It highlights research findings that show environmental, social and governance (ESG) issues are growing in impact and materiality for all industries, however, most company boards are lacking in ESG expertise to face these challenges.
Only 6% of 1,188 board members from Fortune 100 companies had experience in environmental ("E") and governance ("G") and only 21% had experience in social ("S"). Sectors with significant immediate climate change impacts such as insurance, transportation, and retail have boards with similarly low ESG representation.
The article also provides several ways for how directors and boards can become ESG literate:
- Get training from expert organizations like Ceres, National Association of Board Directors, and Competent Boards.
- Recruit board prospects from a growing pool of qualified ESG professionals.
- Create an ESG board committee to build engagement and accountability for all directors.
- Work with the c-suite to embed ESG into core business strategy.
Read the full NYU Stern CSB report here.
Read the Directors and Boards Magazine article here.
This research was also featured in the Harvard Business Review article, "Boards are Obstructing ESG–at Their Own Peril."