Focus on G, But Keep E at the Forefront: With temperatures continuing to climb globally and stakeholders demanding action, the environment will remain a priority for boards.

• Author: Hayes, Bill
• Position: Governance, environment

The letter G is a wonderful letter. Some of my favorite words begin with it. Gargantuan. Gregarious. Gobsmacked.

But the G word we chose to focus on for this issue is governance, mostly because when we talk about ESG issues for business, governance can get short shrift, with so many zeroing in on the environmental aspects of the term.

But here's the thing: While I hope you enjoyed our focus on the letter G and the very important reasons that it should take center stage in the boardroom, don't forget that the reason E gets so much attention is that the environment is vital to the success of businesses and the continued existence of the planet.

A June 2022 article by World Economic Forum, "Why Sustainability Is Crucial for Corporate Strategy," details the reasons why businesses need to make environmental concerns a part of their strategy. First, investors want it. Consulting firm Gartner found that 85% of investors are considering ESG factors when they decide upon investments. Consumers are also demanding that businesses pay attention to sustainability. For example, 73% of Gen Z consumers in a First Insight survey said they are willing to spend more for sustainable products.

Businesses that skimp on environmental concerns also risk losing the battle for talent. In a Deloitte survey, 49% of Gen Z respondents said they have made career choices based on an employer's strategy not aligning with their personal ethics.

Fortunately, businesspeople are paying attention to the calls for action on the environment and are developing strategies to address the issue. Another Deloitte survey, 2022 Climate Check: Business Views Ahead of COP27, polled 700 executives to learn their top concerns in relation to the environment, the actions they were taking and the strategies they would like to see the government adopt to combat climate change. The survey was conducted in advance of the 27 th Conference of the Parties of the United Nations Climate Change Conference.

A large majority (87%) of respondents to this survey acknowledged that investing in environmentally sustainable practices has long-term economic benefits, and 75% said the reduction of carbon emissions would not hamper the growth of their businesses.

When asked which climate change topics should garner extra attention, 50% of respondents identified climate-related security risks (national and global security risks that are attributed directly or indirectly to changes in climate patterns).

According...