Over 92.5% of companies listed on the Governance FTSEMib have established a committee focused on sustainability.
In a significant stride towards environmental transition and social responsibility, 82% of FTSE MIB companies in Italy have established sustainability committees as part of their corporate governance structures [1]. This move underscores a strong institutional recognition and formal integration of sustainability issues at the board level in the majority of Italy's largest listed companies.
One of the notable companies leading the way is Poste Italiane, which has applied sustainability principles across asset management and insurance sectors, integrating climate risk analysis and ESG strategies actively [3]. The FTSE MIB ESG Risk-Adjusted Index also reflects an increasing market focus on improving ESG characteristics while maintaining financial performance [5].
However, despite the widespread formal establishment of sustainability committees, research indicates skills gaps among board members related to ESG competencies [1]. Many board members still lack sufficient expertise in areas such as climate risk assessment, sustainability strategy, and socio-environmental impact measurement. This gap limits the effectiveness of ESG integration at the board level despite committee formation. Key skills deficits often involve technical knowledge of environmental policies, social governance frameworks, and how to embed these into business strategy and risk management comprehensively.
Matteo Pedrini, an industry expert, has highlighted the urgency to integrate sustainability into business models and operating methods to achieve environmental transition and social responsibility goals [4]. He describes the situation of skills being absent or not widely spread in boardrooms as "alarming."
The "Governance of Sustainability" Observatory, a body that focuses on corporate governance, aims to monitor the integration of sustainability into corporate governance in Italy and Europe [2]. An analysis of over 2,500 CVs of board members shows a skills gap in Italy.
On a positive note, the percentage of companies with an exclusive socio-environmental committee has increased from 28.6% in 2020 to 45.9% in 2022, representing a growth of 17.3% [1]. This trend suggests a growing awareness and commitment to socio-environmental issues among Italian companies.
In summary, while corporate governance in Italy's largest firms has structurally incorporated sustainability, there is a critical need for enhanced ESG education and training at the board level to fully capitalize on sustainability committees' potential for socio-environmental impact.
References: 1. Sustainability Makers 2. Sustainability Makers 3. Poste Italiane 4. Matteo Pedrini 5. FTSE MIB ESG Risk-Adjusted Index
- The establishment of sustainability committees in 82% of FTSE MIB companies in Italy demonstrates a formal recognition of sustainability issues at the board level, yet research indicates skills gaps among these board members related to ESG competencies, such as climate risk assessment and socio-environmental impact measurement.
- To fully capitalize on the potential of sustainability committees for socio-environmental impact, there is a critical need for enhanced education and self-development, specifically in the areas of ESG education and training, among board members in Italy.
