Why climate responsibility is a non-negotiable for board directors

Ross Springolo FAICD believes climate governance is simply good governance and impacts every decision made in the boardroom.

I sit on boards and audit and risk committees across the Northern Territory and nationally. In my substantive role, I'm company secretary of the Northern Australia Infrastructure Facility (NAIF), a Commonwealth special investment vehicle.

Recently, NAIF ran a pilot on climate reporting to prepare for the introduction of the mandatory reporting regime.

Watching that process unfold from the periphery, I realised I needed to understand this space properly, not as a technical exercise, but from the perspective of a director.

It's this perspective that led me to the AICD's fantastic Climate Governance for Australian Directors short course.

I wanted to know what questions I should be asking in the boardroom and how to advise the boards I work with when they might seek my advice.

The single biggest takeaway for me was that climate governance is really just good governance. Too many directors may still treat climate change as a scientific debate. Is it one degree, two degrees? That's not a conversation for directors.

The real conversation is pragmatic. How do we factor climate impacts into every decision we make? Because our suppliers. our regulators and our funders are asking.

The course pushed us into scenario planning, and reframed how I think about risk. Take Melaleuca Australia, a humanitarian settlement organisation I chair in the NT. Wed never really asked whether climate change would affect us directly, until we considered we sit in a cyclone zone. If a cyclone took the roof off our building tomorrow, what's our plan for business continuity? That's no longer a hypothetical. it's a governance responsibility.

It plays out in smaller, more immediate ways, too. I'm currently reviewing policy for an organisation here with extensive sporting facilities - and heat stress is now a live governance question. Darwin's wet-season temperatures are creeping higher and a board that hasn't updated its heat policy. or isn't enforcing it, is carrying real liability risk.

Financial risk

What struck me most was the financial dimension. This isn't only about environmental responsibility. it's about organisational survival. If a funding body asks for your transition plan to net zero and you don't have one, don't be surprised when that money goes elsewhere. It's the same logic insurers now apply to cybersecurity. If you can't demonstrate your staff have baseline training and your risks are managed. you can't expect to be covered when something goes wrong.

The course also stressed the importance of good data. As directors, we have to discharge our duties under the Corporations Act with the best information available, not just gut feeling. There's no shortage of data available to support sound decision making. The job is to go and find it.

I did the course online, at my own pace, working through the videos and comprehensive course notes around an already full schedule. Others in my cohort did it online through weekly webinars with the facilitators. The flexibility made it genuinely accessible, despite my calendar.

If l had one message for other directors, it is that climate governance sits alongside the other risks we've all had to learn to manage over the past decade, including cybersecurity and now Al. These topics weren't board agenda items a few years ago. All of them are now. Climate change isn't a debate to be had in the boardroom. It's a risk to be governed. If it's not yet on your risk register, it should be. 

This article first appeared as 'Hot topic' in the Oct/Nov issue of Company Director Magazine.