Despite ample discourse on climate change and sustainability, boards are still struggling to prioritize these issues on the board agenda. Institutional investors have largely taken up the charge to promote greater focus on environmental, social and governance (ESG) issues at the board and company level. Yet, many boards are still trying to reconcile the relationship between sustainability, strategy, and shareholder value, which can vary significantly from one organization to the next. Where to start?
In this episode, host TK Kerstetter welcomes Tanuja Dehne, board member with Advanced Disposal Services and Granite Point Mortgage Trust, to shed light on this rapidly advancing issue. With a background in the energy sector and a senior advisorship with The B Team, a global nonprofit initiative designed to align the wellbeing of people and the planet with business profitability, Dehne brings an interesting perspective to the board-level discussion.
“[It’s] a prioritization issue for boards,” explains Dehne. “How do you prioritize [ESG] when you’re bombarded with so many issues? Cybersecurity, digital threats, workforce planning issues…how do you get these issues on the board agenda so you can actually talk about them intelligently?”
In her discussion, Dehne frames sustainability within the board’s fiduciary duties–within the board’s existing governance infrastructure. She references a publication which offers an orientation to the topic for boards of directors: Getting Climate Smart: A Primer for Corporate Directors in a Changing Environment. Dehne also offers a three-step recommendation for how boards can better align sustainability with strategy.
A great place [for boards] to start is their long-term planning sessions–their strategy sessions. I think it’s a great opportunity for boards to start to empower their management team–to start asking the questions and to be ‘blue sky’ about it. What are the technological disruptions that are facing our organization? What are the supply chain risks? What are the opportunities? Can we leverage these opportunities? But you can’t ask these questions unless you get educated and understand what questions to ask.