The Board’s ESG RACI: Who Owns What

The board’s ESG RACI: who owns what as environment, social and governance compliance gets broader and more complex. 

ESG has been on a journey in the 2020s. In some areas, like the United States, it has gotten caught in culture wars, shunned by right-wing politicians, and targeted so much that even mentioning it in some circles is effectively taboo. 

In other areas, like the EU and the Middle East, it has been on a steady trajectory of growth. And in these areas, it’s getting to a point where compliance is essential to survival in corporate governance. Rules change over time to accommodate feedback, but the underlying embrace of ESG remains consistent. 

In this environment, where ESG is a central pillar of board-level fiduciary duty, boards need to move away from just being reactive observers. Now, directors essentially have an obligation to be architects of long-term value, treating ESG as a core driver of that value, not something extra, not apart from core strategy. 

For this to work, the fundamental question is who has responsibility for what when it comes to ESG. Boards need careful structure; they must know what that looks like ahead of time. 

An average boardroom in the UK, EU, Middle East and Asia will likely be under considerable pressure to perform in the ESG compliance space. Automatically, it makes ESG a strategic priority. 

This shift is driven by a convergence of accelerating regulatory mandates, such as the European Union’s Corporate Sustainability Reporting Directive (CSRD) and greater international focus International Sustainability Standards Board (ISSB) standards, alongside a heightened risk of litigation and reputational headaches linked to practices like greenwashing/hushing. 

Modern boards need to be focused on integrated mindsets when it comes to the above regulations. They need to treat sustainability data like they treat financial reporting: audit-grade attention to detail and no more “pick-and-choose” when it comes to disclosure frameworks.

In the simplest terms, the board provides the mandate and oversight of ESG, while management is responsible for execution and data integrity.

This should make sense to most boards, who are used to this kind of format in other areas of governance. The prevailing challenge with ESG, however, is the elimination of siloed thinking. For many companies, ESG tended to get caught in the “optional extra” territory, dealt with in a separate board committee with little to no external communication or integration. This will always work against effective oversight, and if it’s present in your organisation, don’t let it continue. 

The best boards are implementing a robust RACI (Responsible, Accountable, Consulted, Informed) matrix to define clear ownership.

The usual caveat applies here: it’s crucial that you allocate responsibilities according to what’s best for your organisation. In practice, this means that every business will handle each responsibility differently. That said, a high-performing ESG RACI typically allocates responsibilities as follows:

• The board of directors holds ultimate accountability. The board sets ESG ambition and ensures it materialises in practice. Practically, this means the board often works to ensure ESG is ingrained in the wider corporate strategy, through actions like approving materiality assessments and developing policies that link ESG metrics to executive compensation. 
• The board’s audit committee will often hold primary responsibility for data accountability and the successful completion of external assurance, ensuring ESG data receives the same level of scrutiny as financial data.
• The board’s ESG committee – if there is one (it depends on the organisation) will give continuous expertise and focus to ESG integration, working with the audit committee where necessary to ensure all compliance data is up to standard. 
• The CEO – alongside other dedicated roles such as chief sustainability officer (CSO) – is responsible for executing the materiality assessment, integrating ESG into the risk register, and driving the overall sustainability ambition on the ground. 
• The CFO and other key players in the finance portfolio take the lead as the parties responsible for data control systems and external assurance readiness, working with the audit committee where required. 

This structured approach ensures that the CFO and finance function lead the digital transformation of ESG data. At the same time, the board maintains the authoritative oversight necessary to attract capital and stakeholder trust.

Even though companies continue to evolve their ESG structures to match what’s above, in practice, hurdles will always be present. Here are some of the most common ones:

• Without a clear RACI, the board and management may assume the other party has “ultimate responsibility” for handling climate risks. Unchecked, this can lead to material vulnerabilities—such as supply chain disruptions—being entirely overlooked.
• One of the most common issues with ESG is that it continues to be possible for companies to relegate the topic to a standalone committee that operates in a vacuum, disconnected from financial and strategic discussions. This risks the board missing the financial materiality of climate or social risks.
• A profound technical fluency gap exists in many boardrooms. Directors may be experts in finance but lack the technical skills to evaluate climate scenario assumptions or biodiversity dependencies, potentially leading to unintentional “greenwashed” claims and personal liability.
• If the board focuses on ESG only as a year-end reporting event rather than a year-round cycle, it faces “audit friction”. They might be unable to engage with the data that’s accessible to them meaningfully.

Unless you’re in an outlying jurisdiction like the US, compliance issues around ESG continue to amplify. There’s no more room for box-ticking, side projects or treating ESG like a vague, optional extra. Instead, the topic demands full integration and codified, specific responsibilities. 

While most companies will have individual plans for how this looks in practice, the template described above is an excellent starting point for deciding who owns what.

• Board Oversight of Sustainability and ESG | IFAC
• Comparison of Significant Sustainability-Related Reporting Requirements (May 13, 2025)
• ISSB New Standards 2025: Latest Changes & Reporting Summary – Seneca ESG
• The Role of Board Oversight in ESG – A 2025 Perspective
• Sustainability and ESG oversight: the corporate director’s guide – PwC
• ESG Oversight: The Board’s Role and Focus – KPMG agentic corporate services
• A regulatory pause lets audit committees refine ESG priorities – KPMG International