via | Sustainable Life Media
Three in four board directors recognize the business risks and opportunities surrounding sustainability issues - but just half say their companies are actually doing something about it, according to a new Deloitte survey.
Deloitte polled 220 board directors at U.S. companies with $1 billion or more in revenue, finding that the majority consider themselves well-informed on the business benefits of sustainability. Most say they understand the risks (79%) and opportunities (76%) associated with sustainability and climate change.
On the other hand, just half think their companies have integrated sustainability into business strategy and risk management. And less than half of respondents think their boards and management are committed to addressing sustainability issues.
Such results beg the question, "How much influence can - and should - corporate boards have on sustainability and governance issues?" The answer, apparently, depends on whom you talk to. Just over one-third of survey respondents favor full board oversight, while another 37% say oversight should reside in existing board committees. (The directors split on which: 24% for risk committees, 24% for governance committees, 22% for strategy committees, and 15% for audit committees.)
Yet the influence of corporate boards in this area is on the upswing, according to Eric Hespenheide of Deloitte's enterprise sustainability group, and the report's author. "Despite the current economic environment, the board's role is undoubtedly increasing," he says. "There is greater awareness of the business risks and opportunities associated with corporate responsibility, sustainability and climate change."
Deloitte has published a whitepaper including recommendations on getting the board more involved. Here, some tips:
Get consensus. Take the first step toward improving board performance by scheduling a retreat or creating a forum for the board to talk through sustainability issues. If disagreement arises, have a facilitated discussion that gets all the issues on the table and allows a consensus to emerge.
Emulate the strong. Companies with strong sustainability programs share certain characteristics:
- Setting the tone at the top
- Establishing sustainability commitments and goals
- Creating a sustainability committee to coordinate company efforts
- Including sustainability metrics in CEO compensation
- Monitoring sustainability performance through regular progress reports
- Including sustainability topics in new director orientation.
Ask the right questions of management. Verify that management is acting decisively on sustainability by asking tough questions. Does your company have a "command center" to identify risks and opportunities associated with sustainability? Is this center supported with the right competencies - environmental engineering, legal, operational, marketing, controller, public relations and financing? Does your company have a roadmap for integrating sustainability into the operations of the business - with the appropriate governance structure in place?
Examine your footprint. Has the executive team determined the current environmental and social impact of your company - both good and bad? You can't measure forward progress if you don’t know where you are standing.
Find full text of the whitepaper, "The Responsible and Sustainable Board," here.
