There has been a groundswell of sustainability and Environmental, Social and Governance (ESG) actions in the past decade. The main driver is an increased focus on stakeholder capitalism, whereby companies are responsible for the interests of all stakeholders — shareholders, employees, customers, partners, community and the environment.
Whilst there has been a proliferation of companies making public commitment towards ESG goals, there is a growing concern of greenwashing and actions not being material enough. Part of the issue is that some companies still view this as a moral or corporate social responsibility agenda.
For sustainability priorities to be truly embedded, the board needs to understand and focus on the real tangible benefits, both financial and non-financial. At the same time, it needs to be aware of the risks and liabilities of not doing so.
For sustainability priorities to be truly embedded, the board needs to understand and focus on the real tangible benefits, both financial and non-financial.
Board members have a strong responsibility to ensure regulatory conformance, drive performance and future-proof their companies.
Board members have a strong responsibility to ensure regulatory conformance, drive performance and future-proof their companies. Companies that succeed in embedding the sustainability agenda as part of their business strategies must identify, quantify and communicate to all stakeholders the tangible benefits and risks. Moving beyond the moral imperative that individual directors and management may feel, the risks and benefits must be institutionalised, to be truly impactful.
As the famous line in the film The Godfather goes: “It’s not personal — it’s strictly business”. Directors would do well to realise that embedding sustainability priorities makes good business sense.
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