Why boards must take the lead on sustainability to ensure long-term success

Why boards must take the lead on sustainability to ensure long-term success

Why boards must take the lead on sustainability to ensure long-term success
Sustainability must be viewed as more than just compliance; it must become an engine of innovation and competitive advantage. 
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Environmental, social and governance considerations have evolved from peripheral corporate concerns to central elements of business strategy. However, in some cases, a significant governance gap persists between commitments to sustainability and accountability at the board level.

Boards that continue to delegate sustainability to operational committees fail to fulfill their fiduciary duty to oversee it effectively. This gap in accountability at the highest levels is increasingly recognized as a key challenge for corporate governance.

A 2023 PwC survey found that 64 percent of directors recognize climate change as a significant business risk, yet only 38 percent report that their boards possess expertise in ESG matters. This gap exists despite growing investor demands for climate accountability.

Corporate sustainability pledges are often ambitious, but they are not always met. Board oversight remains insufficient. According to recent research, 71 percent of institutional investors believe most companies overstate their ESG progress, reflecting a lack of credibility in corporate sustainability governance.

Further illustrating this point, a 2024 study revealed that only 23 percent of S&P 500 companies link executive compensation to ESG metrics, and just 17 percent have a board member with significant ESG expertise. Without proper accountability at the highest levels, sustainability measures risk becoming mere greenwashing.

In response to these challenges, shareholder activism on ESG issues has surged, with climate-related proposals at S&P 500 companies increasing by 88 percent since 2020. Regulatory pressures are also mounting, with the EU’s Corporate Sustainability Reporting Directive and the SEC’s climate disclosure rules reshaping corporate reporting obligations.

As these pressures increase, forward-thinking boards are responding by integrating sustainability into core governance structures. High-performing companies tend to have boards with dedicated sustainability panels, mandate ESG literacy as a qualification, and incorporate climate considerations into enterprise risk-management frameworks.

Research shows that companies with strong ESG practices outperform financially, with top ESG performers posting annual shareholder returns 10 percent higher than bottom performers. This performance premium underscores that the role of sustainability governance extends beyond risk mitigation to creating strategic opportunities.

High-performing companies have boards with dedicated sustainability panels, mandate ESG literacy as a qualification, and incorporate climate considerations into enterprise risk management frameworks.

Majed Al-Qatari

This shift in perspective reveals sustainability as not just a defensive measure, but a driver of business growth.

Unilever’s board-level sustainability leadership, exemplified by its Corporate Responsibility Committee, oversees the company’s Sustainable Living Plan. This governance structure has helped Unilever reduce carbon emissions per unit of production by 56 percent, while maintaining consistent shareholder returns.

Similarly, Orsted, a Danish energy company, has seen its board-driven green transition cut carbon emissions by 87 percent and increase profits by 22 percent annually.

Given these examples, it is clear that sustainability must be viewed as more than just compliance; it must become an engine of innovation and competitive advantage. Companies with board-level sustainability oversight are approximately 2.7 times more likely to drive product innovation with environmental benefits than those without it.

Just as regulatory frameworks following accounting scandals in the early 2000s mandated financial expertise on boards, regulatory bodies should now require ESG competence. This shift is necessary to ensure boards are equipped to navigate the evolving business landscape.

Despite agreeing that financial capital remains the primary tool for meeting business objectives, companies lacking sound sustainability governance can face up to 30 percent higher costs than their more sustainable peers. This is a material financial impact that boards can no longer afford to ignore.

Ultimately, sustainability governance is essential for long-term value creation. In 2024, BlackRock CEO Larry Fink positioned climate risk as investment risk.

Boards that fail to lead on sustainability neglect their fiduciary duty to protect and enhance shareholder value in a rapidly evolving environment marked by environmental and social transformation.

Majed Al-Qatari is a sustainability leader and ecological engineer experienced in advancing environment, social, governance and sustainability goals.

