G2: Management Accountability
CERES ROADMAP EXPECTATION
|The CEO and company management--from C-suite executives to business unit and functional heads--will be responsible for achieving sustainability goals.|
Check out the Roadmap in Action section for examples of how companies are implementing the Governance expectations of the Ceres Roadmap.
Management oversight of ESG issues signals a clear commitment to company-wide integration of sustainability. Companies should engage the C-suite in driving the sustainability agenda, and the CEO should appoint a publicly identifiable executive to oversee these efforts. In addition, companies can embed management accountability by identifying the specific senior individuals responsible for sustainability-related outcomes.
HOW ARE COMPANIES PERFORMING?
In The Road to 2020: Corporate Progress on The Ceres Roadmap For Sustainability, we evaluated 600 of the largest U.S. companies on their progress towards meeting the expectations laid forth in the Ceres Roadmap for Sustainability. Using data compiled and analyzed by Sustainalytics, for this expectation we assessed whether the company had management accountability systems in place to oversee sustainability performance.
The assessment found management oversight to be more common than board oversight, with the 167 companies (28 percent) included in Tier 1 having formal management committees tasked with ESG oversight responsibilities and the 68 companies (11 percent) in Tier 2 having informal accountability systems in place.
Sprint, for example, has integrated sustainability into the current roles of senior executives by assigning an executive steering committee, chaired by CEO Dan Hesse, with responsibility for ensuring the implementation of sustainability strategies. Other companies, including CA Technologies and Alcoa, have assigned formal responsibility to a Chief Sustainability Officer who reports directly to the CEO and a board-level corporate responsibility committee. There are variations in the structure of the internal accountability systems, but leading companies are able to clearly demonstrate that sustainability is a part of all business decisions from strategy to operations to human resources.
Integrating responsibility throughout a company, rather than limiting it to a single department, legitimizes sustainability for all employees and encourages interdepartmental cooperation in meeting ESG targets. Dell's Sustainability Council includes executive-level representation from across the enterprise, including the CEO, Investor Relations, Communications, Human Resources, Procurement, Finance, and Engineering leaders. This group meets semi-annually to discuss relevant sustainability risks and opportunities facing the business. Successful sustainability committees are cross-departmental and take a thoughtful, long-term approach to sustainability challenges. They identify immediate priorities for the company, continuously monitor progress and—with an eye towards emerging risks and opportunities—change course when necessary.
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