A FTSE FLEDGLING Company Secretary writes...
We are looking to establish a separate ESG Board Committee but are undecided how the Committee should be set up. At the moment we have a lot of content for the Environmental part but not a lot for Social and Governance (as these fall under the remit of other Companies). Consideration was given to having a just a Sustainability Committee but feel an ESG Committee would be better. Please could people tell me how they have set up their ESG Committees (or equivalent).
We have a Sustainability Committee, but rather than a Board Committee, ours is structured as an Executive Committee albeit that it is chaired by a NED.
We are FTSE250 with a very strong ESG ethos. We do not have a formal board committee, but keep matters within a management committee chaired by the Co Sec/GC. Updates are provided at every board meeting via the Co Sec Report.
Suggest you review this guidance from the CGIUKI: https://www.cgiglobal.org/climate-change-knowledge-centre-for-governance-professionals/guidance/terms-of-reference-for-the-sustainability-or-esg-committee/
We do have a sustainability committee. We changed the name overtime but we settled on sustainability.
As formal committees of the board we try and keep it tight and therefore have only what is required by the UKCGC – Remuneration, Audit (and Risk), and Nomination. We don’t therefore have an ESG committee as a formal committee of the board (and don’t see the need for one). We have a forum of executive team members that focusses on the various topics that come under the ESG umbrella, and that reports up through existing reporting channels (i.e. through the executive directors) to the Board
We set up our ESG committee as part of our risk management framework, it is therefore another functional risk committee, operating in the same way as other functional risk committee e.g. health and safety, capital, HR…etc. Staffed by management, who then report to overall risk committee twice annually, which then reports to Audit Committee, which then report to Board.
Do you want to give me a call – I am not sure why you think ESG (Environment, Society and Governance) is different from Sustainability? We have a committee but it was only set up in the middle part of 2024 prior to which we ran it as a management committee that submitted reports directly to the Board.