Sustainability is no longer optional. It’s a strategic business priority with real regulatory, financial, and reputational stakes. Boards must lead from the top, embedding sustainability into long-term strategy, risk management, and decision-making.

1. Assign board-level responsibility 

Even with a small board (3 to 5 members), make sure someone is responsible for sustainability If expertise is lacking, bring in external experts for periodic briefings or provide basic training.

Why it matters: many regulations now require boards to engage explicitly with sustainability:

• CSRD (EU): requires boards to oversee sustainability risks and strategy
• SB 261 and SB 253 (California): mandate board-level climate risk oversight
• TCFD: A global standard calling for board involvement.

Proactively aligning with these frameworks helps you stay ahead of regulation and signals credibility to regulators, investors, partners.

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2. Put it on the board agenda

Make sustainability a regular topic  in board meetings. Move beyond sustainability updates to strategic discussions on material risks, opportunities, and performance.

Define and regularly review sustainability KPIs relevant to your sector and model, such as:

• Carbon emissions (Scopes 1–3)
• Energy use and efficiency
• Exposure to physical or transition risks
• Workforce well-being and retention
• Responsible sourcing and supplier compliance

Tracking these indicators enables informed decisions and ensures accountability. 

Make sure the board signs off on the necessary resources (people, tools, and budget) to meet these goals. Ambitions without investment won’t deliver results.

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3. Equip your board to ask the right questions

An informed board is an effective board. Share updates on emerging regulations and equip members with questions to guide oversight:

• How is sustainability part of our core strategy?
• What are our main risks?
• Are we ready for CSRD or SB 261?
• Are our KPIs realistic and resourced?
• Are we on track? What are the main blockers?
• How do we compare to peers?
• How is accountability structured across the executive team?
  

These questions help shift from compliance-driven reporting to strategic oversight and performance management.

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What success looks like

• Sustainability is reviewed at every board meeting with clear actions and accountability
• KPIs are tracked alongside financials; the board signs off on relevant budgets
• Board members understand key frameworks like CSRD, SB 261, and TCFD
• Oversight is embedded in governance structures 
• Strategic risks and resource needs are addressed proactively

When sustainability is owned at the board level, it becomes part of core governance and long-term planning. A board that leads on sustainability doesn’t just meet regulatory expectations: it builds resilience, attracts aligned investors, and creates long-term value.

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Need help putting this into practice?

Kara helps private companies (especially SMEs and startups) and investors embed sustainability into governance and decision-making. From structuring board agendas and defining KPIs to aligning resources and complying with regulations, we provide the data, tools, and support to turn sustainability into business value.

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