ESG Preparedness Report

The Annual ESG Preparedness Report (formerly The Sustainability Board Report) is a global benchmark of boards' ESG engagement.

Our flagship report assesses the level of ESG engagement by the boards of directors of the world's largest public companies.

Our assessment methodology has remained largely unchanged since 2019, but it has been progressively refined with the help of an expert panel that includes non-executive directors, non-executive chairs, board effectiveness and advisory professionals, academics, leadership advisors, and legal counsels.

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80%

of companies have implemented ESG oversight

45%

of directors on relevant committees are ESG engaged

Synopsis

In 2022 we are going into our report’s fifth edition, tracking a global snapshot of boards and directors’ ESG engagement. We are delighted to be collaborating with Egon Zehnder on this publication, which includes our 2022 report’s key findings and combines them with Egon Zehnder’s own research and insights.

There is a paradox inside boardrooms globally. While directors are growingly aware of ESG challenges, lack of preparedness and questions on how to create meaningful impact remain. Together with Egon Zehnder we shed light on this challenge and outline four recommendations for board leaders to step up as Stewards of Sustainability.

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Boards: Stepping Up as Stewards of Sustainability

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The Sustainability Board Report 2022 Data Book

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71%

of companies have implemented ESG oversight

40%

of directors on relevant committees are ESG engaged

Synopsis

TSBR releases an annual report on ESG preparedness of corporate boards of the world’s largest publicly listed companies. In 2020 we reported that there is generally a very low level of hard ESG competence on boards.

In 2021 we have found that boards are increasingly conscious of ESG matters. That has also resulted in the lines between consciousness (awareness and knowledge of issues) and competence (capacity to act on issues) becoming increasingly blurred. Discover how boards should prepare for a new dawn of sustainable leadership and who leads the conversation.

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42%

of companies have implemented ESG oversight

34%

of directors on relevant committees are ESG engaged

Synopsis

Similar to the study conducted in the 2020 Sustainability Board Report, which examined the first 100 companies in the 2020 Forbes Global 2000 list, this analysis looks at the board composition of family-owned businesses.

This Special Report finds that family-owned businesses, irrespective of their industry, are better equipping themselves for present and future challenges by building their boards with expertise and experience in sustainability.

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63%

of companies have implemented ESG oversight

17%

of directors on relevant committees are ESG engaged

Synopsis

The Sustainability Board Report aims to showcase different dimensions of good corporate governance and the importance of sustainable corporate leadership.

The 2019 Report found that, despite significant variation in the quality and quantity of sustainability reporting, including across regions, there were certain key elements and patterns that made certain companies stand out.

Our 2020 report explores these issues once again with an added focus on what has changed in the past year. Three takeaways emerge.

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54%

of companies have implemented ESG oversight

16%

of directors on relevant committees are ESG engaged

Synopsis

The report’s purpose is to showcase the importance of good corporate governance with a focus on identifying leading organisations that have made their board of directors supervise the sustainability efforts of their executive teams.

The aim of this report is to motivate companies to adopt a top-down leadership approach to create shared value, and so become a leader in a new era of capitalism.

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88%

of companies have implemented ESG oversight

43%

of directors on relevant committees are ESG engaged

Synopsis

This year's findings illuminate both strides made and challenges ahead. There is significant growth in sustainability governance, increasing from 50% in 2019 to 88% in 2023. This means, more boards have adopted sustainability oversight as part of their current committees or dedicated a specialist committee to it. However, stagnation in ESG engagement levels among directors indicates a need for renewed focus on individual sustainable leadership capacity. We must understand this 'engagement ceiling' and advocate for continued dedication to upskilling and engagement.

Additionally, our data yet again underscores the pivotal role of women leading ESG engagement. Their consistent involvement outpaces their male peers, emphasising the need for more inclusive boardrooms. We do not assess diversity beyond gender but recommend that boards also consider directors of different ethnic and socioeconomic backgrounds. They often bring new ideas and experiences to the table.

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Featured in this edition

71%

of companies have implemented ESG oversight

43%

of directors on relevant committees are ESG engaged

Synopsis

Our special report on publicly traded family businesses in 2020 revealed that sustainability oversight was lagging behind in comparison to our default sample of the Top 100 Forbes 2000 which contains mainly non-family businesses. However, directors on family boards were twice as likely to be engaged on sustainability than those in our default sample.

Fast forward to 2024 and we find three key themes that have evolved.

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