Sustainability committee
Practical Law ANZ Glossary w-036-9899 (Approx. 3 pages)
Glossary
Sustainability committee
A committee of a company's board of directors (sometimes referred to as an environmental, social and governance (ESG) committee or a corporate social responsibility committee) that focuses on the company's sustainability strategy, performance and policy.
While the responsibility for a company's sustainability strategy, performance and policy ultimately rests with the directors, establishing a separate sustainability committee is viewed as being an effective tool to:
- Oversee and advise the board on the company’s goals, strategies, and commitments related to sustainability and ESG, including climate risks and opportunities, human rights and human capital management, community and social impact, and diversity and inclusion.
- Approve and oversee implementation of sustainability policies.
- Monitor the company’s performance related to its sustainability and ESG goals, strategies, and commitments.
- Review and oversee the policies and procedures used to prepare sustainability and ESG-related statements and disclosures, including preparation of the company’s annual report, and review such statements and disclosures before their publication.
The ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (4th edition) do not specifically recommend that Australian companies have a sustainability committee. However, listed companies may, as a matter of best practice, elect to form a sustainability committee as part of their corporate governance framework. If they do this, it is also best practice that the sustainability committee has a charter that clearly sets out its role and confers on it the necessary powers to perform its role.
For:
- More information about sustainability committees, see Practice note, Sustainability committees and for a standard form sustainability charter, see Standard document, Sustainability committee charter.
- A guide to Practical Law Australia's resources relating to ESG, see ESG and sustainability toolkit (Australia).
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