Strategic Oversight of ESG

In brief: ESG (environmental, social, and governance) performance as criteria for investment has a growing impact on value preservation, value creation, and, ultimately, the future of the corporation itself.

Directors are bound by fiduciary duties, which many argue now extend to considering ESG factors when providing oversight of strategy and risk. The broad scope and dual nature of ESG—which facilitates the creation of opportunities for business or reputational value, while also managing risks associated with ESG impacts—present a significant governance challenge for boards. 

To ensure a practical focus on how corporate boards can provide effective oversight of ESG, NACD interviewed company directors and sustainability executives representing a wide spectrum of companies varying in size, maturity, and industry. Their insights have been collected and distilled for this primer, designed for beginners looking to introduce ESG discussions in the boardroom and more experienced directors wanting to refresh and refine their knowledge.