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- Boards of directors are naturally positioned to help businesses prioritise climate action.<\/li>\n
- Boards take a long-term view and hold management accountable for delivering on goals.<\/li>\n
- Boards can drive collaboration.<\/li>\n<\/ul>\n<\/div>\n\n
\u201cA code red for humanity.\u201d<\/p>\n<\/div>\n
\nThat\u2019s how UN Secretary General Ant\u00f3nio Guterres\u00a0described<\/a>\u00a0the recent climate projections from the Intergovernmental Panel on Climate Change (IPCC). The report was published during a summer that\u00a0brought<\/a>\u00a0historic, deadly flooding in western Europe and China, uncontrollable fires in the Mediterranean and the western United States, and heat in the Pacific Northwest of the United States so\u00a0extreme<\/a>\u00a0it melted cables and buckled roads. The report projects such disasters will soon be far more common \u2013 and far more severe.<\/p>\n<\/div>\n
\nYet in spite of countless warnings and reports, we are still not seeing the kind of decisive action needed to combat this crisis.<\/p>\n<\/div>\n
\nHave you read?<\/span><\/h3>\n
How to follow our Sustainable Development Impact Summit 2021<\/a><\/p>\n<\/div>\n
\nWhile COVID-induced lockdowns initially brought unexpected environmental\u00a0benefits<\/a>, nearly two-thirds of executives in Deloitte Global\u2019s 2021 climate survey\u00a0reported<\/a>\u00a0the pandemic and resulting economic downturn caused them to cut back on their organisation\u2019s sustainability efforts. At a moment when sustainability actions need to significantly accelerate, many organisations were forced to take a step back. At the same time efforts were pulled back, over a quarter of executives surveyed indicated their organisations were already feeling the operational impacts of climate change.<\/p>\n<\/div>\n
\n \n![\"What](\"https:\/\/assets.weforum.org\/editor\/gxcJPPXUqn7DQQ_a6kgBuZiAyvxuqACjUzrezspVhfk.png\")
<\/picture><\/div>\n<\/div>\n How climate change is affecting business<\/div>\nImage: Deloitte Global 2021<\/div>\n<\/figcaption><\/figure>\n\nBusinesses must prioritise climate change risks \u2013 and boards of directors are well positioned to help lead the charge.<\/p>\n<\/div>\n
\nWhy is that? Well, taking on climate change requires three important things:<\/p>\n<\/div>\n
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- Long-term thinking in a world dominated by short-term pressures.<\/li>\n
- Greater trust in the institutions that can lead large-scale change \u2013 at a time when this trust is deemed to be at record\u00a0lows<\/a>.<\/li>\n
- Unprecedented global collaboration.<\/li>\n<\/ul>\n<\/div>\n
\nSignificant challenges \u2013 yet precisely the areas where boards have the power to help companies excel.<\/p>\n<\/div>\n
Taking the long-term view<\/h2>\n
\nHumans naturally tend to be poor at thinking long term, and current business practices can exacerbate this tendency. When the next quarterly earnings report is perpetually right around the corner, it is understandable that the next quarter\u00a0century<\/i>\u00a0could fade easily from an executive\u2019s focus.<\/p>\n<\/div>\n
\nBoards, however, are charged with taking a longer view: understanding future risks and opportunities, and ensuring the organisation\u2019s present strategy is setting it up for long-term success. And as boards look to the future, now, there is consensus that climate change poses a serious threat to all businesses \u2013 from natural disasters disrupting operations, to resource scarcity and biodiversity loss threatening supply chains. The businesses likely to be most resilient in this uncertain future will be those that act now to build sustainability into every aspect of their operations.<\/p>\n<\/div>\n
\nHave you read?<\/span><\/h3>\n
Now is the time for companies to act on sustainability reporting<\/a><\/p>\n<\/div>\n
\nIt\u2019s incumbent upon boards to help shape this long-term strategic vision and oversee the roadmap of actions management will take in the shorter term to achieve it.<\/p>\n<\/div>\n
Building trust and accountability<\/h2>\n
\nOf course, boards have the ability to help lay out this roadmap and hold management accountable for delivering on it.<\/p>\n<\/div>\n
\nCurrently, climate misinformation and incidents of greenwashing have led to skepticism over whether businesses are committed to climate action. Boards can play an important role in helping their organisations take steps that re-establish basic trust with key stakeholders.<\/p>\n<\/div>\n
\nThat starts with helping to ensure that business leaders, and their employees, have a universal foundation of knowledge about climate change to understand the true impact their organisation\u2019s actions are having on the planet as well as steps they can all take to reduce their carbon footprint.<\/p>\n<\/div>\n
\n\nENERGY, MINING, METALS, BLOCKCHAIN<\/span><\/p>\nWhat is the World Economic Forum doing to help companies reduce carbon emissions?<\/h4>\n<\/div>\n<\/div>\n<\/div>\n
\nAt Deloitte, we recently rolled out a\u00a0climate learning program<\/a>\u00a0for all 345,000+ Deloitte professionals as part of our\u00a0WorldClimate<\/i><\/a>\u00a0strategy to empower and inspire our people to take climate action. Already, we have seen that establishing this shared base of understanding has led to more productive conversations, stronger climate leadership and more sustainable choices.<\/p>\n<\/div>\n
\nBoard members overseeing climate strategy for entire companies require an even more sophisticated level of understanding. Chairs will need to ensure that board members have the knowledge and skills to ask management the right questions about sustainability progress, and push them to report on it clearly, consistently, and comprehensively.<\/p>\n<\/div>\n
\nThat\u2019s no easy task \u2013 but fortunately, they won\u2019t have to do it alone.<\/p>\n<\/div>\n
Driving collaboration<\/h2>\n
\nAny serious effort to take on global climate change will require, as former Unilever CEO Paul Polman puts it, \u201cradical collaboration<\/a>\u201d \u2013 leaders coming together to share best practices, inspire greater commitments and work together to address the climate challenges facing us.<\/p>\n<\/div>\n
\nBoard members are naturally positioned to help lead these efforts. And the good news is that they are already taking action. For instance, the World Economic Forum\u2019s Climate Governance Initiative<\/a>, a growing community of non-executive board directors with chapters in over 20 countries, helps educate, mobilise and equip boards with the tools they need to lead their organisations to a net-zero carbon economy.<\/p>\n<\/div>\n
\nHave you read?<\/span><\/h3>\n
Why ‘business as usual’ is not an option after COVID-19<\/a><\/p>\n<\/div>\n
\nEven industry competitors are turning to collaboration to pursue sustainable solutions. Earlier this year, Deloitte joined over 60 business leaders, including leading competitors, at the World Economic Forum to\u00a0develop and commit to<\/a> a global, systemic solution for ESG reporting. These metrics will give stakeholders, suppliers, and shareholders a common language as they work together toward sustainability goals.<\/p>\n<\/div>\n
\nTackling climate change is emerging as one of the greatest tests humanity has ever faced. Yet short-termism, mistrust, and segmentation are challenges organisations have been dealing with for years \u2013 and challenges boards were specifically designed to help solve.<\/p>\n<\/div>\n
\nBoards and their chairs have the power and the responsibility to lead us through this moment of trial \u2013 and leave a legacy worth inheriting.<\/p>\n
- Unprecedented global collaboration.<\/li>\n<\/ul>\n<\/div>\n
![\"What](\"https:\/\/assets.weforum.org\/editor\/responsive_large_webp_m_CXRkTw2hYN6uuynqlaZbLm8Gu-GVKRiGZkBfXGg78.webp)
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