Sustainability has never been a topic on the board agenda
In my 21-year career in sustainability, it has been crystal clear that matters outside Boards’ agenda are not relevant. Sustainability, encompassing climate, has been one of a kind.
Sustainability matters that are now in the media are exact the same ones that have been on my daily tasks for 2 decades, there is NO news at all. Climate change, water quality and availability, wastewater, protected areas, deforestation/fires, solid waste, take back rules (EPR or circular economy), licensing, impact assessments, air and noise emissions, etc.
But why sustainability topics, red flags, recommendations, suggestions have hardly been taken into account in a wide range of transactions, from M&As to debt issuances and loan grantings, as well as in businesses strategic planning then?
That is easy: sustainability has never been a topic on the boards’ agenda, neither a topic that executives should consider, even when discussions were as shallow and basic as lack of compliance with environmental rules in force. When I realized I needed Boards assessing sustainability, I started advocating on materiality of sustainability topics to survival of businesses in the long run pointing out that strategic planning should be updated to incorporate them.
But if Boards’ composition remains business as usual, i.e., former CFOs and CEOs – who have never taken into account sustainability matters on their previous roles, we reach a dead end. Corporate governance is the foundation for the E and the S from ESG to become real and produce effects.
Yes, we need sustainability-savvy board directors. Sustainability is such a relevant driver for businesses’s successful returns as the financial driver itself is. Former financial experts and CEOs for sure must remain in Boards, but they cannot continue to exist there alone.