At Climate & Sustainability Leadership, Henning Stein and Helle Bank Jørgensen stress the vital role of corporate boards in integrating sustainability for long-term business success.
As the world confronts the escalating climate crisis and the evolving demands of Environmental, Social, and Governance (ESG) standards, corporate boards are emerging as critical drivers of sustainability. At the 2024 Climate & Sustainability Leadership Summit, Henning Stein of 1BusinessWorld and Helle Bank Jørgensen, Founder and CEO of Competent Boards, take the stage to discuss the vital role boards must play in leading global environmental efforts. Their conversation focuses on the ethical, strategic, and financial responsibilities boards must now assume to ensure both organizational success and the planet’s long-term viability.
Bold Ideas and Urgency in the Air
Stein opens the discussion by emphasizing the significance of the moment. "New York Climate Week is not just another event—it’s the time and place to push bold ideas into real action," he states. Jørgensen adds, "New York has a unique energy, where bold thinking meets practical action. This week is critical, not just for discussion but for implementing meaningful change."
Their dialogue highlights how corporations are increasingly viewed as key players in addressing climate challenges. With regulatory expectations rising and investor pressure mounting, boards are being called upon to move beyond their traditional oversight role and become true stewards of sustainability.
Closing the Sustainability Competency Gap
A major challenge highlighted by Jørgensen is the lack of sustainability knowledge on corporate boards. Drawing from research done in collaboration with Copenhagen Business School, Jørgensen shares a concerning statistic: "Only 2% of Fortune 500 boards in the U.S. and Europe have strong sustainability expertise." This disconnect between a company’s ESG aspirations and its board’s competencies is alarming, especially when the decisions made at this level have lasting environmental and financial consequences.
"Without the right expertise, boards are essentially flying blind," Jørgensen warns. She underscores the need for board members to equip themselves with the necessary knowledge to drive informed decision-making. "You can’t make informed decisions without being informed," she asserts, pointing to the growing trend of boards turning to programs like Competent Boards to close this competency gap.
Navigating ESG Pushback
The conversation also touches on the recent backlash against ESG initiatives in various industries. Stein points out that some sectors, like technology, are facing short-term challenges in meeting sustainability targets while balancing other priorities. He observes that many boards are grappling with the tension between immediate pressures and longer-term sustainability commitments.
Jørgensen addresses this issue head-on: "Pushback can be constructive when it forces companies to align their promises with reality." She emphasizes the importance of grounding ESG efforts in clear, measurable outcomes that align with business performance. "Sustainability isn’t about political correctness or trends," Stein adds. "It’s about long-term risk management and business viability."
The Strategic Imperative for Sustainability Leadership
Jørgensen stresses that sustainability is no longer optional—it is a strategic imperative. Boards must consider how their companies not only contribute to climate change but how they will be impacted by it. "This is about risk, opportunity, and resilience," Jørgensen notes.
She highlights how industries like insurance and finance are already integrating climate risk into their models. "When homeowners can’t get insurance because of climate-related risks, or when companies face stranded assets due to shifting regulations, sustainability becomes a financial issue, not just an ethical one."
A Call for Proactive Leadership
Stein closes the session by calling for more proactive board leadership. "Boards need to be stewards of the future, ensuring both profitability and the long-term health of the planet," he says. He advocates for governance structures that prioritize systemic, long-term thinking over short-term gains.
Jørgensen echoes this sentiment, urging board members to embrace their roles as leaders in global sustainability. "We have the knowledge, we have the foresight—now we need to act," she asserts. Her message to business leaders is clear: Incremental change is no longer sufficient. Boards must take the lead in embedding sustainability into the core of their companies.
The Board’s Crucial Role in Shaping the Future
Stein and Jørgensen’s discussion makes one thing clear: The boardroom has become a critical battleground in the fight against climate change. As sustainability becomes central to corporate governance, boards must transition from traditional oversight to active leadership. By making informed decisions, managing risks strategically, and embracing sustainability as a core business value, boards can drive both environmental progress and economic resilience.
The session concludes with a strong call to action for boards worldwide: Take sustainability seriously, close the knowledge gap, and lead your organizations toward a future where both the planet and profits can thrive.
