Amid ongoing volatility, boards are continuing to address an evolving risk landscape and contend with pushback on how environmental, social, and governance (ESG) risk factors should be addressed. While oversight of enterprise risk management is part of the board’s mandate, executing that remit has become a delicate balancing act.
As Blackrock CEO Larry Fink wrote in his 2023 letter to investors, many clients “want access to data to ensure that material sustainability risk factors that could impact long-term asset returns are incorporated into their investment decisions.” However, companies have also faced an increase in anti-ESG shareholder proposals, and Fink stated in June, “I’m not going to use the word ‘ESG’ because it’s been misused” for political gain. Despite “ESG” perhaps becoming a loaded term, it’s critical that directors not overlook material ESG risk factors.
BDO conducts periodic surveys of public company board directors to understand what they’re seeing in terms of emerging trends, significant risks, and opportunities, as well as how they are preparing to address them. Our latest Spring 2023 BDO Board Pulse Survey highlights several evolving risk areas…
