It is London Climate Action Week (22-30 June), a topic that is of increasing importance to businesses, stakeholders, and their boards.
As a board advisor and non-executive director, I have seen an increase in businesses considering sustainability, paired with increasing legal requirements to disclose climate-related reports.
Non-execs may have a particularly important role to play in ensuring that companies provide high-quality climate-related financial and non-financial and sustainability reports which reflect the interests of all stakeholders and help to maintain and promote reputation of their company.
Board awareness of their responsibility towards climate strategy has increased in recent years, with 42% of board chairs describing it as a ‘top three priority’ and 61% recognising that climate change will impact operations and strategy in the next few years.
Board chairs in particular have a crucial role in managing priorities, ensuring boards have the relevant knowledge to discuss challenges, and incorporating climate action into business strategy and culture.
Tips to make climate action a priority for your business
As a board chair, you are likely facing many challenges when it comes to climate action, including focus on short-term priorities, change management meaning projects won’t be seen through to completion, costs and differing stakeholder priorities.
These tips from over 200 board chairs globally can help you assess and manage your board’s ESG discussions.
6 Questions to ask to assess Board readiness for climate governance
- How can we most effectively integrate the climate agenda into business strategy?
- How do we balance investment necessary in climate transformation with pressures for short-term results?
- How can we manage divergent stakeholder interests and expectations while meeting regulatory developments?
- How can committees work best to support the board’s broader climate agenda?
- Are we doing enough to help boost our climate literacy?
- In my role as chair, how can I advocate for meaningful change?
How to bring climate strategy and business strategy together
- Champion the climate agenda by including it in corporate strategy discussion
- Integrate climate into risk management activity – recognise the opportunities of your climate strategy to innovate further and create a loyal customer base
- Break long-term commitments into smaller targets and actions, connect to the business model and key performance indicators
- Tie climate performance to management remuneration and incentives
How to lead across stakeholder groups
- Ensure communication is productive and two-way. Investors in particular expect information that is recognised globally and want to understand regulations and standards.
- Leverage employees’ advocacy by sharing the climate strategy and progress – help to build the brand and a sense of pride among employees.
- Prioritise what stakeholders want to know about climate action by having that discussion.
- Some stakeholders’ interests may be prioritised over others if they can have a bigger impact on long-term success.
Promote climate education and knowledge through:
- Educational and upskilling opportunities for boards through group sessions and self-learning opportunities.
- Invite experts to lead board and committee discussions.
- Appoint a sustainability expert to the board as an ongoing support.
- Broaden the diversity of the board – studies have shown diverse boards do better across almost every climate action indicator.
As chair, you lead the board in understanding the longer-term impact the business can have on climate change, perhaps beyond your tenure.
If you would like further support improving your combined climate and business strategy to create sustainable business growth, get in touch.
