Human Rights, suppliers' labour conditions, Climate Change, carbon reductions, marketing to vulnerable customers, corporate tax strategies. The list of issues under the Environment, Social, Governance (ESG) umbrella seems to be constantly growing. Cases such as Enron, BP´s Deep Water Horizon, Samarco's dam failure, VW's emissions scandal demonstrate how any of these issues can seriously affect a company´s performance and in the worst case, long-term survival. Therefore, businesses need to reduce their risks from their negative Social, Environmental and Economic (SEE) impacts. Those businesses seeking to endure into the indefinite future, are also looking for opportunities by increasing their positive SEE impacts. Whether a risk-mitigator or also an opportunity-maximiser, a business needs effective board oversight and governance of ESG. In the end, it's the board who is responsible for assuring the longevity of the company.
Building on TOWARDS A BOARD MINDSET FOR CORPORATE SUSTAINABILITY (Business In The Community AND DOUGHTY CENTRE - 2013), the Centre is now undertaking further work on corporate governance options and in particular, the merits and role of a dedicated board committee for oversight of ESG / Corporate Responsibility. It will also consider a range of tools that businesses can use to create a board mindset for Corporate Sustainability defined as:
"A collectively held view that long-term value-creation requires the company to embrace the risks and opportunities of sustainable development; and that the board are simultaneously mentors and monitors, stewards and auditors of the management in their commitment to corporate responsibility and sustainability."
These tools include the use of a specialist sustainability panel of experts to advise the board; and changes in board recruitment, induction, appraisal and Continuous Professional Development.
Learn more about boards and corporate responsibility governance in the research report by Prof. David Grayson and Prof. Andrew Kakabadse, Towards a Sustainability Mindset: How Boards Organise Oversight and Governance of Corporate Responsibility.