Oct 1, 2024
Esgrid recently conducted a first-of-its-kind study among sustainability leaders in the Baltic region, mapping the responsibilities and challenges of the role, as well as the ESG governance models in various organisations. Among other findings, the study revealed that as many as 40% of ESG leaders oversee multiple areas simultaneously.
The survey was conducted in late August and early September this year, targeting sustainability and ESG leaders and experts in Estonia, Latvia, and Lithuania. A total of 113 people participated, sharing insights into their background, reporting structures, main tasks, and the barriers they most frequently encounter in their daily work.
According to the study, ESG leaders and experts have diverse professional and educational backgrounds, and the role itself is relatively new and still evolving. 60% of respondents have held the position of sustainability leader for only 0–3 years.
60% are solely responsible for sustainability/ESG, while 40% also manage other areas (e.g. HR, marketing, communications, finance).
The prior experience of ESG leaders comes from a variety of fields, with the most common being marketing or communications (25% of respondents). However, other fields such as finance, HR, and environmental management are also represented. Educational backgrounds are similarly varied, spanning business management, economics, environmental management and science, communications, law, and other disciplines.
Most of the sustainability experts who participated in the study – 66.4% – do not manage people directly. 60% report directly to a member of the board, and 44% of these report directly to the CEO. However, 88.5% are not themselves members of the management board.
The study found that the main tasks of sustainability leaders include ESG reporting, developing strategies and policies, and ensuring regulatory compliance. Over half – 53% – are also responsible for monitoring the company’s entire value chain and managing related risks.
The biggest challenges identified were collecting and analysing various ESG data (51% of respondents), ensuring the sustainability of the value chain – including partners, suppliers, and clients (30% of respondents) – and concerns related to employee awareness and engagement (29%). Other challenges include complying with regulations and reporting, driving necessary cultural changes, and integrating sustainability into the business strategy.
In summary, there is no shortage of challenges in the ESG field and its roles. Reporting and regulatory compliance are certainly among them, but so too are changes in corporate culture, awareness, and education. Managing the company’s value chain sustainability is an important task and often a challenge as well. While cultural changes may take more time, data collection and analysis processes can be accelerated, made more efficient, and user-friendly with the help of technology, which can certainly help address some of the challenges mentioned above. In the long term, ESG governance models in the Baltic business world need to be further strengthened and clarified, and the role of an ESG leader needs to become part of the decision-making body of a company or organisation.