Embedding Sustainability Key for Boards, Says EY Report
According to the latest EY Long-Term Value and Corporate Governance Survey, boards need to push companies to make sustainability a core part of their business plans. Otherwise, they risk facing tougher rules from policymakers.
The survey, which gathered input from 200 directors and executives across Europe, highlights that not focusing on sustainability could lead to serious consequences like ecosystem collapse and resource shortages.
Julie Linn Teigland, EY EMEIA Area Managing Partner, says that boards play a crucial role in making sure sustainability is a top priority. She says they need to speak up and make sure their companies understand how important sustainability is.
Despite its importance, many companies seem to be losing interest in sustainability. The survey found that the average year companies are aiming to achieve their climate goals has been pushed back from 2036 to 2050. This suggests that companies are not seeing sustainability as a way to stand out or grow.
Most companies do not have a clear plan for how sustainability can help them succeed. Only about a quarter of companies have a solid idea of how addressing environmental and social issues can create value. This disconnect between company leaders and their boards shows that there is still work to be done to get everyone on the same page.
Andrew Hobbs, EY EMEIA Public Policy Leader, says boards must make sustainability a top priority and invest in projects that will make a real difference.
The survey also suggests that companies should take a more proactive approach to regulations. By embracing policies like the EU's Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD), companies can turn regulatory requirements into opportunities to excel.
Despite this, only a small percentage of companies are taking a bold approach to these regulations. The report urges companies to see these regulations as a chance to show their commitment to sustainability and access funding to support their efforts.
In addition to regulatory issues, the survey highlights the importance of responsible technology governance, particularly concerning artificial intelligence (AI). Many companies lack strong governance frameworks to ensure AI is used responsibly for sustainability.
You can access the report by clicking here.
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Source: EY
