On Wednesday, 12 October, the AICD will host a live webinar as part of the 24-hour virtual conference Global Summit 2022: Ambition to Action, which is part of the Climate Governance Initiative. Join us as we host special guest speaker Tim Stutt, Australian lead for ESG at Herbert Smith Freehills and a partner in its corporate practice, who specialises in governance. For the webinar, he will focus on how board committees and other board structures can help companies to address climate risk and support the board to bring ESG into decision-making.
A significant number of companies are now factoring climate risk into their approaches to governance and many are using structures such as board committees to assist with reporting obligations and other requirements, according to Tim Stutt, Australian lead for Environmental, Social and Governance (ESG) matters at Herbert Smith Freehills (Freehills) and a partner in its corporate practice.
“A committee can make a really big difference in how companies are approaching this,” he told the AICD in an interview.
“Quite a lot of companies are going down this path. When you look at the volume of ESG regulation which is coming through, and the need to navigate different reporting and stakeholder expectations as well, there is a very big workload for boards on climate and ESG more broadly.”
For some companies, it might make sense to deal with the issue at a board level or through existing committee structures, says Stutt. “But for others, they might get a real benefit from having a dedicated committee focussed on ESG or sustainability to help support the board's decision-making and to bring more considered thinking into this area.” Register for the webinar here.
As part of the webinar on 12 October, Stutt will discuss how boards can best approach climate risk and ESG through their board structures. “The reason a committee can have quite a big impact is it can be a bit of a centre of excellence, or really support the way the board thinks about these issues.
“Climate change is something which has a number of touchpoints across the business, from risk management to capital allocation, to disclosure, to the way it interfaces with stakeholders and regulators.
“A committee can be a good way of bringing a company up the curve and helping support the board and thinking about those issues. It's not the only mechanism, however.”
The AICD webinar will form part of the 24-hour virtual conference: Global Summit 2022: Ambition to Action, a flagship event of the Climate Governance Initiative. The event, to be attended by directors and leaders across the globe, is focussed on regional and global insights on climate governance and will feature keynote speeches, as well as panel and workshop discussions.
The aim is to discuss effective climate governance and hear about best practice actions already underway in boardrooms. “It’s all focussed on moving the dial on effective climate governance,” says Stutt.
Freehills will also publish a practical guide on board structures to support climate governance and ESG sustainability this year, he adds.
“The guide aims to help boards decide their approach to integrating ESG into their decision-making. There is no one size fits all for this issue. For some companies, it will sit with the board. For other companies, it will sit in existing board committee structures. For others, they may look to introduce new committees. What the guide aims to do is unpick some of the considerations sitting around that.
“So for instance, how might you integrate risk versus disclosure, versus oversight of compliance and how would you approach bringing that into the board's decision-making and oversight functions?
“It aims to be a practical guide to step through some of those considerations. But it also includes a template charter, which is a jumping off point for companies in thinking about what a standalone ESG or sustainability committee may look like.”
Regardless of governance structure, the critical challenge is for boards to proactively think about climate change and the effects it has on their business, as well as ESG more broadly, says Stutt. “It’s important for all organisations to understand what the material risks and opportunities are in relation to ESG in the context of their business.”
Register for the Global Summit here
Already a member?
Login to view this content