Galway, Ireland–(business wire)– Diligent, a global leader in modern governance and a provider of SaaS solutions in the areas of governance, risk and compliance, finds that 79% of Irish directors use ESG metrics in their operations, according to a new report released today. Not integrated into director remuneration. Audit and ESG and the Irish Board of Directors (IoD) are leading voices in the debate on improving Irish corporate standards.
Current State of ESG Strategy in Irish Boards ESG is becoming increasingly important to Irish boards, according to the report, with 58% indicating oversight is at the board level, up from 46% in 2021. And 23% of Irish boards indicate that they discuss their ESG at every meeting. However, despite ESG being an explicit item on the board agenda, 47% have not set KPIs to measure progress. Most of the organizations that implemented his ESG KPIs said these measures were difficult to implement.
“While we are positive that ESG is becoming more and more important to Irish boards, more needs to be done to ensure that directors are better equipped with the skills and knowledge to oversee ESG functions. I need your support.” Dottie Schindlinger, Executive Director, Diligent Institute“Under increasing pressure from regulators, investors and shareholders, board members and corporate leaders need access to personalized and tailored information to focus on what matters to corporate strategy. ”
Caroline Spillane CDir, Chief Executive Officer, Irish Association of Directors, comment:
“ESG adoption is not only about goals and regulations, but also about values. It is important to understand: This new research reveals how ESG is being considered by boards: Setting realistic and accurate KPIs to measure ESG success or failure is critical in bringing real traction and change in achieving ESG goals.IoD Ireland supports its members on this journey and is committed to furthering its support to assist business leaders on a sustainable path. We will work with the government.”
Among the Top Report findings:
- ESG education desired – One-third (34%) of respondents said they had received ESG director training in the last 12 months, compared to 63% who did not. However, 50% indicated that she plans to conduct ESG director training in the next 12 months. A majority (75%) said ESG skill sets should be shared by all board members.
- Full board oversight of ESG increased – 58% of respondents said their company’s entire board of directors has primary responsibility for ESG oversight, compared to just 46% in 2021. In contrast, 32% of respondents said their CEO oversees his ESG.
- ESG is often discussed – Nearly one-third (31%) of respondents say their board discusses ESG on a quarterly basis, and 23% say ESG is discussed at every board meeting.
- Boards find it difficult to implement ESG KPIs. – 47% of boards have ESG KPIs and 47% do not. Of the companies that set KPIs, 6 out of 10 find it difficult to apply their ESG-related KPIs. This may be due in part to their level of awareness and understanding of current and upcoming legislation.
- Many boards do not integrate ESG KPIs into remuneration – 79% of respondents have not integrated ESG metrics into their executive director remuneration, while 81% have not integrated ESG metrics into senior management remuneration. Nevertheless, 52% and 56% respectively believe that an executive director’s and senior director’s compensation should be tied to his ESG-related metrics.
- Most boards do not incorporate ESG experience into their organizational skill matrix to identify new director candidates. – 29% indicate their organization has ESG expertise when identifying new board members, and 33% indicate it does not currently. This is on the rise among public sector organizations, with 38% flagging ESG skill sets when looking for new directors.
- More Government Support Needed – There is a roughly even split between respondents (49%) who are aware of Ireland’s Circular Economy Act (passed in August 2022) and those who are not (51%). Of those aware, 75% said the Irish government needs to provide more support to businesses to facilitate adoption of the law.
- Some feel that European Union legislation on ESG lacks clarity – Only 21% of respondents rated the EU business understanding of the Sustainability Due Diligence Directive as good/excellent, and 24% rated the EU business understanding of the Sustainability Reporting Directive the same. , assessed 20% of the EU taxonomies for sustainable activities.
Read the full report here.
About reports
The State of ESG Strategies for Irish Boards in 2022 is the second annual research initiative produced by the Diligent Institute, Diligent’s research arm and think tank, and the Institute of Irish Directors (IoD), which leads the debate on improving Irish corporate standards.
The survey for this study was published to Irish Board of Directors (IoD) members between 27th September and 24th October 2022. There were 270 respondents. 74% represent companies based in Ireland and another 6% represent companies in the United Kingdom (UK). 15% and 6% indicated that their companies are located elsewhere in the European Union (EU) and 6% are based outside the UK/EU respectively.
About Diligent
Diligent is a global leader in modern governance, providing SaaS solutions across governance, risk, compliance, audit and ESG. Serving more than 1 million users for more than 25,000 customers worldwide, we empower transformative leaders with technology, insight and confidence to drive greater impact and purpose. lead. For more information, visit diligent.com.
About the Irish IOD
The Board of Directors of Ireland (IoD) is a dynamic network of members drawn from companies large and small in the private, public and non-profit sectors. IoD Ireland is a leading debater on improving corporate governance standards and is dedicated to developing and improving the effectiveness and performance of directors and boards across Ireland. Our main focus is the professional development of our members by providing key services such as: Board services such as the Boardroom Center and Board Evaluation Services. Access to insights and expertise online and in print. Networking opportunities through inspirational events.
For more information, visit iodireland.ie.
