Resilience climate change event
Panel discussion: The view from the top
THE INFORMATION REVOLUTION
A panel discussion switched the focus of the event from theoretical examples to back to practical considerations for today’s boards. Moderator Dean Carrigan , Partner in Clyde & Co’s Sydney office, pointed out that in Australia, where climate change is rapidly jumping up the political agenda, “ Prudential and market regulators are expecting the tone to be set from the top. Board engagement is vital. ”
In terms of what outputs are required to ensure that reporting is appropriate, David Rule said that although consensus among industry is growing that the TCFD is the right approach, many companies are struggling to understand what they need to do, especially since many of the guidelines are recent and because this is an evolving area. “ There’s a real need for consistent information, ” he said. “ Assurance around financial statements is a key issue, especially around metrics, so that stakeholders know they can trust what companies are saying. Investors also need this for their own reporting. ” Looking ahead, he said that the FRC will be looking at company reporting and audits ahead of the COP 26 UN Climate Change Conference in Glasgow later this year. Information was also front of mind for Rowan Douglas, Head of the Capital Science and Policy Practice at Willis Towers Watson. He anticipated the information revolution that is set to happen in the next 10 years, re-shaping what business understand about themselves and what others understand about them. He added that although the regulations are in place, the quantification methods and metrics have not yet been standardised and forecast that it could take a decade for risk factors to be fully embedded into organisations. When it comes to information and reporting, Rosalyn Schofield’s advice was: “ Be honest in your reporting. Say how challenging this is and what you are prioritising. Be open and transparent. ”
EMBEDDING RESPONSIBILITY
Asked how boards should be approaching climate change issues, David Rule , Executive Director of Supervision at the FRC said, “ This is existential for most businesses, so the board has to take leadership, with a comprehensive approach across the business. ” Referring to the earlier scenario question about whether there should be a centralised board committee, his view was that individual executive leadership is important as well. Alan Stewart , CFO at Tesco, also flagged up the importance of executive responsibility in feeding strategy from the top down into business lines. He urged, “Boards must think about how to make this work from the inside out, rather than the outside in. Only when it becomes important to individuals do you get real change.” Companies can impact the legislative agenda by doing more voluntarily – mitigating the need for governments to increase regulation, argued Rosalyn Schofield , member of the Adaptation Committee of the Committee on Climate Change.
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