 

 

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view

Gaza rescuers say 42 killed in Israeli strikes

Gaza rescuers say 42 killed in Israeli strikes
Updated 6 min 31 sec ago
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Gaza rescuers say 42 killed in Israeli strikes

Gaza rescuers say 42 killed in Israeli strikes
GAZA CITY: Gaza’s civil defense agency said Israeli strikes killed at least 42 people Friday in the Palestinian territory, devastated by war and under a total Israeli aid blockade for two months.
Israel resumed its military campaign in the Gaza Strip on March 18 after the collapse of a ceasefire that had largely halted the fighting.
Nine people were killed when an Israeli air strike hit a home in Bureij refugee camp in central Gaza, civil defense official Mohammed Al-Mughayyir told AFP.
AFP footage in the aftermath of a strike on Bureij camp showed Palestinians searching for casualties in the rubble of a flattened building.
“They gave us no warning, no phone call — we woke up at midnight to smoke, rubble, stones, and shrapnel raining down on us,” said Mohammed Al-Sheikh, standing among collapsed concrete slabs.
“We pulled out martyrs — bodies and limbs from under the rubble.”
Another six people were killed in a strike targeting the Al-Masri family home in the northern city of Beit Lahia, civil defense official Mughayyir added.
In Gaza City, a strike on a community kitchen claimed the lives of six more, the civil defense agency reported.
Across the Gaza Strip, at least 21 other deaths were reported in similar attacks, the agency said.
The health ministry in Hamas-run Gaza said on Thursday that at least 2,326 people have been killed since Israel resumed its campaign in Gaza, bringing the overall death toll since the war broke out to 52,418.
The war erupted after Hamas attacked Israel on October 7, 2023.
That attack resulted in the deaths of 1,218 people on the Israeli side, mostly civilians, according to an AFP tally based on official figures.
Militants also abducted 251 people, 58 of whom are still being held in Gaza, including 34 the Israeli military says are dead.
The Israeli government says its renewed campaign aims to force Hamas to free the remaining captives, although critics charge it puts them in mortal danger.
Israel halted aid deliveries to Gaza on March 2, days before the collapse of the ceasefire which had come into effect on January 19.
The United Nations has repeatedly warned of the scale of the humanitarian catastrophe on the ground, with famine again looming.
On Friday, the International Committee of the Red Cross said the humanitarian response in Gaza was on the “verge of total collapse.”
“This situation must not — and cannot — be allowed to escalate further,” its deputy director of operations, Pascal Hundt, said in a statement.

Pakistan’s UN envoy says India’s suspension of water treaty illegal, poses ‘existential threat’

Pakistan’s UN envoy says India’s suspension of water treaty illegal, poses ‘existential threat’
Updated 24 min 5 sec ago
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Pakistan’s UN envoy says India’s suspension of water treaty illegal, poses ‘existential threat’

Pakistan’s UN envoy says India’s suspension of water treaty illegal, poses ‘existential threat’
  • Ambassador Ahmad warns India’s action could set a dangerous precedent undermining rights of lower riparian states
  • He says Pakistan rejects any attempt to associate it to the April 22 attack, which it condemned alongside other nations

ISLAMABAD: Pakistan’s top diplomat at the United Nations on Friday raised alarm over India’s decision to suspend a decades-old river water sharing mechanism between the two nations after a gun attack killed 26 people in the disputed Kashmir region on April 22.
New Delhi blamed Islamabad for the assault in Pahalgam, a tourist hotspot in Indian-administered Kashmir, despite Pakistani denial of involvement and calls for an independent investigation. India also expelled Pakistani diplomats, shut a major border crossing and suspended the 1960 Indus Waters Treaty (IWT) in the wake of the attack.
Ambassador Asim Iftikhar Ahmad, Pakistan’s Permanent Representative to the UN, told a media briefing at the UN his country “categorically rejects any attempt to associate it with the 22 April terrorist incident” and had condemned it alongside other Security Council members.
He described India’s conduct as “incendiary,” saying it disregarded international law and could have “far-reaching consequences for global peace and stability.”
“Of grave and particular concern is India’s irresponsible decision to hold in abeyance the historic Indus Waters Treaty of 1960, a landmark, legally binding agreement brokered and guaranteed by the World Bank,” he said.
“Holding of IWT in abeyance is unilateral and illegal,” he continued. “There are no such provisions in the Treaty. India’s unilateral and unlawful actions are bound to undermine regional peace and stability with catastrophic implications.”
The Pakistani envoy warned that the suspension of the IWT posed “an existential threat to the people of Pakistan” and amounted to the usurpation of the rights of lower riparian states.
“If left unchecked by the international community, such actions risk setting a dangerous precedent that could undermine the legal rights for lower riparian states, potentially triggering new global conflicts over shared water resources,” he said.
Ahmad also expressed concern over escalating rights violations in Indian-administered Kashmir, the only Muslim-majority region under New Delhi’s control, since the Pahalgam attack.
He cited reports of arbitrary detentions, home demolitions and “collective punishment” imposed on civilians by the Indian authorities.
He reiterated Pakistan’s longstanding position that the root cause of instability in South Asia was the unresolved Jammu and Kashmir dispute, and warned of the risk of wider conflict in the nuclear-armed region.
“Escalation in South Asia, home to nearly two billion people, favors none,” Ahmad said. “It is time for sanity to prevail and allow dialogue and diplomacy to prevent the situation from spiraling out of control.”


