Forum launched to prepare directors for climate change risks
Chapter Zero, a climate change forum and risk advisory initiative, will launch today as part of the World Economic Forum’s global climate governance initiative
The forum will advise non-executive directors on the risks inherent to climate change and how to be prepared for the ways it will affect their companies.
Michael Izza, chief executive of ICAEW, emphasised how immediate a challenge climate change presents, as “the greatest risk of modern times”.
“Business has a fundamental role to play in leading our way out of this crisis through the transition to a zero carbon economy. Independent non-executive directors are an essential part of our corporate governance structure, including through the Audit Committee, and it is imperative they can make an informed and critical contribution.
“Chapter Zero will help ensure that the climate emergency is front of mind when boards make their decisions and that it is not just left as an agenda item,” Izza said.
Chapter Zero points out that the necessary measures to limit the effects of climate change are likely to have a knock-on effect on the corporate sector.
Citing Schroders’ research, it notes that FTSE 100 cash profits could face a £50bn annual reduction as a direct result of the key efforts to combat climate change – and as such, Chapter Zero argues, directors need to be informed well in advance.
The British government has recently committed to a net zero economy by 2050.
Carolyn Fairbairn, director general of the Confederation of British Industry, said, “Companies must respond to growing demand from investors and customers by making climate change a boardroom priority.
“Firms that act now will not only play their part in avoiding the devastating impact of climate change but also steal a march on their competitors,” she added.
Mark Tucker, chair of HSBC, also pointed out the scope for growth. “Climate change is not only one of the biggest challenges facing UK businesses today, it is also a huge opportunity”, he said.
“Meeting the challenge and making the most of this opportunity depends on corporate boards being well briefed and committed to focussed action. This is not confined to resource companies and car manufacturers. It affects all corporate sectors,” Tucker added.
Briefings on climate change, conferences, round tables and workshops will be the backbone of Chapter Zero’s work with directors. It will also set up a network of members that will contribute to the forum element of the initiative by sharing research.
Originally published in Economia on 24 June 2019.