ESG+ Newsletter – 09 July 2026

The role of chief sustainability officer (CSO) is at a crossroads, caught between growing systemic challenges and a political climate increasingly hostile to the word “sustainability” itself. At a recent Cambridge Institute for Sustainability Leadership forum, held with Stanford University and joined by African corporate leaders, participants debated rebranding the role around “resilience” or folding it into strategy, finance, or communications functions.

There is a broader challenge than the title though. CSOs must ensure their organisations actively shape the future economy rather than be shaped by it, acting as translators who explain the world to business rather than the reverse. African leaders, long attuned to resilience amid economic precarity, model a multidisciplinary approach worth emulating. Ultimately, the article argues CSOs must challenge outdated business models and mispriced risks, and defend data, science, and reason since systemic pressures will continue regardless of politics.

A recent position paper from the International Corporate Governance Network (ICGN) Future Leaders Committee sets out three priorities for boards seeking to remain effective in an increasingly complex business environment. The paper argues that greater age diversity, stronger AI literacy and enhanced geopolitical expertise should become key considerations in board succession and composition planning.

The paper makes the case that boards dominated by a single generation are more susceptible to shared assumptions, potentially limiting their ability to respond to technological change, evolving workforce expectations and shifting market dynamics. Conversely, multigenerational boards can foster greater innovation, improve succession planning, strengthen capital allocation and support long-term performance. It also argues that artificial intelligence is no longer solely a technology issue but a boardroom responsibility. While not every board needs an AI expert, all directors should have sufficient understanding to challenge management, assess whether investments are delivering value and oversee the risks associated with AI adoption. Finally, the paper highlights that geopolitical developments have become a permanent feature of the business landscape. Trade tensions, sanctions, supply chain disruption and regulatory fragmentation are increasingly shaping corporate strategy, requiring boards to strengthen their oversight of geopolitical risks and undertake regular scenario planning.

Collectively, these points are making the role of board nomination committees increasingly complex. One of their key challenges is deciding when new expertise should be added through board appointments and when targeted director training or access to external advisors can provide the capabilities needed to ensure governance remains fit for the future.

At the end of June, the U.S. Equal Employment Opportunity Commission (EEOC) voted to rescind its affirmative action guidelines, ending a 40-year precedent. The guidelines date back to 1979, filling a gap in Title VII of the Civil Rights Act, which traditionally bars employers from making hiring decisions based on race, sex, or national origin. By shielding employers from a Title VII challenge, the guidelines formerly allowed hirers to voluntarily consider those diversity factors to remedy past discrimination. Guided by the Trump administration’s broader agenda towards group-conscious hiring, the change follows a new enforcement plan that prioritizes a “crackdown on… job advertisements that ‘encourage’ certain groups of people to apply, and staffing agencies or fellowships that pick talent similarly.” EEOC Chair Andrea Lucas claims that, in honour of America’s 250th anniversary, the removal protects that “every individual is created equal and therefore is entitled to equal treatment under the law.” The decision comes just three years after the U.S. Supreme Court struck down race-conscious college admissions, and it follows the Trump administration’s parallel retreat from disparate-impact enforcement and DEI-related scrutiny. HR Dive argues that without the EEOC’s interpretive framework, employers are now lacking a clear standard for how to maintain affirmative action plans throughout the hiring process. Companies must proactively review how their existing policies operate in practice, not just on paper.

Investing based on environmental, social and governance (ESG) factors, alongside ESG advocacy and proxy voting by institutional investors, has retreated significantly in recent years. Since the spring of 2022, U.S. ESG mutual funds have experienced sustained net investor outflows, driven by a combination of rising oil prices, which weakened the relative performance of many ESG funds, and, an increasingly politicised backlash against sustainable investing.

One of the most notable examples is Parnassus Investments, whose ESG equity funds typically hold concentrated portfolios of fewer than 50 stocks. Although the firm’s assets have declined by around 25% from their 2021 peak of $32.3 billion, the broader rise in equity markets has helped cushion the fall. Parnassus currently holds just 37 stocks, excluding companies involved in fossil fuels, weapons, tobacco and alcohol. For many institutional investors, however, the retreat from ESG has been driven more by political pressures than commercial considerations. Climate-related risks and corporate governance issues continue to play an important role in investment decision-making, even if they are no longer labelled explicitly as ESG. This shift is also evident in corporate governance practices, where support for pro-ESG proxy voting has weakened. The number of ESG-related shareholder proposals brought to a vote has declined steadily since 2022, potentially reflecting regulatory changes that have given companies greater scope to exclude such proposals from their ballots.

Despite this apparent retreat, the Wall Street Journal argues that the fundamental issues underpinning ESG investing have not disappeared but are increasingly being addressed outside the public spotlight. Supporting this view, Ed Farrington, President of Impax Asset Management, contends that the ESG backlash has “run its course” and argues that ESG considerations remain valuable because they provide important insights into companies’ long-term resilience and risk exposure.