Ireland’s top firms focusing more on ESG issues

Study by Spencer Stuart finds 40% of top Iseq-listed companies now have specifically dedicated ESG or sustainability committees

Ireland’s biggest companies are increasingly prioritising environmental, social and governance (ESG) issues, recognising it as a key performance indicator, a new study has indicated.

According to US recruitment firm Spencer Stuart, some 40 per cent of top Iseq-listed companies now have specifically dedicated ESG or sustainability committees.

The 2022 Ireland Spencer Stuart Board Index analyses board governance practices in the Iseq 20 index, which comprises the 20 largest companies trading on the Euronext Dublin exchange by trading volume and market capitalisation.

It found that 50 per cent of Iseq 20 companies now included ESG metrics in remuneration policies for executive directors, while a further 15 per cent of companies have indicated they would be revising their policies to include ESG metrics by the end of this year.

READ MORE

The study also found that two-thirds of these companies now have an executive specifically dedicated to leading sustainability. Of the eight boards with an ESG or sustainability committee, five were newly-established in 2021 or early 2022.

“While ESG has been an established part of the board agenda for a while, the year-on-year changes in the data reflect a significant growth in the efforts being made to address ESG, and specifically sustainability at a board level,” said Spencer Stuart’s managing partner Ruth Curran.

“Critically, we’re seeing that awareness and understanding of sustainability issues is now a core competency for boards,” she said.“ Companies are bringing fresh talent into both their executive and non-executive director roles and linking executive remuneration to delivery in this area. This is a trend we expect to continue in the coming years. This will be critical to delivering genuine ESG impact.”

The report also highlighted an increase in the appointment of new directors, reflecting what it described as “the refresh in board approaches in the past 12 months”. It said 85 per cent of Iseq 20 companies appointed at least one new director to the board during the survey period, a notable increase from the 55 per cent of boards recording a new director a year earlier.

In terms of broader board diversification, the proportion of women directors across the Iseq 20 rose by 10 per cent from last year. Women, it said, now represented 33 per cent of all board members, with each board in the Iseq 20 having at least one woman, and 55 per cent of boards having at least 30 per cent women.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times