With the arrival of July and the deadline for the approval of the annual accounts, it is time to carefully evaluate the management reports submitted by the Boards of Directors. This analysis is essential to understand the real progress made on subject sustainability.

The European Union is clear that, in order to foster a society committed to a sustainable economic model , respectful of the environment and focused on human progress, sustainability must be a principle President in business decision-making. But how are companies facing the challenge of decarbonization? What real changes have they implemented and what measures have they adopted to combat the climate emergency? Are they really committed to this new orientation?

At this stage, it is too early to draw definitive conclusions. A more detailed analysis of non-financial reporting statements will be necessary to obtain a complete picture. However, a first reading of this documentation reveals that many companies are making good progress in integrating sustainability into their business strategy. However, others still have a long way to go and need to improve, even if they formally try to appear otherwise.

Whatever the final outcome of this review, result , the European Union will continue its strong regulatory drive in this direction. However, the Commission is aware that the real commitment of companies to the global transition towards decarbonization of the Economics will not be achieved through mandatory rules alone, let alone through sanctions. This turning point will only be reached if companies voluntarily commit themselves to this cause, and thus if boards of directors take a decisive and active leadership role in meeting this challenge.

It is therefore not surprising that the European Sustainability Reporting Standards (ESRS), contained in Delegated Regulation (EU) 2023/2772, in setting the standards for the presentation of such reporting, require companies to disclose the level of sustainability expertise of their board members. Only when directors directly understand the issue, recognize their responsibility and personally take on this challenge as their own, rather than relying solely on the good work of sustainability managers, can there be full confidence in the authenticity and effectiveness of this change process.

In order for training to adequately respond to the needs of board members, it is essential that it includes three fundamental ingredients. First, management expertise is a must. If directors wish to become position of how they can manage business differently, integrating the sustainable perspective, it is crucial to provide them with tools that will enable them to effectively manage the risks and opportunities inherent in this global challenge. In addition, they will need to know the mechanisms that will enable them to incorporate this novel and complex perspective into their decisions, so that it is not a marginal aspect, but a backbone of the business strategy. They should also be offered guidelines on the objectives and incentives they can set, as well as useful indicators for monitoring and evaluating the achievement of these goals.

However, this purely instrumental approach , although essential, will have little transforming power if it is not accompanied by a second component: a knowledge based on scientific evidence and data on the magnitude of the problem and the reasons that justify its involvement. It will be of little use to know the 'how' if the 'why' is unknown and not assimilated. For this reason, it is essential to resort to the financial aid of biologists, engineers and economists who can clearly and reliably show the causes of climate change, the extent of its effects and the possible technical solutions that can be adopted to minimize this risk. In this context, the simulation of hypothetical scenarios showing the possible consequences of climate change on model business and financial performance is often particularly illustrative.

Finally, board members should have a basic knowledge of a third aspect: the regulatory framework . In recent years, there has been a flurry of regulations related to sustainability and environmental protection, which have a direct impact on the competencies and functions of committee management. These include, among others, additional reporting obligations, verification and implementation of supply chain due diligence processes. In addition, there is an exponential and accelerated increase in climate change litigation, with an increase in lawsuits claiming compensation for inaction in combating climate change.

Therefore, it is of particular interest for board members to gain an insight into this legal perspective. Not so much to study in detail each of the rules that make up this broad and complex legal framework, but to understand the margin of freedom they have in fulfilling their fiduciary duties to shareholders. They must know to what extent shareholders can hold them accountable for taking an active stance in the fight against climate change or, on the contrary, reproach them for their passivity in this respect.

At final, the challenge of decarbonizing Economics requires providing board members with an interdisciplinary and scientific training , which will inspire them and better prepare them to design a sustainable business strategy. In this way, they will be able to lead from the committee of administration the corporate commitment to a low greenhouse gas emissions Economics .