Three Steps Boards Should Take to Monitor Sustainability

Episode Summary

It’s safe to say that most boards don’t rank sustainability among the top five issues on their fiduciary radar. Yet, an investor’s definition of sustainability is typically much broader than the one held by corporate directors. Evan Harvey, Nasdaq’s Director of Corporate Responsibility, defines sustainability across three critical areas:

  • Environmental (“Issues we readily associate with sustainability”) — Emissions, carbon usage, recycling, waste water, water usage, etc.
  • Social (“How you treat people”) — Benefits, programs, human resources, policies that attract a diverse and innovative talent pool, etc.
  • Corporate Governance (“The structure of your corporation”) — Rules, checks & balances to ensure shareholder needs are being met, etc.
Sustainability is everything that helps your company sustain itself—its people, its profits—well into the future. It’s a long-term approach. Anything you can’t see in a financial statement that contributes to that long-term mission is sustainability.

With investors making decisions based on sustainability metrics (via tools like the Bloomberg Terminal), boards would be wise to consider these data metrics in their own operations, says Harvey. In the interest of building shareholder value, this episode answers the question: What steps can boards take to begin monitoring sustainability?

The filming of this episode of Inside America’s Boardrooms was made possible by our Knowledge Partners.