Desperate children and adults in Gaza struggle to get food as Israel blocks aid

Desperate children and adults in Gaza struggle to get food as Israel blocks aid
Updated 32 min 58 sec ago
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Desperate children and adults in Gaza struggle to get food as Israel blocks aid

Desperate children and adults in Gaza struggle to get food as Israel blocks aid
  • “Until when will life be like that? We’re slowly dying. We haven’t eaten bread for a month and a half,” said Abu Arar
  • Aid groups have warned that Gaza’s civilian population is facing starvation

KHAN YOUNIS, Gaza Strip: Screaming in anguish as the desperate crowd crushes them against a barrier, young children and adults frantically wave pots and pans at charity workers, begging for a portion of some of the last food aid left in Gaza: Rice.
The chaos at the community kitchen in Khan Younis in southern Gaza on Friday was too overwhelming for Niveen Abu Arar. She tried and tried, but the 33-year-old mother of eight didn’t get to the front of the crowd in time. She left with her pot empty, and her eyes full of tears.
“Until when will life be like that? We’re slowly dying. We haven’t eaten bread for a month and a half. There is no flour. There is nothing,” said Abu Arar, whose ninth child, a 1-year-old boy, was killed in an Israeli strike near their home at the start of the war in 2023. “We don’t know what to do … We don’t have money. What do we get for them?”
She cradled a toddler in her lap as she spoke. With no milk to provide, she poured water into a baby bottle and pressed it into her youngest daughter’s mouth, hoping to stave off the baby’s hunger pangs.
With Israel blocking any form of aid — including food and medicine – into Gaza for the past two months, aid groups have warned that Gaza’s civilian population is facing starvation.
Israel has said that the blockade and its renewed military campaign aim to pressure Hamas to release the remaining hostages it still holds and to disarm. Aid groups stress that blocking humanitarian aid is a form of collective punishment and a violation of international law.
Israeli authorities didn’t immediately respond when asked about accusations that starvation was being used as a weapon of war, but in the past they have accused the Hamas militant group governing Gaza of stealing aid.
In an emergency call with reporters on Friday to discuss Gaza’s humanitarian crisis, aid groups described a territory nearly out of food, water and fuel, with prices for the meager supplies remaining skyrocketing beyond the reach of many.
With nearly the entire population reliant on humanitarian aid, according to the United Nations, warehouses are empty, community kitchens are closing down, and families are skipping meals.
A 25-kilogram (55-pound) bag of flour now goes for 1,300 shekels ($360), said Ghada al Haddad, Oxfam’s media coordinator in Gaza.
“Mothers in Gaza now feed their children one meal per day, dinner, so they don’t wake up and complain they are starving,” she said.
Amjad Shawwa, the director of the Palestinian NGO network, said that more than 70 of their community kitchens inside Gaza would close within the week if the Israeli blockade continues.
Israeli airstrikes have also taken out large swaths of Gaza’s agricultural land and livestock, making it nearly impossible for the territory to produce its own food, said Gavin Kelleher, a humanitarian manager with the Norwegian Refugee Council who recently left Gaza. Even fisherman have been targeted, he said, killed in small fishing boats by Israeli naval forces.
“Israel has engineered a situation where Palestinians cannot grow their own food or fish for their own food,” he said.
Kelleher, whose organization coordinates the provision of shelter to Gaza, said that not a single aid group has any tents left to distribute — as 1 million people inside Gaza remain in need of shelter given the devastation caused by the nearly 19-month war.
In Khan Younis, Mustafa Ashour said he had walked for an hour to get to the charity community kitchen, and waiting for another two hours before he managed to get food.
“The situation is hard in Gaza. The crossings are closed. It’s a full siege,” said Ashour, who was displaced from the southern city of Rafah. “There is no food. There is no water. There are no life necessities. The food being sold is expensive and very little.”
As for Abu Arar and her family — left without a handout from the charity kitchen — another family in a neighboring tent took pity, and shared their own meager portions of rice.
Keller of the NRC said that if Israel continues its blockade, “thousands of people will die, there will be a complete breakdown of order, telecommunication networks will come down and we will struggle to understand the situation because it will be unfolding in the dark.”


