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2023 Report Finds Stagnation in Corporate Directors’ Engagement with ESG

The Sustainability Board, with support from Chapter Zero, released on November 15 its annual ESG preparedness report for 2023. The report looks at how Environmental, Social, and Governance (ESG) matters are integrated into the management of the world’s 100 largest publicly owned companies. Beginning with the 2023 report, additional US companies (61) were included, to bring the US representation to 100 companies and provide future trend data for the US. More than 2,400 corporate directors were surveyed about ESG engagement, ESG board policy, and involvement of female directors.  


Stagnation in Corporate Directors’ Engagement with ESG

The report found that:  

 

  1. The number of global boards that have ESG or “sustainability oversight” written in their corporate documents rose from 50% in 2019 to 88% in 2023. 

  2. Ninety-five percent of US companies had a written board policy on ESG. 

  3. However, director “engagement” with ESG went backwards: While the number of “ESG-engaged” directors on relevant committees initially rose from 16% in 2019 to 45% in 2022, it slipped to 43% in 2023. In the US companies, this baseline measure was even lower, with 41% in 2023. 

  4. Regarding director diversity, the number of global female corporate directors remained unchanged, at 32% globally. In the US, women comprised 34% of board director positions. 

  5. Female directors remained enthusiastic about ESG-engagement—64% were ESG-engaged in 2023, up from 60% in 2022—but in 2023, fewer women reported sitting on relevant committees—only 13% compared with 24% in 2022. 

  6. Regarding ESG qualifications in directors, 85% of directors worldwide (88% in the US) were deemed ESG-engaged because of their corporate experience in sustainability strategy. However, very few directors—7%—have formal credentials in ESG management.  

  7. Both the number of global directors assigned to relevant committees and those with ESG engagement have risen. In 2019, among 1,224 directors, 232 reported being on relevant committees and 36 had ESG engagement. By 2023, among 1,256 directors, 396 reported being on relevant committees and 169 reported ESG engagement. 


Sources: 

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