A board member’s guide to ESG

How well do you understand ESG? If the subject of ESG comes up at a board meeting are you able to discuss it without looking clueless?

If you aren’t too sure what ESG is and why it’s important, don’t worry. This board member’s guide to ESG will guide you through:

• What ESG means
• Why ESG is such a hot topic at the moment
• The latest ESG trends

ESG is not going away

Environmental, social and governance (ESG) is now a big concern for boards across the globe.

Global efforts to combat climate change have reached a turning point. As nations implement their emission reduction strategies, directors are being forced to evaluate the climate-related risks that their companies face.

In this board member’s guide to ESG we examine why ESG is such a big issue and how boards and their members can prepare for ESG as it evolves.

• Companies have faced growing climate risks for years but its getting worse
• The warming of the planet, fossil fuel use, and increasing global concern about the need for change are all causing investors to examine companies and their carbon footprints
• Your board has a fundamental responsibility to engage on relevant ESG issues with a thoughtful approach because you are fiduciaries and stewards of your organisation’s long-term performance
• ESG competence is the bedrock to all of this
• Environmental and social problems evolve rapidly
• Engaging external and internal stakeholders proactively allows boards to monitor the ESG landscape and anticipate new priorities
• Board members should regularly engage these stakeholders
• An external advisory council can provide valuable insight when new information surfaces and be the eyes and ears for the board
• These councils can also be an excellent place to find new board members with sustainability experience
• Investors should also be involved in the discussion of sustainability issues
• It is expected that boards communicate directly and systematically with shareholders on critical issues

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