Despite recent pushback in the US, sustainability remains a priority for many companies domestically and globally. There’s no doubt that ESG has matured over the last few years, especially as new legal requirements and risks emerged. We’ve seen sustainability reporting go from voluntary to mandatory in many jurisdictions. Additionally, more companies are seeing the resiliency value that robust sustainability practices bring. However, this maturity has not come without growing pains. Now that sustainability is less siloed and more integrated than ever before (although still not widely enough), sustainability professionals are finding themselves caught in internal political battles over who owns sustainability. The push and pull of demands across an organization can tie up your sustainability efforts in a knot. A recent LinkedIn post from Ioannis Ioannou explores this struggle:
“ESG has stopped being a marginal initiative and has become a site of internal struggle—a proxy for deeper disagreements over who defines value, what time horizon matters, and which part of the organization gets to lead.
The result is not simply organizational misalignment. It is something closer to a corporate identity crisis, playing out between legal departments and marketing teams, between CFOs and sustainability officers, between boards uncertain about their role and CEOs trying to avoid controversy. As ESG shifts from external messaging to internal strategy, the question companies must now answer is no longer just ‘What is our sustainability ambition?’ but ‘Who, exactly, owns this agenda—and at what cost?‘”
Here are PracticalESG.com, we’ve long been proponents of fully integrating ESG into companies’ core business functions. That integration does not come without challenges, and a seat at the decision-making table might not always be a comfortable one. The best way to avoid confusion and fully align an organization is robust governance of E&S issues. Having clear lines of reporting, task owners, and decision makers is invaluable to effective sustainability management. This is not always easy. Unlike many corporate functions, good sustainability touches every part of the business and influences decision making and strategy across all functions. This can quickly result in chaos, confusion, and power struggles that distracts from making real progress. There is no one size fits all approach to E&S governance, and each organization will have to tailor its own solutions. Those that do so with clear, well communicated structures will stand to get the most out value of their sustainability efforts.
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