There’s bad new for ESG campaigners. Despite all the debate, pressures from investors and new reporting rules for regulators, directors are struggling to make ESG central to corporate strategy.

New research says 70% of directors say they are “not at all” or only “moderately“ effective at integrating ESG—environmental, social and governance—concerns into company strategy.

More than half, 53%, believe their boards should devote more time to ESG, but they are “not effective” at making room on schedules.

Only 55% of boards could say they had published a plan to reach net-zero, despite climate change being widely recognised as a “top priority”.

The survey leads the authors, Boston Consulting Group (BCG) and business school INSEAD, to conclude that there is “no question that directors must up their game in this area”.

According to David Young, a BCG managing director, scepticism among directors about their ability to hit ESG aims and objectives “makes it more critical than ever that boards enhance their governance of ESG issues, focusing on the matters that are truly material and connected to advantage and value creation for the company”.

ESG: compliance or strategy?

BCG believes directors may still consider ESG as a compliance issue rather than a strategic guiding star. ESG may be struggling to win the time it needs in the boardroom for serious strategic discussion.

Sonia Tatar, executive director at the INSEAD Corporate Governance Centre, says making net-zero plans comes with a commitment to do the hard graft of developing “concrete plans”.

The joint report suggest boards must now make “critical decisions” about how to structure the ESG work. This may be a problem in some quarters. The research found around 30% of companies assign ESG responsibility to a full board. Other companies use a dedicated ESG committee (20%) while a further group delegate responsibility to a dedicated director, with no separate committee. Though different approaches may be appropriate, boards may be struggling to define their own governance needs.

Expertise on boards may be an issue too. The report says that “boards should push for greater competency, systematically assessing what expertise they need in order to be effective at oversight of ESG issues”.

And there are time pressures too. While 91% of those directors interviewed for the research believe a focus on “strategic reflection” is the key, less than half of that group could claim to be “effective” at staging that reflection.

The survey results will disappoint many who have campaigned hard for ESG to be embedded in boardroom thinking. While investors have pressed companies to manage climate risk, and will do so again this AGM season, governments have upped the ante with increasing demands for disclosure.

The UK, EU and the US are now all working with or on some form of advanced climate risk disclosure rules while international standards are in development.

However, further progress may be hard if boards are falling short of giving ESG the time and attention it needs to become integral to their strategies.

ESG is a headline issue. But it seems boardroom practice in some areas may lag behind regulatory and political thinking and public motivation. Time to catch up.