Sustainability begins at the top and must be supported with strong governance systems throughout the entire company - from the boardroom to the factory floor to global supply chains. By advancing sustainability leadership and action at the board level and into every aspect of decision-making, their companies will be in a better positioned to systematically make decisions that improve their environmental and social performance - thus, improving their overall competitiveness and resilience.
A host of corporate scandals and the financial crisis have underscored that most corporate governance systems do not adequately address sustainability as material and critical business risks and opportunities. Shareholders, consumers, employees, civil society leaders and policymakers are all demanding greater accountability and transparency from companies. Companies that employ strong corporate governance systems will be better positioned to foresee and adapt to changing economic, social, environmental, and political conditions.
Ceres’ work on corporate governance currently addresses the following:
The role of corporate boards for sustainability: Corporate boards have an important role to play in providing insights and oversight on critical sustainability issues that will have long-term material impacts on company performance. Our report, A View from the Top: How Corporate Boards Can Engage On Sustainability Performance lays out our vision for how companies can set up effective board sustainability oversight and governance systems.
Investors: We engage investors on board sustainability oversight to keep the pressure on companies that they invest in to develop stronger governance systems. Investors are increasingly focused on the role of boards in addressing environmental and social issues, such as climate change, water scarcity and human rights.
Companies: We educate sustainability executives, corporate secretaries, general counsels and others within companies on the impact of sustainability issues on corporate business and financial performance, and when and how these issues should be elevated to corporate boards. Our 2014 analysis showed that only 32 percent of large U.S. companies have formal systems in place for board sustainability oversight, slightly up from 28 percent in 2012.
Governance Experts/Directors: We raise awareness in the governance/board director community about what sustainability means and how it fits into board oversight. This can have ripple effects – as a highly networked community, directors often sit on multiple boards and act as leaders of other companies, spreading this knowledge across corporate boards.
October 3, 2016
The Rising Responsibilities of Directors for Tackling Sustainability and Climate Change