With COP29 coming to a close, it is pivotal for NEDs to be reflecting on the impacts to business that will arise in the wake of the climate conference. Here, we spotlight a prime resource for considering ESG responsibilities on boards, and look at some insights to be drawn from the NED Handbook.
The consequences of climate change, and indeed sustainability more generally, will affect companies of all sizes to an increasing extent over time, and company strategy will inevitably be affected by ESG concerns.
It's now more important than ever for NEDs to:
- Be aware of their company’s current ESG policies, and consider whether these are sufficient.
- Consider the risks and opportunities for the company from both environmental and social change (in particular changes in the working environment, and the relevance to governance of culture, ethics and diversity)
- Be aware of both reporting requirements and voluntary reporting of ESG issues and (as with all company reporting) be satisfied that these are sufficient.
- Understand how a company might suffer financially from a poor track record on CSR issues, for example by failing to remain competitive by responding to environmental and social change.
- Be alert to greenwashing by their company, and ensure that their organisation isn't giving a false impression about products by incorrectly claiming that they are environmentally-friendly, or giving information about the company’s environmental strategy without real substance.
ESG is a fast-expanding area, and there are numerous comprehensive guides and frameworks available and in use to help companies understand what is considered a complex ESG ecosystem, including the UN SDGs, the TCFD Recommendations, standards set by SASB, the GRI, and the QCA's guide to ESG. These resources and more are talked through in the NED Handbook, available here, alongside a comprehensive guide to:
- Corporate Social Responsibility (CSR) and ESG
- The sustainable benchmarks of Profit, People, and Planet
- The source of pressures to act on ESG issues
- Reporting on environmental and social issues, and how to properly carry out reporting in line with government recommendations/requirements and disclosures on relevant information.
Learn More:
To read the full bank of information on environmental considerations for NEDs and more, follow the link here to The Non-Executive Directors' Handbook (Premium Members only).