Climate change is now firmly on the agenda for boards. Yet a gap remains between what directors say about climate change (essentially, that’s it’s a critical strategic issue) and what their companies do about climate change (essentially, very little). Based on a survey of dozens of directors in 43 countries, ten pieces of advice emerged for boards in 2022, including conducting a board-effectiveness review focused on climate; refreshing the board make-up to ensure climate expertise, and linking executive compensation to climate targets.
Climate change is at long last on the corporate-governance agenda, according to our research. When we surveyed 301 directors of companies headquartered in 43 countries, three-quarters of our respondents said they recognize climate as very important to their companies’ strategic success.
At the same time, however, our findings revealed a stark disconnect between what boards say and what they do. For example, in our survey, 72% reported being confident that their company will reach its climate goals, but 43% haven’t yet established any carbon-reduction targets.
The good news is that our research also suggests that the gap between good intentions and climate action is surprisingly easy to bridge. Here are ten things every board should do in 2022 in order to prepare their company for this species-critical issue.
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