While Environmental, Social & Governance (ESG) is under debate and faces criticism from many quarters, the underlying reality - that corporates need to be generating value for both shareholders and stakeholders - is here to stay.
Fidelio is seeing that the importance of ESG is recognised by Boards in the UK and internationally. While there is broad agreement on the direction of travel, ESG issues that come to the Board are often complex and may require trade-offs. ESG has no simple template.
With this challenge in mind Fidelio has conducted research into the way leading companies
are embedding ESG into the work of the Board. We interviewed seasoned Board Members from leading FTSE companies, and with international experience, as well as hosting two in-person Chair Roundtables on key aspects of ESG. All interviewed had experience of serving as ESG Committee Chairs and we asked them to address three key questions:
If ESG is a matter for the Board, is an ESG Committee warranted, and how does it discharge its duties?
Does the Board give equal weight to the “E”, the “S” and the “G”?
What skillsets are needed around the Boardroom table for the Board to do justice to ESG?
This research, on top of Fidelio’s extensive ESG experience through our Board Evaluation, Search and Development work, has informed the Report which we are releasing today - ‘ESG & The Board: What Works’.
The Report explores the impact of the cost of living crisis and fall out from the Ukraine War on ESG priorities and against this backdrop considers how best to embed ESG into the work of the Board. This includes Board and Committee structure, as well as the implications of ESG for the Board skill matrix and succession planning.
A key theme throughout our Research was how to ensure that ESG is not narrowly focused on risk and that the Board does not lose sight of the opportunities ESG presents for companies and their stakeholders.
Fidelio expects ESG to continue to be a dominant theme in our Board Search, Evaluation and Development assignments. ESG is likely to remain a major factor in terms of access to capital, as well as licence to operate, for both privately and publicly held companies, and the imperative for the Board to embed processes and demonstrate ESG competence will only increase.
To read the full Report, please click here
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