Board-level oversight of environmental and social issues is the topic of a study released today by The Corporate Library and Calvert Asset Management. For this groundbreaking study, The Corporate Library and Calvert examined US board committees which focus on corporate responsibility issues. The good news is that many boards have created such committees – in fact, 65% of the S&P 100 index companies and nearly one-fifth of the Russell 1000 index companies have a committee focused on sustainability issues. However, we found that even though many companies have such committees, board responsibility for corporate responsibility often does not extend to true strategic planning and risk management. As a result, sustainable and responsible investors are likely to continue to press companies to improve board oversight of social and environmental issues in the years ahead.
The report, which is available as a free download from The Corporate Library’s website, presents several recommendations for future research and investor engagement. One of the key recommendations for investors is to call on companies of all sizes to establish board oversight of environmental and social issues since smaller companies face the same sustainability risks as larger companies; however, the study shows that smaller companies are less likely to have a board committee dedicated to these issues.
Annalisa Barrett – Senior Research Associate