Julia Hayhoe and Iris Mol discuss the challenges dominating the agenda of business leaders most advanced in their ESG thinking.

Environmental, social and governance issues are now recognised as a strategic priority by business, investors, society and political leaders alike. What can we learn from boards already wise to the challenges and opportunities that the quest for a sustainable future present?

While sustainability and ESG issues are rising up the corporate, political and public agenda, progress towards a more sustainable future remains slow.

Ahead of the crucial COP26 climate conference in Scotland this November, a successful outcome to the talks remains very much in the balance. Governments and businesses are facing criticism for dragging feet on turning commitments into material and measurable action. There are doubts whether the world’s richest nations will meet their pledge to finance a “just transition” to a more sustainable way of life.

While many boards are sincere in their desire to operate in a more sustainable way, they face significant challenges. It calls on boards to understand the dynamic demands, opportunities and risks presented by a broad range of stakeholders. Then to make tough choices about the mindsets, behaviours and tools they need to adopt and embed within the business.

Some business leaders are clearly ahead in their thinking and are wise to the challenges, and, importantly, the opportunities, that lie ahead.

So what can businesses, and the professional firms that advise them, learn from what sustainability-savvy boards are focussing on?

Drawing on our work with boards, independent advisory roles to NGOs such as The World Economic Forum and on the latest academic research, we have distilled the top five challenges far-sighted boards are grappling with.

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