Cover Story

Transforming Board ESG Oversight

By Gib Hedstrom and Paul Camuti

10/01/2022

Directorship Magazine Article

With the growing emphasis of environmental, social, and governance (ESG) issues in recent decades, boards should assess how they are approaching ESG matters and consider what constitutes robust ESG oversight. Two seasoned business leaders—an ESG advisor to CEOs and boards of directors for the past 30 years and a senior executive of global companies—share their insights about ESG transformation.

Over the past two decades, environmental, social, and governance (ESG) issues have been appearing more frequently on CEO and board agendas. In recent years, the pace has accelerated rapidly, driven by investor interest, competitive pressure, and human capital issues. Investors ask about ESG oversight, ESG ratings (put forth by Institutional Shareholder Services, MSCI, S&P Global, etc.), workforce diversity, ESG tied to compensation, and even corporate culture as companies assess their likelihood to achieve growth goals and remain resilient in the face of challenges. Competitors are setting net-zero goals for greenhouse gas, or GHG, emissions and launching products that are purportedly better for the environment. Employees routinely indicate they care about company purpose. And the role that businesses play in uplifting people and society is becoming increasingly adjoined with environmental and social justice expectations...

Photo Credit: GettyImages

 

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Gib Hedstrom is founder and managing partner of ESG Navigator, a corporate ESG benchmarking and strategic planning platform endorsed by The Conference Board. He is a member of the NACD Faculty and author of Sustainability: A Guide for Boards and C-Suites and Sustainability: What It Is and How to Measure It.

Paul Camuti is the executive vice president and chief technology, strategy, and sustainability officer of Trane Technologies, a global climate innovator delivering heating and cooling solutions for the world. Paul is a member of NACD serving on the boards of Discovery Place, Lehigh University, and most recently ExOne.

 


This article is from the Fall 2022 issue of Directorship.