ESG objectives for boards
Balancing ESG matters with other business priorities is a delicate and challenging role for directors. Boards that are leading the way are tackling this challenge by:
- Establishing the entity's ESG strategy and achieving set objectives;
- Overseeing risk and compliance issues as they evolve across a range of ESG areas;
- Monitoring stakeholder engagement as investors seek to understand how companies address and manage risks and opportunities;
- Navigating regulatory reform in relation to ESG issues;
- Appropriately disclosing and reporting on ESG objectives and performance; and
- Understanding the nexus of ESG with other business priorities.
In our assessment, as boards and their business seek to stay ahead of the curve, increasing attention will need to be given to reviewing ESG commitments, standards, policies, and their associated implementation. With ever-changing international and domestic guidelines and best practices—this is no mean feat amidst an already dynamic business environment and full board agenda.
Setting the ESG board agenda
ESG is a broad area of governance that includes, but is not limited to the below areas, which this guide will explore in turn. You'll also find a reporting duties checklist at the end of this guide.
Overseeing mandatory, climate-related financial reporting
Combating blue and greenwashing: ensuring valid ESG credentials and commitments
Monitoring diversity, equity and inclusion-related developments
Human rights due diligence and a company-wide commitment to identifying and addressing these issues
Board requirements to approve modern slavery statements
Reviewing, approving and monitoring the organisation's position on biodiversity risk
Embedding first nations protection into systems and processes
Compliance with anti-money laundering and counter-terrorism financing requirements
Managing psychosocial risks
Having a trusted whistleblower program