prepare for a new way of functioning in a rapidly changing business environment, read Verdantix Strategic Focus: The Evolving Role Of The Board In An ESG & Sustainability Landscape.
