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  • stratESGy

Is the board ESG ready?

Board oversight includes advising the management team on the company strategy, and ensuring improved long-term value for all stakeholders. Directors must understand how ESG issues can affect that strategy, and be in a position to assess and address both challenges and opportunities. That’s why ESG Governance is becoming a new board standard. But, in general, boards and those who advise them lack education, case studies, guidelines and benchmarks to help them enhance board competency in this area.

Interestingly in PwC’s annual Corporate Directors survey, (responses from more than 600 public board directors), only 51 percent believe their board fully understands ESG issues impacting the company. Furthermore, many investors are concerned with how ESG affects the value of corporations. Issues like sexual harassment, cyber security, corruption, human rights, climate risks are on their radar. Social expectations and demands from stakeholders such as customers, employees, investors, communities and suppliers are growing.

Risk and reputation are two of the most fundamental aspects of "duty of care" for sitting board directors. Corporate leaders who take a broader view of their long-term strategy, including how they will meet ESG demands, will be better positioned to address new risks and opportunities. As noted in a recent article by the Harvard Law School Forum on Corporate Governance: "Because ESG strategy should align with business strategy and focus on material risks and business drivers, the full board will want to understand the ESG messaging and how those risks are being mitigated."

How should the board get started and advance on the ESG oversight:

  • Commit to board ESG oversight include ESG in the organization’s strategic plan

  • Invest in board education and include risks and benefits of ESG to create a common understanding among the directors and foster buy-in.

  • Include sustainability within the skills matrix to influence board recruitment

  • Require governance advisors and consultants to have ESG competencies

How can stratESGy support board’s ESG education?

Our modular Framework is used as an ESG-Ready education process. Board members can assess their understanding of the company specific ESG status with the Readiness Check. Guided through the Analysis and Integration modules they identify existing and missing ESG dots connections.

As they use the company specific data instead of theoretical case studies, they can immediately better articulate ESG guidance to the management. This will contribute to build board and management buy-in and will support the needed coherence for the strategy narrative.

To plan your next board “ESG Ready” education session visit:

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