Climate change is a key corporate governance challenge facing Australian boards.
There is limited research, both in Australia and internationally, exploring how boards approach climate governance, its risks and opportunities.
To understand director views on climate governance, the AICD, as host of Climate Governance Initiative Australia, conducted a member survey , as well as targeted interviews with senior non-executive directors.
The Climate Governance Study: Risk and opportunity insights from Australian directors reveals that Australian boards see climate change as a key strategic and risk issue, but face capacity and resource constraints in responding to the challenge.
The results also reflect the varying levels of focus and maturity of governance approaches across Australian boards.
Australian directors are concerned about climate change risks for their organisations
- Most directors (77%) are concerned about climate change risk to organisation, with nearly one quarter (22%) ‘extremely’ concerned
- Half (51%) also see opportunities from proactive responses to climate change
Directors want to do more – but face capacity and resource limitations
- Almost half (46%) of directors want their boards to increase attention to climate governance
- Almost half (46%) of directors want to do more, but ‘don’t know where to start’
Policy uncertainty and short-term market pressures are seen to constrain action
- Directors cite policy uncertainty and a short- term focus by investors as key barriers to successful climate risk governance
Climate change is on the agenda – but risk and governance maturity is low
- There is limited reporting to boards on climate footprint and sustainability, low use of climate risk metrics and limited evidence of board training and skills assessment
- Focus and confidence on climate risk governance varies considerably between sectors
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