Boards must decide whether to address ESG elements as standalone agenda topics or incorporate those elements into regular agenda topics. Example: Board oversight of ESG elements in the company’s supply chain can be incorporated into supply chain reporting and planning – human rights protections at the company’s suppliers, worker and product safety, sustainable sourcing, environmentally-responsible manufacturing (e.g., water, energy, waste). This integrated approach is holistic and holds business leaders, not just corporate staff, responsible for ESG outcomes.
How can boards communicate their oversight to investors?
- Companies can talk with investors about the board or committee discussions of particular ESG issues “x” times per year and which executives join those discussions.
- In-depth disclosure on the company’s website and in the proxy statement of the board’s approach to ESG helps all investors gain an understanding of the board’s role in oversight of ESG issues and take comfort that the board is addressing ESG issues in a proactive manner.
