Responsibility over sustainability

FOR some corporations, sustainability falls under the purview of their audit and risk committees because it is seen primarily as a reporting requirement.

But the ideal situation is that it should be embedded in the way an organisation operates and make it part of the daily objective of the teams.

A respondent to KPMG’S recent survey report said if organisations want to exist as a company in 10 or 20 years from now, they need to transform environmental, social and governance (ESG) to be part of everyone’s job with the sustainability team as an expert role.

Chief executive officers are responsible for sustainability in almost half of the corporations covered in its survey, with a dedicated chief sustainability officer as the second most-popular option.

More than two-thirds of the corporations have a separate decision-making body for ESG, sometimes known as a sustainability committee or council.

One respondent noted that the last five years have seen ESG “moved from shop window to core strategic initiative” with a budget, employees and board-level reporting.

Much of it has to do with investor pressure and consumer demanding for sustainable products and services and companies are taking bolder steps in embracing ESG.

Corporates can help ensure that their boards can lead the transformation journey by being equipped with the right knowledge and possessing the expertise to engage meaningfully on sustainability issues.

It should include sustainability metrics in the performance-related pay of board members and executives that align with corporate sustainability ambitions to help drive an organisation’s long-term commitment, KPMG’S “Anchoring ESG in governance” report says.