Thai festival brings eruption of color and music to Riyadh

A glimpse of the cultural dance performance at the Thai Festival in Riyadh on Thursday. (AN photo by Huda Bashatah)
A glimpse of the cultural dance performance at the Thai Festival in Riyadh on Thursday. (AN photo by Huda Bashatah)
Updated 02 May 2025
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Thai festival brings eruption of color and music to Riyadh

A glimpse of the cultural dance performance at the Thai Festival in Riyadh on Thursday. (AN photo by Huda Bashatah)
  • Event is a celebration of the strong and growing friendship between our countries and our people, says Thailand’s envoy

RIYADH: The Thai Festival in the Cultural Palace in Riyadh’s Diplomatic Quarter celebrates both Thailand’s rich culture and its blossoming friendship with Saudi Arabia.

Riyadh was chosen as one of six flagship cities around the world to hold the festival, alongside Washington DC, Beijing, New Delhi, Hanoi, and Paris.

The cutting of the ribbon marks the inauguration of the Thai Festival in one of six flagship cities, Riyadh. (Photo by Huda Bashattah)

At a press conference prior to the festival, which is open to the public May 2 and 3, Thailand’s Ambassador to Saudi Arabia Darm Boontham said: “This is a proud moment for us and a great opportunity to share the rich tradition and modern creativity of Thailand with our Saudi friends.”

The festival comes at a significant time, three years since the normalization of diplomatic relations between Thailand and Saudi Arabia.

HIGHLIGHTS

• This year’s theme is ‘The Pulse of Tradition, The Pulse of Tomorrow,’ reflecting Thailand’s pride in its culture and its commitment to innovation and creativity.

• The ministers of culture for Thailand and Saudi Arabia — Sudawan Wangsuphakijkosol and Prince Badr bin Abdullah Al-Saud — attended the event.

“This event is a celebration of the strong and growing friendship between our countries and our people,” Boontham continued.

Booths showcasing Thai products and services at the Thai Festival at the Cultural Palace in Riyadh. (Photo by Huda Bashattah)

This year’s theme is “The Pulse of Tradition, The Pulse of Tomorrow,” reflecting Thailand’s pride in its culture and its commitment to innovation and creativity.

The festival features several exhibitions of Thai products and services, including handicrafts from local communities in Thailand, live demonstrations, health and wellness products, eco-tourism, and Thai cuisine.

Muythai demonstration at the Thai Festival in Riyadh. (Photo by Huda Bashattah)

It also includes a live cooking show by a celebrity Thai chef, screenings of several beloved Thai movies followed by Q&A sessions, a musical and cultural performance, a Muay Thai boxing demonstration, a fashion show by Thai designers, and a Khon performance.

Khon, a traditional masked dramatic art that features music and dance as well as ritual, literary, and handicraft components, is included on UNESCO’s Intangible Cultural Heritage list, Boontham said.

Booths showcasing Thai products and services at the Thai Festival at the Cultural Palace in Riyadh. (Photo by Huda Bashattah)

“We invite everyone, Saudi nationals, residents and all friends of Thailand to join us for this unique celebration, to enjoy the science of sound and taste of Thailand and to continue building a warm and lasting friendship between our two great nations.”

The festival was organized by the Royal Thai Embassy in Saudi Arabia in partnership with Thailand’s private and public sectors, including Thai supply chain company SGC International’s Riyadh division, with the support of Saudi and Thai private companies.

Fashion show by Thai Designers at the Thai Festival in Riyadh. (Photo by Huda Bashattah)

The ministers of culture for Thailand and Saudi Arabia — Sudawan Wangsuphakijkosol and Prince Badr bin Abdullah Al-Saud — attended the event.

The objective of the festival goes beyond tourism, the ambassador said, it is intended to promote everything Thailand can offer in terms of creative economy, innovation, and how Thailand can tap into Saudi Vision 2030 and the Kingdom’s green initiative.

Thai minister of culture Sudawan Wangsuphakijkosol speaks at the Thai Festival in Riyadh. (Photo by Huda Bashattah)

Boontham also confirmed plans to create Thai AirAsia X, a new low-cost airline from Thailand that should operate flights from Riyadh to Bangkok “very soon,” he said.

According to Boontham, the largest developing areas of cooperation between the two nations are economy, trade, and investment.

Thai ambassador to Saudi Arabia Darm Boontham inaugurates the Thai Festival at the Cultural Palace. (Photo by Huda Bashattah)

Over the last three years, the volume of trade has increased by an average of 25 percent and the ambassador is confident that “all the necessary mechanisms” are in place to support further growth.

