Activating Sustainability in the Boardroom

Next Generation BoardsSustainable LeadershipEnvironmental, Social, and GovernanceBoard and CEO AdvisorySustainability
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December 06, 2022
5 min read
Next Generation BoardsSustainable LeadershipEnvironmental, Social, and GovernanceBoard and CEO AdvisorySustainability
Executive summary
Boards can more successfully support sustainability initiatives if they focus on collaboration with management.
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Republished by Harvard Law School Forum on Corporate Governance.


Read the study in full here

The business case for sustainability has never been stronger

Organizations are under increasing pressure to create holistic approaches to sustainability and broader Environmental, Social and Governance (ESG) strategies to meet regulatory requirements and societal and investor expectations. At the same time, sustainability also presents an enormous opportunity for value creation to those that develop more sustainable products or solutions.

Russell Reynolds Associates examined the role boards can play in activating sustainability across their organization, setting out:

  • The importance of forging a collaborative relationship with the management team
  • The four key areas of board responsibility when it comes to sustainability
  • Actionable recommendations and examples of implementing effective sustainability oversight

Board directors should focus their sustainability oversight broadly on four key responsibilities: educating, integrating, overseeing, and ratifying.

 

The importance of forging a collaborative relationship with the management team

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The four key areas of board responsibility when it comes to sustainability

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Educate

Educate directors on material sustainability risks and opportunities to equip the board to productively contribute to their company’s sustainability strategy discussions.


Actions boards can take to educate directors:

1. Create dedicated sustainability training sessions.
2. Conduct materiality assessments.
3. Prioritize stakeholder engagement.
4. Educate committee chairs and members on sustainability.
5. Develop a shared sustainability framework.

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Integrate

Integrate sustainability risks and objectives into board processes and internal control and risk management system.



Actions boards can take to integrate sustainability into the board’s responsibilities:

1. Include sustainability in planning conversations.
2. Fully integrate sustainability into the board’s process.
3. Create accountability.

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Oversee

Oversee key sustainability risks, opportunities, and management’s KPIs on an ongoing basis and in close partnership with the management team.


Actions boards can take to oversee sustainability progress:

1. Set clear metrics.
2. Discuss progress frequently.
3. Stay informed about risks and opportunities.
4. Integrate sustainability into culture oversight.

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Ratify

Ratify management’s sustainability metrics and related disclosures.





Actions boards can take to oversee sustainability progress:

1. Communicate the sustainability journey.
2. Report on sustainability metrics.
3. Prioritize compliance and audit of sustainability goals.
4. Proactively monitor for sustainability-related risks.

 

 

Actionable recommendations and examples of implementing effective sustainability oversight

01

Implement temporary multi-committee responsibility





02



Cultivate a sustainable mindset in current and future board directors





03



Integrate sustainability into organizational culture

 

 

 

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Activating Sustainability in the Boardroom

 

Authors 

Louise Belloin is a member of Russell Reynolds Associates’ CEO & Board practice. She is based in Paris. 

Molly Conte is a member of Russell Reynolds Associates’ CEO & Board practice. She is based in Boston. 

Sarah Galloway co-leads Russell Reynolds Associates’ Sustainability practice. She is based in London. 

Beth Hawley is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in Chicago. 

Emily Meneer leads Russell Reynolds Associates’ Social Impact and Sustainability Knowledge teams. She is based in Portland. 

Laura Sanderson leads Russell Reynolds Associates’ operations in the UK and oversees the firm’s Board & CEO Advisory Partners team throughout Europe. She is based in London.  

 

Acknowledgements 

Tobias Blickle is a member of Russell Reynolds Associates’ CEO & Board practice. He is based in Munich.

Leah Christianson is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in San Francisco.

Rich Fields leads Russell Reynolds Associates’ team advising on Board Effectiveness and is a member of the firm’s Board and CEO practice. He is based in Boston.

Natasha Treschow is a member of Russell Reynolds Associates’ CEO & Board practice. She is based in London.