In a recent interview for Infosys, Joel Makower of GreenBiz spoke with Helle Bank Jorgensen, the CEO and founder of Competent Boards, which offers online climate and ESG programs.

Surveying the ESG landscape, she sees investors making more inquiries about ESG issues and how companies are going to deliver on their pledges. “When we talk about proxy season and financial institutions and insurance companies, it's not enough nowadays to say, ‘Well, here's my plan for the future’ or ‘Here's my transition plan.’  You need the leadership to ensure that you can execute on that plan.” Jorgensen said she sees exponential growth in “leaders who want to get the foresight so they can make informed decisions and so that they can be credible when they talk to stakeholders.”

Asked whether boards are more focused on the risks or opportunities connected to ESG and sustainability, Jorgensen says it’s the risks. The questions being asked include, “What kind of risks are we actually taking? Do we understand the consequences of those risks?”

But she emphasized the need to focus more on the opportunities. “If you only look at the risk and look at what you know from the past, you can't even see those risks that are in front of you. And if you don't look at the opportunities, you will probably not be able to be a successful company.”

She pointed to potential opportunities in new business models, but also challenges connected to climate change, biodiversity, social issues, geopolitical issues, and artificial intelligence. “You can look at all of that as risks but you definitely need to look at it as an opportunity as well and say, ‘How do we become the business of the future? How do we ensure that we have the products, the people, the shareholders, the different customers that we want?’”

Jorgensen is encouraged by seeing that chief officers are being integrated into the whole business, from business functions to the value chain. “That's put different demands on the chief sustainability officer to actually understand the business, the short - term and the long-term goals, and what it is that needs to happen to keep up with regulation.”

Asked about managing different stakeholder expectations, Jorgensen said that one of the most important is “how to measure impact. And how do we ensure that we include that change in the organization and in the value chain and make that change stick?” She sees the chief sustainability officer's role becoming “more strategic but also one where you really need to understand the board of directors in order to have the impact that the chief sustainability officer desires.”

Jorgensen also emphasized the need for everyone involved with ESG to have a common understanding of terminology. She points to a word such as “materiality,” noting that “when I talk materiality from a sustainability point of view or materiality from a financial point of view, we are not thinking necessarily the same... It requires that understanding of both the company's business model but also its operations, its stakeholder expectations, and of course the performance. Then how do we rely on metrics and data? And how do we ensure we have the internal controls?”

There is a looming threat, said Jorgensen: short-term focus at companies. “We have boards and leadership that may be focused on the short-term performance and not see the long-term value of sustainable or sustainability initiatives. And this can make it challenging to prioritize the ESG issues and allocate the resources.”  While some companies face with pressures to scale back or discard sustainability initiatives, Jorgensen said that “the companies that have actually embedded this sustainability mindset into how they do business have seen how much money they are saving in terms of employees that they want to attract. They're also seeing benefits with their customers and in terms of their rates from banks and insurance companies.”