ESG in the Bank Boardroom 2022

ESG in the Bank Boardroom 2022

By Byron Loflin, Global Head of Board Engagement, Nasdaq

The question of how three words—environmental, social and governance—became fused as the acronym ESG is often raised. Within the last five years, ESG has emerged among the top 10 corporate-governance priorities within most corporate boardrooms globally. Some boards have gone as far as adding a new committee or changing the name of a standing committee to ESG. So, it is important to add context to this impactful change and relate it to the progressions that have brought ESG into the forefront of corporate-governance discussions as we enter 2022.

With the understanding that finance powers the global economy, the goal is to provide insight for bank leaders and board members about the history and potential impact of ESG in the boardroom.

Corporate governance’s history in brief

We are presently in the third phase of modern corporate-governance evolution. The first phase was the Industrial Revolution and the advent of stock ownership that led to the Banking Act of 1933. The second was the evolution of corporate governance from the 1930s through the financial crisis of 2008-09. The third phase, where we find ourselves currently, began as the world emerged from that financial crisis. During