In 2024, trade reached a value of $8.8 billion and the hope is that in two years that number will reach $10 billion, he added.

Booths showcasing Thai products and services at the Thai Festival at the Cultural Palace in Riyadh. (Photo by Huda Bashattah)

Boontham cited SGC International, a Thai company known for construction materials that is now expanding into petrochemicals, food, and food processing as a sign of promising investment in Saudi Arabia.

Technology sharing, in areas including green consumption technology, is “quite prevalent” and shows promise, he added.

Interactive booths showing live demonstarions of handicraft at the Thai Festival in Riyadh. (Photo by Huda Bashattah)

Tourism is another large area of cooperation. Last year, around 230,000 Saudi tourists visited Thailand, and 13,000 Thai tourists visited Saudi Arabia; both numbers are expected to grow in coming years, the ambassador noted.

According to Boontham, “many Thai students” are coming to pursue their studies in Saudi as well, and Thailand is working hard to encourage more Saudis to study in Thailand.

In hospitality education, especially, “Thailand has a lot to offer Saudi students,” Boontham said. In 2024, 50 individuals from Saudi Arabia went to train in Thai hotels and institutions.

 


UK tells ICJ Israel must allow aid supplies into Gaza

UK tells ICJ Israel must allow aid supplies into Gaza
Updated 12 min 13 sec ago
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UK tells ICJ Israel must allow aid supplies into Gaza

UK tells ICJ Israel must allow aid supplies into Gaza
  • British lawyers outline Israel’s obligations under international law during hearings at the Hague
  • UK supports banned Palestinian aid agency’s continued work in Gaza

LONDON: Lawyers representing the UK government have told the UN’s top court that Israel must allow aid supplies back into Gaza.

Speaking at the International Court of Justice in The Hague, Sally Langrish, legal advisor to the UK’s Foreign Office, said Israel must also give the International Committee of the Red Cross access to Palestinian prisoners and insisted that the UN’s agency for Palestinian refugees was impartial.

Her comments on Thursday were made on the fourth day of hearings at the ICJ, which was asked last year by the UN General Assembly to give an advisory opinion on Israel’s legal obligations on the operations of UN agencies and international organizations in the occupied Palestinian territories.

The hearings, which finish on Friday, have centered around Israel’s cutting off of aid supplies to Gaza and come amid dire warnings about the collapse of emergency food and water supplies to Palestinians.

“Israel must facilitate full, rapid, safe and unhindered humanitarian provision to the population of Gaza, including food, water and electricity, and must ensure access to medical care in accordance with international humanitarian law,” Langrish told the court.

David Lammy, the UK’s foreign secretary, this week said Israel’s decision to block aid deliveries to Gaza was a “horrendous” decision that was causing dire suffering. 

On Friday, the Red Cross warned that aid operations in Gaza were on the “verge of total collapse,” describing scenes of starving children and fights over water. 

The stating of the UK’s legal position at the ICJ also came as the British government confirmed it was in talks with France and Saudi Arabia over officially recognizing the Palestinian state.

Spain, Norway and Ireland recently added themselves to the 160 countries that already recognize Palestine.

The UK was among the 137 countries to vote in favor of the UN General Assembly resolution in December to request the ICJ opinion. The US and 10 other nations voted against and 22 abstained.

The resolution was in response to Israel passing a law that effectively banned the main UN organization delivering aid to Palestinians, UNRWA, from operating in Gaza and the West Bank.

Israel claims that workers at the agency took part in the Hamas attack on Israel in October 2023 that sparked Israel’s devastating military campaign in Gaza.

Langrish said the allegations of any UNRWA staff involvement in the “barbaric” Hamas attack must be thoroughly investigated. But she said the UK “supports UNRWA’s continued work and commitment to the principle of neutrality.”

She also highlighted Israel’s obligations under international law to allowing the Red Cross access to Palestinian prisoners.

Langrish said there had been “credible reports of ill-treatment of Palestinian detainees held in Israeli custody” since the war started and that Red Cross access was aimed at ensuring they are treated humanely.

That Hamas had also not allowed Red Cross access to the hostages held in Gaza was also “completely unacceptable,” she said, but added that this could not be used to justify Israel denying Red Cross access to Palestinian detainees since.

The ICJ’s opinion is expected to take months to be delivered.

At least 42 people were killed in Gaza on Friday, AFP reported, with the number of Palestinians killed in the conflict now more than 52,000. The Hamas attack in October 2023 killed 1,218 people.