by Michael Connor
Boards of directors of a majority of large U.S. corporations now have committees charged with oversight of environmental and social issues, but that oversight is often not integrated into the companies’ strategic planning and operations, according to a new research study.
The study, conducted by Calvert Asset Management and The Corporate Library, also found that boards at smaller companies are far less likely to have committees charged with oversight of corporate responsibility issues.
Some 65% of the Standard & Poor’s 100 companies have board committees with oversight of corporate responsibility issues, according to the findings. In contrast, only 8% of Russell 3000 companies have a committee whose name suggests oversight of environmental and social matters.
Even where oversight exists, the study found, environmental and social factors are often not fully integrated into a company’s strategic planning and operations.
“Fewer than half of these committees (at S&P 100 firms) require their directors to monitor and make forward-looking recommendations about sustainability trends, strategies, or targets; only about a quarter are responsible for environmental and social risk management; and even smaller numbers involve boards in oversight of corporate responsibility-related stakeholder engagement, incident readiness, or reporting,” the study said.
The environment was the primary issue cited by S&P 100 companies with board oversight of corporate responsibility issues, with 74 percent of the firms citing it as part of a committee charter. Human rights was the issue cited least, with 11 percent citing it as part of a committee charter.
The study also found that backgrounds of directors serving on committees with oversight for environmental and social issues “differ from the wider pool in that they are disproportionately female: 25% of the committee members are women, compared to 18% of all S&P 100 directors.” The report said the significance of that finding “is undetermined, and warrants further study.”