The University of Cambridge Institute for Sustainability Leadership (CISL), in partnership with global law firm DLA Piper, has launched the second phase of the Future of Boards research study. The initiative aims to help company boards and investors integrate sustainability risks and opportunities into corporate strategies, ensuring long-term business resilience.
The research comes at a time when certain markets are shifting focus away from ESG considerations. However, evidence suggests that companies must balance short-term financial performance with long-term sustainability goals to remain competitive. Boards play a critical role in ensuring businesses adapt to evolving market conditions while complying with national regulations.
The report calls on boards and investors to actively shape corporate governance frameworks that promote sustainable business models. It urges engagement with policymakers and regulators to create market conditions that reward sustainability while discouraging unsustainable business practices.
Corporate boards are under growing scrutiny as long-term investors increasingly adopt proactive stewardship, prioritising sustainable value creation over short-term financial gains. This shift compels boards to expand their oversight and ensure businesses are prepared for future challenges, particularly those related to climate risk, resource scarcity, and regulatory shifts.
The report calls for structural market reforms to encourage corporate strategies that align with sustainability. It highlights the importance of governance structures that integrate ESG principles, ensuring businesses remain competitive in a rapidly changing economic landscape.
The second phase of the Future of Boards research examines the evolving relationship between company boards and asset managers. It identifies key drivers, challenges, and enablers influencing these interactions, based on an analysis of 40 major asset managers across North America, Europe, Asia, Africa, and Australia.
Key findings from the study indicate that private engagement with investee companies has emerged as the preferred method for asset managers to influence corporate decision-making. Also, Large asset managers increasingly recognise that company-specific risks are compounding into systemic risks, requiring a strategic approach to sustainability governance.
These findings suggest that boards must work more closely with investors to drive corporate sustainability initiatives and manage risks effectively.
The first phase of the Future of Boards research revealed that many businesses treat sustainability reporting as a compliance exercise, rather than integrating ESG data into strategic decision-making. The latest findings indicate that leading boards use sustainability impact data to inform their long-term corporate strategy. They view sustainability reporting requirements as valuable tools that help align business objectives with climate and social responsibility goals. The boards also recognise the potential of artificial intelligence (AI) and digital technologies in analysing sustainability data and predicting future risks.
As regulatory expectations around sustainability disclosures continue to rise, companies that proactively integrate ESG considerations into governance frameworks are likely to maintain a competitive advantage.
As part of the research, CISL collaborated with the UK’s Institute of Directors to assess board-level awareness of sustainability risks. A survey of 486 executive board members found that 61.5% of respondents believe that integrating sustainability risks and opportunities is essential for business profitability. However, 63.8% admitted to lacking awareness of how their companies’ operations impact nature, resources, and ecosystems.
The report provides 20 strategic questions designed to help boards evaluate their approach to sustainability governance, identify opportunities to integrate ESG principles into business strategy, and Shape policy recommendations that support market-wide sustainability initiatives.
With increasing regulatory and market expectations, the findings from the second phase of the Future of Boards study provide practical tools to help businesses align financial success with sustainability imperatives.
