Environmental, social, and corporate governance (ESG) is an approach to evaluating the extent to which a corporation works on behalf of social goals that go beyond the role of a corporation to maximise profits on behalf of the corporation’s shareholders.

Some may say sustainability is the “flavour of the month”. If that was ever the thinking pre COVID-19, the pandemic has certainly had an impact on corporates’ sustainability agendas – no longer a “nice to have” but rather an operational and strategic imperative, at the heart of any business’s ability to compete and succeed in the long term.

Good governance, good decision making, is a cornerstone of good business. The double-headed health and financial crisis has accelerated the growing focus on both the purpose of the corporation and the role of the board in overseeing and leading in ways that promote sustainable business success.

Alongside this, the push by investors has moved from talking purely of share price and returns to asking about resilience and long-term value creation. Put simply, society is forcing companies to focus on the link between values and value.

That is why we worked with the World Business Council for Sustainable Development to finalise this paper on fiduciary duty which draws primarily upon perspectives and insights from United Kingdom and United States legal and regulatory structures.

We explain why sustainability matters and why it should be included by boards on their agendas as a matter within their remit. We consider how boards should address sustainability in the context of their company’s strategic objectives and business model.

The World Business Council for Sustainable Development is a Chief Executive Officer-led organisation of over 200 international companies. The Council is also connected to 60 national and regional business councils and partner organisations.

Along with the World Business Council for Sustainable Development, we are challenging directors to assess whether they are taking all relevant steps in the boardroom to ensure the company not only properly assesses and mitigates sustainability risks but also understands the opportunities that sustainability considerations can bring.