Build back better: green issues in the boardroom
20 July: Chapter Zero Chair Julie Baddeley reflects on how climate change has moved up the board agenda, the rise of green capital, and the demand for effective climate-related reporting.
It is exactly one year since the launch of Chapter Zero and therefore a good time to reflect on some of the changes that have taken place during our inaugural year. Climate change has moved firmly up the board agenda and we have seen what the necessary regulatory response to an existential threat can do to individual sectors and the entire economy.
Investor interest in Environmental, Society and Governance (ESG) issues has increased massively, as has consumer and employee concern. Provision of green capital has expanded and the demand for transparency and effective climate-related reporting has become much louder. More than 1,000 companies have signed up to voluntary TCFD reporting, which is predicted to become mandatory in 2021.
Closer to home, Chapter Zero, the Director’ Climate Forum, supported by ICAEW and its other partners, has grown a membership of more than 900, run upwards of 30 events, and developed a set of tools for boards to assess their climate response and develop a strategy to contribute to the UK Government’s goal of net-zero greenhouse gas emissions by 2050.
Meanwhile, more Chapters are being established throughout the world, including Italy, France, Malaysia, Brazil, Russia, Canada, Hong Kong; many with the help of Chapter Zero in the UK and all committed to promoting the World Economic Forum’s Guiding Principles for Effective Climate Governance on Corporate Boards
Those companies which are not yet ready, need to prepare now for their TCFD (Taskforce for Climate Related Financial Disclosure) disclosure, if they are to gather the necessary data to report accurately on their operations in 2021. This means testing their operating models against the TCFD scenarios and assessing the end to end carbon footprint of their value chains.
A possible global pandemic was clearly cited on international risk registers, and yet most companies were not prepared for its impacts. Climate change is much more certain. We are not sure exactly when the physical impacts and regulatory action will come, but there is no doubt that they will be there and will be pervasive. It is becoming increasingly apparent that keeping warming to 1.5 degrees will require major government action. Sadly, there will be no vaccine for climate change.
In the immediate future, the challenge of Build Back Better is resonating around the world.
At Chapter Zero we recognise that boards have had and still have, a lot to deal with, but our members tell us that keeping climate change and ESG issues front of mind in the boardroom is vital if we are to create a new, sustainable economy. Chapter Zero has some things to support you in the boardroom:
- Our latest toolkit helps companies develop their climate strategies and shares case study examples
- The Chapter Zero Directors’ Climate Journey guides non-executive directors as they build their climate competence
- On-line events that are specially tailored for a board non-executive audience
- And our website presents the most relevant information in an accessible way.
In case you missed it, read here the letter recently published in the Financial Times which calls on everyone involved in business to work together to Build Back Better, and use the opportunity of COP26 in November 2021 to showcase the UK’s corporate response to the global challenge.
Julie Baddeley is Chair of Chapter Zero, Part of the World Economic Forum Climate Governance Initiative. You can find out more by visiting chapterzero.org.uk, get in touch by emailing email@example.com or find us on social media using #BuildBackBetter