There are several critical components to a successful corporate strategy including but not limited to financial oversight, risk management, innovation and stakeholder engagement. However, increasingly, sustainability has become a key part of decision-making in the boardroom. A survey conducted by Deloitte on C-Suite Executives perception of sustainability in the workplace indicated that a large majority (over 70% in most cases) were feeling pressure from various stakeholders to act on climate-related issues. Additionally, regulatory expectations continue to rise globally and public scrutiny on corporate sustainability keeps intensifying. These are just a few amongst the many reasons why sustainability training for directors has become a strategic necessity for organisational success.
The Need for Sustainability Training at the Board Level
In a report released by Heidrick & Struggles, INSEAD and BCG, an overwhelming 89% of directors stated that they obtain their environmental, social and governance (ESG) information solely from management updates. This also extends to recruitment practices where nearly half (48%) of respondents admitted sustainability knowledge features either "not at all" or just "slightly" in their board selection criteria. There is a significant knowledge gap on sustainability amongst C-Suite executives. This underscores the urgent need for targeted training programmes to enhance directors' competencies in sustainability.
Benefits of Sustainability Training for Directors
Investing in sustainability training for directors can result in several strategic advantages:
Strategic Decision-Making: Directors equipped with sustainability knowledge can better identify and leverage opportunities that align with ESG criteria, especially in light of increased regulations on sustainability reporting. Being knowledgeable about relevant sustainability laws and requirements would support an integrated approach to corporate growth ensuring financial and non-financial performance are connected.
Risk Mitigation: Understanding sustainability risks enables boards to proactively address potential challenges, from regulatory compliance to reputational concerns. This could help safeguard the organisation's interests in the long run. The Harvard Law School Forum on Corporate Governance emphasises in their paper “The Board’s Role in Sustainable Leadership” that sustainable practices contribute to improved financial performance and risk management.
Improved Stakeholder Relations: Demonstrating a commitment to sustainability enhances trust and credibility with investors, customers and regulatory bodies. This strengthens the organisation's social value amidst the broader community.
Regulatory Compliance: Sustainability reporting has become increasingly mandated around the world; hence trained directors who understand the essentials of sustainability can ensure that their organisation meets legal requirements. This will help reduce the risk of penalties and legal challenges.
Related Insight: 5 Benefits of Sustainability Training
The Role of Directors in Championing Sustainability
Directors play a pivotal role in embedding sustainability into the corporate ethos. Their responsibilities include:
Setting the Tone at the Top: Directors who make sustainability a priority signal its importance throughout the organisation, influencing culture and operations.
Integrating ESG into Corporate Strategy: Boards are tasked with ensuring that sustainability considerations are woven into the fabric of business strategy, aligning with long-term objectives.
Oversight of Sustainability Performance: Regularly reviewing sustainability metrics and holding management accountable for ESG goals ensures continuous improvement and transparency.
How to Implement Effective Sustainability Training for Directors
Developing strong sustainability competency at board level demands strategic planning. Here are key steps to take when developing a customised sustainability training for directors.
1. Start with a Knowledge Assessment
The foundation of any effective training programme lies in understanding the current capabilities of board members. Conducting diagnostic interviews can help identify knowledge gaps and uncover how directors perceive sustainability issues. A materiality assessment is also essential as it helps highlight the environmental and social factors that matter most to the business and its stakeholders.
Key questions to consider include:
- How many board members have a solid grasp of key sustainability issues impacting the organisation?
- Are directors aware of their legal responsibilities when it comes to ESG due diligence and disclosure?
2. Tailor Training to the Board’s Needs
Once the gaps are identified, it’s critical to design a bespoke training programme. A one-size-fits-all approach rarely works. Board training should be specific, targeted and relevant to both the organisation’s industry and its geographic footprint.
Effective training programmes are:
- Structured around the business’s operating regions and sector-specific challenges.
- Focused on board-level concerns such as climate risk, biodiversity loss or emerging ESG frameworks
- Thorough enough to provide clarity on legal and regulatory obligations such as CSRD
In-depth sessions delivered by internal or external sustainability experts can offer technical depth where needed. Additionally, setting up an ESG governance framework ensures responsibilities are appropriately assigned and embedded into the organisation’s structure.
3. Prioritise Ongoing Learning
Sustainability and ESG landscapes are rapidly changing, with new legislation and standards emerging regularly. Board members must adopt a mindset of continuous learning to keep pace. In many cases, professional associations now mandate ESG training as part of ongoing board education. Regular engagement with stakeholders, such as investors, regulators and customers, also helps directors stay attuned to changing expectations.
4. Track Progress and Impact
To ensure training is delivering value, companies should establish clear metrics to monitor effectiveness and return on investment. These might include:
- Tracking reductions in carbon footprint following implementation of board-led sustainability initiatives
- Observing whether sustainability is increasingly discussed in board meetings and decision-making processes
- Scheduling follow-up training or refreshers 6 to 9 months after the initial sessions
- Using dashboards with sustainability KPIs to assess ongoing performance and strategic alignment
Related Insight: 5 Things to Track When Engaging Staff in Sustainability Training
The Bottom Line
Thanks to the adoption of numerous sustainability targets and compliance requirements across various sectors, progress in sustainability initiatives is becoming synonymous with corporate resilience and success. With the right training, boards are better equipped to manage risks, seize opportunities, and lead their organisations toward long-term responsible growth.