Today's CEOs face the challenge of not only balancing the priorities of multiple stakeholders, but also addressing a broad array of environmental, social, and governance (ESG) issues. As they identify the areas on which their companies should focus, their north star should be where their firms can have the biggest positive impact, as emphasized in a new report by The Conference Board ESG Center. Specifically, the impact that companies can have on their own welfare, that of their stakeholders, society at large, and the natural environment.

CEOs should consider three key areas where they can move the needle: the products and services they offer in the marketplace, how they operate their businesses and treat their employees in the workplace, and the actions they take through government relations, communications, and corporate citizenship in the public space.

The report also notes that CEOs should work with their boards to ensure that ESG is appropriately integrated into their companies' strategies and goals. And as they turn to implementation, integral to success will be having their C-suites aligned—a significant task in and of itself, and one that the CEO is best positioned to lead.

The Conference Board produced the study with the support of KPMG, Morrow Sodali, and Weil, Gotshal & Manges. It is based largely on their recent roundtable exclusive to CEOs. Running through all the report's insights is the centrality of the CEO in driving ESG.

"While CEOs may initially find it useful to develop a 'sustainability strategy,' the goal should be to incorporate ESG into planning to such an extent that the company has a 'sustainable strategy,'" said Paul Washington, co-author of the report and Executive Director of The Conference Board ESG Center.