The Australian Institute of Company Directors (AICD) has released a first-of-its-kind study into how climate governance is evolving as an issue facing directors and their boards.
The Climate Governance Study: Risk and opportunity insights from Australian directors was undertaken to better explore director views on climate governance. It involved a survey of more than 2,000 respondents and targeted interviews with senior non-executive directors.
The research revealed that most directors (77 per cent) are concerned about the risk climate change poses to their organisation.
Both the survey and interviews showed that many boards were taking significant steps to address climate governance issues, primarily through a negative lens. However, half (51 per cent) of directors also saw the opportunities from proactive responses to climate change.
AICD Managing Director and CEO, Angus Armour said, this is the first time these topics have been explored from the perspective of the non-executive director.
“Clearly, climate change is an issue that most directors grapple with, and they are alive to risk, but the focus has shifted to one that considers the opportunities inherent in climate change as well.
“However the results also show, that despite their intent, the scale of their concern and enthusiasm seems to not yet have been translated into concerted action in all boardrooms.”
Almost half of respondents (46 per cent) see the lack of a settled national climate change policy as a barrier to effective climate governance.
Other barriers included a focus on near term business issues/demand from stakeholders and the complexity of the topic making risk/operation assessment difficult.
“This study confirms that there is considerable demand for more support, and directors are elevating their focus on this complex challenge. The AICD is committed to helping directors on this path towards a carbon neutral future for their organisations and the nation,” Mr Armour said.
In August, the AICD launched the Australian Chapter of the Climate Governance Initiative championing the World Economic Forum principles for effective climate governance. This study is the first publication to be released by the Climate Governance Initiative in collaboration with the AICD.
The AICD has also recently published a Climate risk governance guide for directors and will roll out further resources, content and events in 2022.
Other key findings from the Climate Governance Study: Risk and opportunity insights from Australian directors:
- 73% of those concerned about climate risk also see opportunity in climate change
- 41% pick regulatory/political uncertainty and operational impacts as the main climate risks
- 28% do not believe their board has the knowledge and experience to adequately address climate governance issues
- 45% have embedded climate change into their risk management frameworks
- 46% believe their boards should increase the attention it pays to climate governance but ‘don't know where to start’
- 18% have undertaken some form of climate training
Media contact: Maegen Sykes 0439 167 567
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