Corporate Boards Have Never Been More Prepared to Face Down the Anti-ESG Backlash, New Research Finds.
By Tensie Whelan
Today’s business environment is increasingly characterized by volatility and disruption. Climate change, worker rights and welfare, geopolitical risk, cyber security, and corruption are just a few of the material sustainability issues that corporate leaders need to manage in order to reduce risk and drive positive financial returns. Engaging corporate boards in that journey will be critical to success.
In the past, corporate boards were not much involved in these issues. In 2018, for example, when NYU Stern Center for Sustainable Business (CSB) first assessed sustainability on Fortune 100 boards, just 22 had sustainability committees. We also found that board members had limited sustainability credentials which often were not matched to the material ESG issues confronting the company. In 2018, for example, only eight board members of the 1,188 total had cyber security credentials, only three had climate credentials, and only 12 had credentials in labor relations—all existential issues for most industries.
CSB just published a 2023 update which indicates some improvement: 89 of Fortune 100 companies now have sustainability committees, a jump from the previously mentioned 22. 43% of all board members now have some form of sustainability credentials, up from 29% in 2018. We have seen slight improvements in two of the three topics listed previously—in cyber security (50 out of 1,161 board members) and climate (22)—but a downturn in employee relations (7). We also find continued mismatches in some industries especially exposed to certain ESG issues such as energy, which has only one board member with climate credentials, and utilities which has zero board members with environmental expertise.
Read the full Fortune article.
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Tensie Whelan is a Clinical Professor of Business and Society and Director of the Center for Sustainable Business.