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

Kaveri Power Ltd has a board-level Sustainability Committee. At its meeting, the committee reviews emission-reduction progress and recommends a revised target. Which statement correctly describes the committee's position in the governance structure?

A board sustainability committee assists the board by reviewing ESG matters in depth and recommending actions, then reports to the full board. The board remains collectively accountable, so the committee neither replaces the board nor operates as a purely management body.

  1. AIt can approve the target on its own, and the board has no need to be informed
  2. BIt replaces the board's accountability for sustainability matters
  3. CIt is an advisory and oversight body that makes recommendations and reports to the full board, which stays accountableCorrect
  4. DIt functions only as a management committee made up of executives, outside the board's structure

Explanation

A board committee supports the board by reviewing issues in depth and making recommendations. The full board remains collectively accountable. Treating the committee as a substitute for the board, or as a purely management body, misstates its role.

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