Environmental, Social, and Governance (ESG) considerations have transitioned from being a "nice-to-have" to a critical strategic imperative. For Caribbean boardrooms tasked with steering their organisations through climate risks, shifting stakeholder expectations, and an increasingly interconnected global economy, incorporating sustainable practices into good governance is no longer optional. 

The Caribbean Corporate Governance Pulse Survey 2024 and the Caribbean CEO Survey 2025 revealed that while progress is underway, there remains a significant gap between intentions and meaningful action. This article explores the current state of ESG integration in the region’s governance landscape, the opportunities it presents, and actionable steps boardrooms need to take. 

Why ESG Matters Now More Than Ever 

Caribbean countries, classified as Small Island Developing States (SIDS) are becoming more widely known as Large Ocean States, face unique vulnerabilities. Frequent hurricanes, rising sea levels and floods showcase the harsh realities of the climate crisis. The region has contributed relatively little to the causes of climate change, but we fully bear the brunt of the impact. Meanwhile, societal demands for inclusiveness and diverse representation grow louder in our close-knit Caribbean societies. 

To remain viable, Caribbean organisations must lead by example, embedding ESG into their strategies. CEOs and boards of directors should view ESG not as a regulatory burden, but as a driver of operational excellence, customer trust, competitive differentiation, and investor confidence. 

The Disconnect Between Perception and Action 

Findings from our Caribbean Corporate Governance Pulse Survey 2024 reveal a worrying gap between recognising ESG’s importance and acting on it: 

• 56% of respondents incorporate ESG into their strategies to some extent; 
• However, less than 10% strongly agree that ESG is regularly on the board’s agenda or that defined processes for ESG oversight exist; 
• Over 40% of respondents disclose little to no information about their ESG measures. 

This disparity reflects a broader challenge. Caribbean boards acknowledge the strategic importance of ESG—in areas ranging from resource scarcity to climate change—yet often struggle to transition from aspiration to action. 

ESG as a Competitive Advantage 

Rather than treating ESG as a check-the-box exercise, forward-thinking organisations in the Caribbean are seizing the opportunity to create long-term value. Here's how ESG contributes to competitive advantage: 

• Attracting Investors: Transparent ESG reporting can bolster investor confidence, particularly as global markets prioritise green and socially responsible organisations; 
• Enhancing Stakeholder Trust: Consumers and employees increasingly favour businesses that align with their values, such as diversity and environmental responsibility; 
• Mitigating Risks: ESG can help organisations anticipate and respond to systemic risks, particularly those tied to climate change and resource scarcity; 
• Driving Innovation: Embedding ESG fosters innovation by encouraging sustainable processes, supply chains, and business models. 

The Role of Good Governance in ESG 

Governance is the “G” in ESG that knits the environmental and social components into a robust framework. Strong governance ensures that ESG objectives are not only articulated but also institutionalised. There are a few ways that Caribbean organisations can strengthen governance to support ESG goals: 

1. Make ESG Central to Boardroom Discussions 

ESG must occupy equal priority alongside traditional measures of organisational performance, such as sales and financial returns. To this end: 

• Schedule ESG as a dedicated agenda item in board meetings. 
• Establish specific oversight committees focused on sustainability. 

2. Align ESG Metrics with Executive Compensation 

Currently, 42% of regional CEOs report linking sustainability objectives to executive compensation. Expanding this practice can drive accountability and meaningful action across leadership teams. 

3. Leverage the New IFRS Sustainability Standards 

The adoption of IFRS S1 and S2 disclosure standards represents a local and global opportunity for Caribbean organisations to demonstrate sustainability leadership. Boards should take a proactive stance, using these frameworks to measure, monitor, and manage environmental performance. 

Diversity and Inclusion as the Social Lens of ESG 

The findings from our governance surveys also spotlight another critical dimension—boardroom diversity: 

• Over 90% of respondents agree that diversity enhances board performance and provides unique perspectives. 
• However, nearly a quarter of boards have taken no action towards greater diversity, while another third has limited progress to mere discussions. 

Improved representation of underrepresented groups isn’t just a moral imperative; it’s a strategic advantage. Diverse boards are better equipped to identify risks, innovate, and adapt. They also resonate more loudly with stakeholders who seek inclusivity in the companies they engage with. To accelerate diversity initiatives: 

• Develop pipelines for potential board candidates through mentoring and leadership development. 
• Commit to transparent reporting on board diversity metrics. 
• Actively recruit beyond traditional networks to avoid "groupthink" and uncover untapped perspectives. 

Bridging the Gap with Meaningful Action 

Though challenges persist, there are tangible steps Caribbean boards can take to translate ESG aspirations into measurable results: 

1. Conduct Rigorous Board Assessments 

More than 40% of boards in the Caribbean fail to carry out regular assessments. These evaluations should go beyond compliance and be independently conducted for unbiased insights, creating safe spaces for confidential and honest conversations. They should include actionable recommendations tied to governance structures, ESG oversight and board composition. 

2. Educate and Empower Boards 

ESG is complex, encompassing everything from emissions reporting to social impact measurement. Boards must prioritise training to gain a deeper understanding of ESG trends, regulatory requirements, and best practices. It's imperative that our boards strive to be “learning boards”, in order to be responsive to the challenges of a complex market. 

3. Foster Collaboration 

Caribbean businesses can collaborate regionally to share expertise, align on sustainability goals, and amplify their collective impact. Pooling resources and knowledge can mitigate the region’s unique challenges, such as limited economies of scale. 

4. Connect ESG to Organisational Goals 

Whether it’s improving supply chain sustainability or creating social value in communities, ESG initiatives must align with the broader goals of the organisation. Mapping these connections will ensure that sustainability becomes everyone’s responsibility. 

5. Engage Stakeholders with Transparent Reporting 

Stakeholders, from employees to investors, want proof of progress. Ensuring clear, transparent, and accessible reporting on ESG metrics is crucial for building trust and demonstrating accountability. 

The Way Forward for Caribbean Boards 

No longer a side issue, ESG is at the heart of what defines organisational resilience and relevance in today’s rapidly evolving world. Caribbean CEOs, directors, and ESG professionals must urgently bridge the gap between intention and action. By embedding governance excellence into their DNA, they not only future-proof their organisations but also serve as beacons of sustainable growth. 

The findings of our recent surveys make it clear that Caribbean boards face a pivotal moment. Those willing to lean into ESG priorities will not only meet rising stakeholder expectations but will also unlock new opportunities for innovation, equity, and long-term success and sustainability. 

It’s time to stop talking—and start transforming. 

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