{"id":14115,"date":"2023-10-12T10:47:14","date_gmt":"2023-10-12T10:47:14","guid":{"rendered":"https:\/\/www.esgtoday.com\/?p=14115"},"modified":"2023-10-12T10:47:14","modified_gmt":"2023-10-12T10:47:14","slug":"less-than-1-in-3-boards-have-a-strong-understanding-of-esg-risks-affecting-their-companies-pwc-survey","status":"publish","type":"post","link":"https:\/\/www.esgtoday.com\/less-than-1-in-3-boards-have-a-strong-understanding-of-esg-risks-affecting-their-companies-pwc-survey\/","title":{"rendered":"Less Than 1 in 3 Boards Have a Strong Understanding of ESG Risks Affecting Their Companies: PwC Survey"},"content":{"rendered":"<!--themify_builder_content-->\n<div id=\"themify_builder_content-14115\" data-postid=\"14115\" class=\"themify_builder_content themify_builder_content-14115 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n\n\n<p>More than two thirds of corporate boards lack a strong understanding of the ESG risks affecting their companies, including only a quarter that report having a strong grasp of carbon emissions and even fewer on their companies\u2019 climate risk or strategy, according to the new U.S.-focused Annual Corporate Directors Survey released by global professional services firm PwC.<\/p>\n\n\n\n<p>For the study, PwC surveyed more than 600 directors of public companies in the U.S., across more than 12 industries. 73% of those surveyed represent companies with revenues greater than $1 billion, and 64% have served on their boards for more than 5 years.<\/p>\n\n\n\n<p>The survey found that U.S. board members have seen a modest reduction in focus on ESG issues, in a year marked by continuing geopolitical turmoil, and with building political pressure pushing back on investors for their perceived \u201cESG agenda.\u201d Even with these pressures, however, more than half of directors surveyed (52%) said that ESG issues are regularly a part of their boards\u2019 agendas, down slightly from 55% last year, but remaining well above 34% reported by directors in 2019, and 54% continued to report that ESG issues are linked to their companies\u2019 strategy, compared to 57% last year.<\/p>\n\n\n\n<p>Female directors were found to more likely view ESG issues as tied to company strategy, with 67% reporting this link, compared to 51% of male directors. Similarly, 61% of female directors surveyed said that they believe that ESG issues have a financial impact on company performance, compared to only 35% of male directors who agreed with this startement.<\/p>\n\n\n\n<p>While most boards continue to discuss and link ESG issues to corporate strategies, however, a large majority admit to lacking a strong understanding of key sustainability-related matters. Only 31% of survey respondents reported that their boards understand ESG risks \u201cvery well\u201d as they relate to their companies, while 42% reported this level of understanding of their companies\u2019 overall ESG strategy, and only 27% for ESG opportunities.<\/p>\n\n\n\n<p>While directors appear to have a stronger grasp of ESG-related issues such as \u2018talent and corporate culture\u2019 and \u2018data privacy\/cybersecurity,\u2019 with 52% and 45% reporting understanding these very well, respectively, only 26% claimed this level of understanding for carbon emissions, and 20% for climate risk and strategy.<\/p>\n\n\n\n<p>The report examined the ESG-related issues that are currently receiving the most boardroom attention, with talent management and data security topping the list, with over 90% reporting that each of these topics have been discussed by their boards \u201csomewhat\u201d or \u201csubstantially\u201d over the past year. Key sustainability-related topics are less frequently on the agenda, however, with only around half (49%) reporting having discussed climate change, 43% discussing environmental remediation, and only a third of boards discussing human rights.<\/p>\n\n\n\n<p>One area in which directors signaled significant improvement was readiness for ESG-related reporting, with 51% of respondents reporting that their boards are sufficiently prepared to oversee mandatory ESG disclosures, compared to only 25% in last year\u2019s survey.<\/p>\n\n\n\n<p>The report also found strong support amongst board members for tying executive compensation to non-financial metrics, with only 7% saying that compensation should be linked only to financial performance. 44% of respondents said that executive compensation should be tied to diversity, equity and inclusion metrics, and 31% to environmental goals.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.pwc.com\/us\/en\/services\/governance-insights-center\/library\/annual-corporate-directors-survey.html\">Click here<\/a> to access PwC\u2019s 2023 Annual Corporate Directors Survey.<\/p><span class=\"et_bloom_bottom_trigger\"><\/span>","protected":false},"excerpt":{"rendered":"<p>More than two thirds of corporate boards lack a strong understanding of the ESG risks affecting their companies, including only a quarter that report having a strong grasp of carbon emissions and even fewer on their companies\u2019 climate risk or strategy, according to the new U.S.-focused Annual Corporate Directors Survey released by global professional services [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":14116,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[6,39],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8.1 - 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