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Overview
As ESG considerations grow in complexity and significance, so does board oversight of this evolving topic. First things first — is there a difference between ESG and sustainability? Yes—but...we use the term “sustainability” in this guide largely interchangeably with “ESG,” though with a nuance: ESG refers to the set of specific environmental, social and governance topics, whereas sustainability focuses on how those topics connect to a company’s long-term resilience and value creation.
So how can boards provide leading edge sustainability oversight in 2025? By evolving from treating it as a peripheral concern to embedding it into core governance and strategy. PwC’s updated guide provides directors with a practical roadmap for transforming ESG oversight into a competitive advantage and source of long-term enterprise value. Here’s what to keep in mind:
Navigating a shifting sustainability landscape
Investor expectations are maturing, societal pressures are intensifying and the ESG regulatory environment is growing more fragmented. Boards can help companies focus on the sustainability issues that most impact long-term value — those with financial implications, reputational stakes and exposure to external volatility. Clear prioritization and scenario analysis enable companies to remain agile and relevant in a dynamic risk landscape.
Deepening board-level ESG oversight
Effective oversight starts by embedding ESG into strategic planning, risk management and performance monitoring. Boards can push for full-cost capital allocation, align sustainability and financial KPIs, and link ESG goals to executive compensation. Oversight also includes asking the right questions — about scenario assumptions, data quality and trade-offs — helping to treat sustainability with the same rigor and importance as any core business issue.
Structuring governance for impact
Strong sustainability oversight can be created through clarity in board and committee roles, integration of sustainability into governance frameworks and accountability across the management team. Boards can start by assessing their own ESG expertise, prioritizing sustainability on every agenda and pushing for cross-functional execution led by empowered senior leaders. A clear governance structure signals to stakeholders that ESG is not just an aspiration — it’s a business imperative.
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