The rise of sustainability oversight committees - An interview with David Suetens

We recently sat down with David Suetens, Non-Executive Director with several financial institutions and Steerco member of the newly formed Chapter Zero Luxembourg to discuss the rise of sustainability oversight committees as part of modern board governance and oversight.  

He recently published an extensive article on the topic in the Journal of Risk Management in Financial Institutions.  Here is a recap of our conversation with David, where he presents arguments for creating such dedicated capacity, and brings several examples to illustrate this. 

Chapter Zero Brussels: What was your motivation to write this paper and why do you think sustainability oversight committees are important?

David Suetens: As you know sustainability should be integral to the development of a company’s corporate strategy, including the associated risks and opportunities.   The governance of this can be complex as these issues span the value chain of the entire organization touching everything it does.   From a board governance perspective the topic is so wide that it risks ‘popping up’ on almost every (sub)committee of the main board which is far from ideal, governance-wise.

Chapter Zero Brussels:  Couldn’t sustainability just be dealt with by the main board?  

David Suetens: Given the vastness of the sustainability agenda, it is not surprising that banking and corporate boards have been struggling to cover this end-to-end agenda within their existing governance bodies.  Often the responsibility gets allocated to the risk and/or audit committee.  This results in a general fear that, consequently, a specific risk lens will be applied missing the business opportunities of the agenda.  

Chapter Zero Brussels: Practically speaking, what is your advice for how boards could consider these reflections?  

David Suetens:  The 2022 TCFD report listed several case studies of companies across different industries that had created a specific governance body for sustainability.  All of them identified such a dedicated committee as a major accelerator to their sustainability journeys.  Cross-functional participation is key to success.  

Chapter Zero Brussels: For individual board members what’s your call to action?  

David Suetens:  Given the constant evolution of this area we are lacking board members with the required knowledge – so called ‘climate competency’ and this topic is often quoted as a material hurdle for boards.  Consequently, ongoing commitments and investments in education are key, as offered through the activities and flagship training program of Chapter Zero Brussels, and other chapters around the world.   

Chapter Zero Brussels: Any final thoughts?

David Suetens: In conclusion I would say that, while a dedicated sustainability committee may not be the one-size-fits all solution for all companies, the benefits of a dedicated committee are material. Continuing the work only with the existing governance bodies may result in additional gaps in oversight as well as unnecessary exposures.

We thank David for his time and sharing insights on this critical topic. 

Want to know more?

You can read the full article (subscription required) here: Journal of Risk Management in Financial Institutions