Nine in 10 FTSE 100 firms employ ESG or sustainability chief

Ninety per cent of the UK’s largest firms now employ a head of ESG or sustainability, whereas very few had the equivalent only four years ago, according to a new report.

Half of corporate affairs directors surveyed said they had responsibility for ESG (Image: Thithawat_s via Getty)
Half of corporate affairs directors surveyed said they had responsibility for ESG (Image: Thithawat_s via Getty)

The study, by executive search firm Odgers Berndtson, looked at the huge shift in priorities for FTSE 100 companies and its impact on the role of corporate affairs executives.

The report, entitled 'Unlocking the Route to the Board Table', quizzed about half of FTSE 100 corporate affairs chiefs, discovering that nine out of 10 such firms now employ a head of ESG or equivalent. This compares to a similar study in 2017, which found only a small number then had chief sustainability officers.

More than half (51 per cent) of the corporate affairs directors surveyed in the new study said they had responsibility for ESG.

About half said they had leadership of the ESG agenda, while working with stakeholders across the executive committee. In other cases, the leadership of the technical and operational ESG agenda was handled by a chief sustainability officer who had a seat on the executive committee.

And in some, responsibility was split across members of the executive committee with joint board reporting.

But there were mixed views when it came to whether the corporate affairs function should lead ESG directly.

On the positive side, one respondent said: “This falls into corporate affairs as it tends to be where the challenging questions no one knows what to do with sit!”

Another said: “Concern is largely around reputation management, and license to operate, therefore this sits in corporate affairs.”

However, other corporate affairs bosses disagreed. “If ESG sits in a function responsible for reputation it says all the wrong things about a business' intention,” argued one. Another said: “ESG needs to drive conversations around a broad range of business and financial issues. This is a challenge that needs a strong strategy skillset, not corporate affairs.”

The survey found it was stakeholder pressure that was forcing ESG up the agenda, with 60 per cent of corporate affairs bosses saying investors were placing the most pressure on corporate ethics, followed by employees (40 per cent), consumers (30 per cent) and government (25 per cent).

Commenting on the report, Jenny Scott, founding partner of Apella Advisors, and former director of communications for the Bank of England, said: “The role of a corporate affairs director is to hold up a mirror to business and challenge critical decisions. With the rise of ESG, these have increasingly become issues of morality."

She added: “ESG presents a huge opportunity for corporate affairs directors to raise the profile and reputation of a profession, which has too long been tainted by unhelpful ‘spin’ language and bad corporate behaviour. It is impossible to find someone who has all the answers.”

A full version of the report can be downloaded here.

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