Professor Bob Eccles of Harvard Business School is out front and very vocal on key corporate sustainability issues (like the global Integrated Reporting movement and continued expansion of sustainable investing). In a Forbes commentary he offers advice for corporate leadership on “how to show corporate leadership [in sustainability], posing the question to boards and C-suite: “What progress are we seeing in how boards of directors of public companies demonstrate leadership in sustainability?”
The answer comes in part from a 2014 report by the Ceres coalition that found only 32% of the boards of the 613 largest publicly traded companies had oversight (over their company’s sustainability efforts). Alas, the good professor observes, most companies see ESG and “E’ and “S” and “g” is lower case. Take Volkswagen as an example, Eccles writes — weak governance seriously undermined the company’s “E” efforts (one of the major leverage points for company products) and jeopardizes the “S” (social) efforts.
Eccles’s argument: “Weak corporate governance on sustainability inhibits companies’ abilities to profit from sustainability.” And, investors (seeking more profit) would like companies to do that (generate more profit) and investor’s interests in having long-term profitability will be inhibited as well. Bob Eccles is not too optimistic about rapid change at the board level on sustainability issues, but is optimistic that over the long-term, if investors make it clear that they are interested in long-term as well as short-term performance…well, things could change more quickly.
This post was originally published on Justmeans.com
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