Research: Boards still have an ESG expertise gap — but they’re improving

illuminem summarizes for you the essential news of the day. Read the full piece on Harvard Business Review or enjoy below:

🗞️ Driving the news: A recent study reveals U.S. public boards have made notable progress in ESG (environmental, social, and governance) expertise over the past five years, although significant gaps remain
• In 2018, only 29% of Fortune 100 board members had ESG credentials; by 2023, this number increased to 43%
• Despite this improvement, expertise in critical areas like climate and worker welfare still lags behind other domains

🔭 The context: Five years ago, the NYU Stern Center for Sustainable Business highlighted a critical deficiency in U.S. public boards regarding ESG issues
• With evolving global regulations and rising legal challenges around ESG failures, the need for expertise has grown
• Recent data suggests boards are responding, albeit unevenly, with marked improvements in environmental and governance credentials but modest gains in social credentials

🌍 Why it matters for the planet: Board expertise in ESG issues is crucial for navigating the sustainability challenges and opportunities companies face today
• Effective ESG governance can lead to better sustainability outcomes, influencing everything from climate impact to social justice and corporate accountability

⏭️ What's next: Companies are expected to continue enhancing their board compositions with ESG skills to meet regulatory requirements and societal expectations
• The trend towards establishing specialized ESG committees within boards suggests a structural shift towards integrated sustainability governance

💬 One quote: "Knowing the right questions to ask management on material ESG issues has become an important part of a board’s role," said Tensie Whelan, NYU Stern Center for Sustainable Business

📈 One stat: In 2023, 43% of Fortune 100 board members now possess ESG credentials, up from 29% in 2018

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