More than half of S&P 500 company boards are providing oversight of environmental and/or social issues beyond what required by law, a new study shows. Board Oversight of Sustainability Issues finds that many industries subject to scrutiny – paper, forestry, healthcare, utility companies – are among the most likely to adopt these practices, while the retail sector lags despite criticism for recycling and labor and human rights practices.
The study was commissioned by the Investor Responsibility Research Center Institute (IRRCi) and conducted by the Sustainable Investments Institute (Si2).
Little research has been little research focused on how boards oversee a company’s sustainability efforts, despite the heightened awareness and reporting of corporate sustainability issues, the study’s organizers say.
The report identifies key trends on issues and industries, which seem to be a direct reflection of public scrutiny and industry risk exposure.
Among the findings:
• Boards of 55.4 percent of S&P 500 companies have explicit oversight responsibilities for social and/or environmental issues.
• About a third of the companies with board level oversight of sustainability issues have assigned that responsibility to the Corporate Governance and Nominating Committee (34 percent) and about the same amount assigns it to a Public Affairs or Sustainability Committee (32 percent).
• Social issues (55 percent) were more often covered by board oversight structures and policies than environmental topics (33 percent).
• Most companies with board oversight of sustainability issues have established independence standards for those committees (81 percent) and permitted them to hire outside counsel, advisors and experts at their sole discretion (92 percent).