Around 54 per cent of FTSE 100 companies now have an ESG committee at board level as they join the global push for corporate responsibility, shows new research by Mattison Public Relations.
According to Mattison Public Relations, along with the board committees that FTSE 100 firms are required to have under the UK Corporate Governance Code, such as the audit, remuneration, and nominating committees, an ESG committee is becoming a more frequent presence on FTSE 100 boards.
A larger pool of investors might be advantageous for businesses with strong ESG credentials. This raises their qualification for ESG-focused funds, enhancing share liquidity and bolstering share prices.
Mattison Public Relations director Maria Hughes says: “FTSE 100 companies are taking big steps towards addressing their responsibilities on ESG. UK plc is showing its commitment to tackling climate change and reducing its impact on the broader environment.”
“If you are a FTSE100 company without an ESG committee at board level then you are now in a shrinking minority.”
According to Mattison Public Relations, corporations that create ESG committees are demonstrating their commitment to achieving the 2050 Net Zero goal of the government. According to recent study, the UK’s top corporations are taking Net Zero more seriously than ever before, with 82 per cent of the FTSE 100 constituents stating their Net Zero objectives to shareholders.
Oil, gas, and mining companies in the FTSE 100 index all have ESG committees on their boards, making up 100 per cent of the index’s companies with such committees. This includes significant producers of oil and gas like BP and Shell as well as mining firms like Anglo American, BHP, Glencore, and Rio Tinto.
ESG committees are present in only 13 per cent of the FTSE 100 businesses that provide non-bank financial services, including insurers, asset managers, and retail investment platforms.
“Sectors with low environmental impacts and no ESG committee are missing an easy opportunity to improve their ESG credentials.”
Hughes says: “Companies that are improving their ESG performance are doing so by setting Net Zero goals, reducing their emissions and investing in carbon offsets. An ESG committee facilitates the improvement of their ESG performance.”
ESG committees are present in 54 FTSE 100 businesses, and in 56 per cent of those, non-executive directors make up the whole membership.
According to Mattison Public Relations, the large number of non-executive directors on FTSE 100 ESG committees enables businesses to add directors to their boards who have experience in ESG. Additionally, it enables them to more independently monitor the company’s ESG performance.
Hughes adds: “Companies which have ESG committees made up entirely of independent non-executive directors allows the committee to provide constructive feedback and scrutinise the ESG programme of the company they work for.”
*As of July 2022. ESG Committee also described as Corporate Responsibility Committee, Responsible Business Committee, Sustainability Committee and Environments & Communities Committee.
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