WTW publishes on its website:
In a survey by WTW and the Nasdaq Center for Board Excellence, almost half of respondents (48%) reported their boards lacked expertise to respond to climate risk.
LONDON, July 26, 2023— WTW (NASDAQ: WLTW), a leading global advisory, broking and solutions company, has today announced the launch of Climate Vista. With shareholder, investor and regulatory pressure increasing, alongside the growing demand for climate risk and transition plan disclosure, Climate Vista is a new engagement tool designed to help company boards and senior management better understand their exposure to ESG and climate-related risks and opportunities.
Will Bugler, Climate Change Learning and Engagement Lead, Climate and Resilience Hub, WTW, said: “With a blizzard of regulation and policy coming down the line, the clock is ticking for companies to respond to climate risk. Business leaders have made some progress when it comes to climate and governance risks, but there remains a significant climate skills deficit in the boardroom. Climate Vista is a powerful tool that can help boards understand how climate change presents material financial risks to their business.”
According to a recent survey conducted by WTW and the Nasdaq Center for Board Excellence, roughly half of respondents (48%) reported that their boards lack the skills and expertise needed to provide effective oversight of the climate risks facing their companies. While it is expected this will improve over the next three years, gaps will likely persist.
Momentum also continues to build around emerging reporting frameworks, such as the International Sustainability Standards Board’s IFRS S2 Climate-related Disclosures (which builds on, and will supersede, TCFD) and the Transition Plan Taskforce’s Disclosure Framework. Each have governance as a key pillar. A core principle of good governance is that boards have the requisite skills and understanding of climate change and climate risk to effectively review, challenge and sign off on strategies for managing these risks.
However, only three in five respondents (62%) stated that their board has dedicated sufficient time and resources to climate risk governance. Without effective governance in place, organisations are potentially more exposed to a wider range of risks, including physical risks to operations, infrastructure or a company’s supply chain, liability risks from inadequate or misleading disclosures, and the transition risks triggered by a shift to a lower-carbon world.
Hannah Summers, Director, Executive Compensation and Board Advisory (ESG & Climate specialist), WTW, said: “Pressure from governments, investors, and civil society will soon impact everything from a company’s credit rating, valuation and cost of capital to its ability to borrow and get insurance. Putting climate governance front and centre on the boardroom table is a critical first step to ensuring business leaders are aware of their responsibilities and equipped to successfully steward their organisations through the transition to net zero, strategically managing the risks and opportunities in a rapidly decarbonising world.”
Three quarters of participating board members in the survey also recognised the value of a strong ESG strategy and acknowledged opportunities to improve oversight of climate and governance risks.
Climate Vista is a powerful tool, which can be tailored to a company’s specific geography and sector, helps promote alignment between board members, and between the board and senior leadership teams.
Through tailored sessions, led by WTW climate experts and Board advisers, Climate Vista will uncover the current level of understanding amongst the board, the perceptions of the key barriers to action, and the level of ambition the board expects the company to have on climate action. Climate Vista is then used to address areas of weakness and ground the board in the fundamentals of climate risk, building momentum to respond strategically to climate risk and deepening engagement at all levels of a company’s business.
Source