“This year there has been an explosion in terms of formal and informal discussions around the boardroom and ESG,” says Scott Atkinson, partner at Heidrick & Struggles and cohead of its sustainability office. “It [has] definitely been a year where we have been sought out to talk about who might be the additional board member that could come on with ESG experience.
This year is a tipping point to recruit ESG-savvy board members.” As with any issue popping up on the board’s agenda, experts say it’s important to determine whether that topic rises to the level of needing an expert sitting directly on the board as opposed to referring to the C-suite or third parties to provide the expertise. Also, experts warn against naming a director to the board solely because of one narrow skill.
However, directors with ESG experience say demand is flying. “There is a sea change coming,” says Nancy Floyd, founder and managing director of Nth Power, a venture capital firm specializing in new energy technologies. Floyd has served on multiple public and private boards in the clean energy, utilities and communications sectors and was named to the board of Hannon Armstrong Sustainable Infrastructure Capital last week. In the press release describing the appointment, Hannon Armstrong CEO and chair Jeffrey Eckel called her a “true clean energy pioneer.”
“I constantly see posts coming up for board candidates that can bring in ESG expertise, and I’m hearing this networking with CEOs and other directors also,” Floyd says. Still, boards currently do not have an arsenal of ESG experience among directors. According to a January study by New York University’s Stern Center for Sustainable Business, out of 1,188 directors sitting on Fortune 100 boards in 2019, only 29% had relevant ESG credentials. [Emphasis added]Agenda – Boards Boast New Directors’ ESG Expertise