Boards may choose to establish subject-specific committees beyond the three core committees (audit, remuneration, and nomination) as an indication of the topic’s strategic significance, as a means of providing a deeper level of oversight, or to comply with sector-specific regulatory requirements (e.g. banks and risk committees).
The impact of business on society and the natural environment is a high-profile and urgent topic. Certainly, boards in some sectors have long had committees addressing environmental, social and governance matters (collectively now referred to as ESG). However, boards across all sectors are now responding by establishing committees covering topics such as sustainability, climate change, decarbonisation, human rights, labour standards, good citizenship, workforce engagement, and diversity, equity and inclusion. Regulators, investors, and customers are also increasingly holding companies to account for their behaviour and impact.
Breakdown of sustainability-related committees
(top 150 FTSE companies)
| Name |
Count |
| Corporate social responsibility
|
16 |
| Sustainability
|
19
|
| ESG
|
11
|
In our sample, there are 46 boards with committees specifically to oversee environmental and social topics, 15 more than last year. Among these 15, nine are newly constituted committees (AstraZeneca, Barratt Developments, Future, Howden Joinery, Johnson Matthey, Phoenix, Rightmove, Unite and Wizz Air). IAG has expanded the scope of its former safety committee to address “safety, environment and corporate responsibility”. The other five committees are at companies that joined our sample this year: Endeavour Mining, Watches of Switzerland, Ninety One, Big Yellow and Mediclinic International.
For the purposes of this survey, we have divided these 46 committees into three categories: ESG, sustainability, and corporate social responsibility.
ESG committees
Eleven boards have an ESG committee, five more than in the previous year. Of these, three are new constituents (Endeavour Mining, Mediclinic International and Watches of Switzerland). British Land renamed its corporate social responsibility committee to ESG after our cut-off date.
Most ESG committees have been included in the board’s governance framework over the past two years. The main duties of the ESG committees in our sample are: (i) ensuring ESG targets and metrics are aligned with the company strategy, and (ii) sharing the responsibility of overseeing compliance with ESG reporting standards and risk management with the audit committee.
Chairs of ESG committees are mostly women (82%), and no chair has self-identified as having a minority ethnic background.
Sustainability committees
Sustainability and corporate social responsibility committees also appear as part of governance frameworks covering similar topics as ESG committees.
13% (19) of boards have a sustainability committee and combine their sustainability and environment mandates (94%), mostly with community and citizenship duties (47%).
Corporate social responsibility committees
11% (16) of boards have a corporate social responsibility committee; the most commonly seen element of their remit is stakeholder management and engagement (50%).
Remuneration
Chairs of sustainability committees receive, on average, a higher fee (£22,419) than corporate social responsibility committee chairs (£20,556) and ESG committee chairs (£16,896).
The full list of committees, the number of meetings, and fees for each FTSE 150 company can be viewed in our searchable committees table.