Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board's Accountability on ESG

Banyan Pharma Ltd, a listed company, wants its board to oversee sustainability matters in a structured way. Which arrangement is most consistent with sound ESG governance practice?

Sound practice is to have a board-level committee or dedicated agenda item that reviews ESG strategy, targets and performance periodically with management reports. This keeps oversight with the board rather than leaving it to one executive or an external rating agency.

  1. ANo board-level forum; the CFO alone decides on ESG
  2. BA board-level committee or defined board agenda item on sustainability, with periodic reporting from management and review of ESG targetsCorrect
  3. CAnnual mention of ESG only in the advertisement section of the annual report
  4. DDelegating ESG entirely to an external rating agency

Explanation

Effective oversight needs a structured board mechanism, such as a sustainability or risk committee, with periodic reviews of targets and performance. Outsourcing to a rating agency or relying on one executive removes board accountability.

Did you get it right without looking?

One question tells you little. A timed set on Board's Accountability on ESG shows your real accuracy, how long you take and where you lose marks.

Practise Board's Accountability on ESGFree diagnostic mock

More Board's Accountability on ESG questions