Sustainability expertise in the boardroom: going beyond the tick box exercise

Governance is a key pillar of most sustainability frameworks (Task Force on Climate-Related Financial Disclosures – TCFD; the Task Force on Nature-Related Financial Disclosures – TNFD) or standards (European Sustainability Reporting Standards – ESRS; IFRS Sustainability Disclosures Standards – SDS). One implicit requirement in these frameworks and standards is for directors to upskill and have climate or sustainability expertise. However, upskilling often ends up being a tick box exercise, with the golden ticket being a certificate of attendance of a sustainability or climate training. In this article, we aim to answer the following questions: what does it mean to have sustainability expertise for a business leader? What kind of sustainability expertise is needed in the boardroom?

Sustainability and climate expertise: an implicit requirement

A key feature of climate and sustainability standards and frameworks is a strong emphasis on transparency and disclosures. As such, there is no explicit requirement for the leadership to possess a certain level of skills and expertise on sustainability topics. However, among others, there are requirements to disclose:

  • “how the body(s) or individual(s) determines whether appropriate skills and competencies are available or will be developed to oversee strategies designed to respond to sustainability-related risks and opportunities;” (IFRS S1, para 27 ii)
  • “how the body(s) or individual(s) takes into account sustainability-related risks and opportunities when overseeing the entity’s strategy, its decisions on major transactions and its risk management processes and related policies, including whether the body(s) or individual(s) has considered trade-offs associated with those risks and opportunities;” (IFRS S1, para 27 iv).
  • “the expertise and skills of its administrative, management and supervisory bodies on sustainability matters or access to such expertise and skills.” (ESRS 2, para 20 c).
  • “whether and how sustainability-related performance metrics are considered as performance benchmarks or included in remuneration policies;” (ESRS 2 para 29 c)

Therefore, management needs to have sufficient knowledge and expertise to determine which sustainability skills are needed within the firm, understand how sustainability issues may affect the business model and strategy of the organisation and consider how sustainability performance is measured and can be linked to remuneration components.

Acting as a devil’s advocate on sustainability risks and opportunities

As stated in Taylor III and Kay (2011, p. 224-225), “The most important role for the board in the context of risk management is to act as a devil’s advocate . . . by questioning assumptions of the risk managers and imagining adverse scenarios. Expert directors would enhance this inquisitorial, worst-case brainstorming role, because they intuitively know how to ask the right questions.”[1]

As a director, are you able to act as a devil’s advocate on one or more climate and sustainability issues? We argue that this is the key question that leaders should ask themselves when assessing their sustainability and climate expertise. First, having director who is a sustainability or climate expert is a way to ensure that they are capable of challenging others when it comes to sustainability issues. However, it is even more useful if several directors in the boardroom can do that as directors are not immune to groupthink. According to groupthink theory pioneered by Janis Irving, it may happen that members of a group excessively value the harmony of the group above all, creating a clubby culture where leader’s ideas and suggestions are accepted unchallenged. In the end, “the results are devastating: a distorted view of reality, excessive optimism producing hasty and reckless policies, and a neglect of ethical issues.” (Hart, 1991, p 247)[2]. Groupthink in the boardroom may lead to sustainability-related risks being significantly overlooked or underestimated. To prevent this, a key recommendation is to “formalise the role of the devil’s advocate and rotate this position among group members at each meeting.”[3] Having several board members with sufficient sustainability knowledge to challenge a collective opinion would be highly beneficial.

Second, directors get appointed because they have a wealth of knowledge and experience (finance, operations, strategy, or sustainability) that is valuable for the company. They have specific areas of expertise, and each director brings a unique set of skills and competencies that benefits the boardroom. However, sustainability should not be siloed into a separate function disconnected from the rest of business. The current trend we observe is that sustainability is pervasive and touches on many aspects of the business (operations, strategy, finance, logistics, marketing, etc). It is important to infuse sustainability knowledge across all business functions, with directors leading by example. If a director’s core expertise is in finance, it would be key for them to understand how different sustainability-related issues may impact the financial performance and position of the company.

Diversity of sustainability expertise and diversity in the boardroom

Sustainability is a very broad topic, often captured through the Environmental, Social and Governance (ESG) Framework. Topics include climate change, nature and biodiversity, pollution, human rights, local communities, diversity and inclusion, gender pay gap, etc. However, generally only a certain number of these topics are deemed material, i.e. that they matter most to a business and its stakeholders. Facilitating discussions regarding the material sustainability topics among board members is likely improve risk management and encourage strategic insights within the boardroom.

Many sustainability issues are also interrelated. For instance, not only does deforestation affect climate change as trees sequester carbon, but preserving forests often also involve engaging with the local communities, like in Australia with First Nations Peoples. By developing a holistic approach to sustainability, governance bodies would enhance the effectiveness of the sustainability strategy by tackling several related sustainability issues at once and refine their risk management analysis by better grasping systemic risks. One way to achieve this objective is to equip every member of the board with at least some basic knowledge on all sustainability topics that are material for the organisation. By doing so, directors would be likely to grasp the connections between sustainability topics and holistically approach sustainability strategies, risks and opportunities.

Some academic studies highlight that diversity of backgrounds have positive effects when it comes to sustainability. For instance, UK companies with a non-accounting female expert in their audit committee tend to have enhanced carbon disclosures.[4] French companies with a foreign director tend to have better carbon emissions performance and carbon disclosures. [5] Diversity is not only a sustainability topic on the board’s radar but should also be reflected in the board composition to better tackle sustainability challenges.


[1] Taylor III, P. L., & Kay, H. L. (2010). A green board as a climate-change imperative: Appointing a climate-change expert to the audit committee. U. Balt. J. Envtl. L.18, 215.

[2] Paul’t Hart. (1991). Irving L. Janis’ victims of groupthink. Political Psychology, 247-278.

[3] O’Connor, M. A. (2002). The Enron board: The perils of groupthink. U. Cin. L. Rev.71, 1233 as cited in Taylor III, P. L., & Kay, H. L. (2010). A green board as a climate-change imperative: Appointing a climate-change expert to the audit committee. U. Balt. J. Envtl. L.18, 215.

[4] Abbasi, K., Alam, A., Bhuiyan, M. B. U., & Islam, M. T. (2024). Does female director expertise on audit committees matter for carbon disclosures? Evidence from the United Kingdom. Journal of International Accounting, Auditing and Taxation55, 100618.

[5] Mardini, G. H., & Elleuch Lahyani, F. (2022). Impact of foreign directors on carbon emissions performance and disclosure: empirical evidence from France. Sustainability Accounting, Management and Policy Journal13(1), 221-246.