ESG Preparedness Report
The Annual ESG Preparedness Report (formerly The Sustainability Board Report) is the global benchmark of boards' ESG engagement.
Our flagship report assesses the level of ESG engagement by the boards of directors of the world's 100 largest public companies. We evaluate whether the boards have formalised ESG oversight as part of their duties, established a sustainability committee or delegated ESG matters to another committee, and the materiality of their oversight policy or committee charter. Additionally, we analyse board diversity, committee composition, and individual directors' engagement on sustainability issues.
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.
The article 'Sustainability in the Boardroom' (2014) by Lynn S. Paine of the Harvard Business School has been instrumental in shaping our foundational narrative.
Featured in this edition
of companies have implemented ESG oversight
of directors on relevant committees are ESG engaged
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.