Our journal this month reviews our Climate Change Conference 2022, held in January this year to share expertise and build knowledge and understanding of the climate- related risks and opportunities facing organisations today. The gravity of the climate change threat has become increasingly evident in successive reports of the United Nations’ Intergovernmental Panel on Climate Change, but, as awareness of the threat increases, the response to it has in turn become a lot more coordinated.
Our Institute’s conference is part of that response. The first session of the conference started with a tour of the latest relevant regulatory trends, both here in Hong Kong and globally. In jurisdictions around the world, we are already seeing disclosures aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) beingn made mandatory for larger businesses, along with obligations to disclose targets to transition to carbon net zero. Another major development has been the creation of the International Sustainability Standards Board to harmonise the world’s fragmented sustainability disclosure standards.
Regulatory regimes are also increasingly targeting the board’s role and responsibilities in this area. The TCFD, in addition to promoting its recommended disclosures, also reviews the degree to which organisations are adopting them. One finding has been that reporting on companies’ governance structures and practices relevant to climate change has relatively low compliance levels. Regulators, Hong Kong Exchanges and Clearing Ltd included, are keen to reinforce the message that the governance of climate-related risks and opportunities is a board-level concern.
This takes the fight squarely into our territory as governance professionals. Members of our profession can play a key role in helping to get issues relevant to climate change the attention they deserve on the board. Our cover stories this month offer a wealth of practical guidance on how best to go about that. While the compliance imperative – the need to stay on the right side of the regulatory requirements mentioned above – will always be a good starting point, this month’s cover stories emphasise the benefits of also highlighting the bigger picture.
Scenario analysis, for example, is a good way to get the board to consider the potential impacts of different climate scenarios. Similarly, setting up a dialogue between board members and key stakeholders, inside and outside the organisation, is a powerful way of getting the board’s buy-in on climate- related issues.
A key takeaway, then, is that taking a compliance approach to these complex issues will not be sufficient. Organisations of all kinds need to take these issues seriously if they want to survive and thrive in the low carbon, less environmentally destructive world that we need to transition to if we are to avoid the worst effects of climate change, biodiversity loss and environmental degradation. It is a sobering thought that the only organisations likely to be around in the next 10 to 20 years will be those that have already successfully integrated sustainability goals into their core business strategies.
Our Institute’s conference is part of that response. The first session of the conference started with a tour of the latest relevant regulatory trends, both here in Hong Kong and globally. In jurisdictions around the world, we are already seeing disclosures aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) beingn made mandatory for larger businesses, along with obligations to disclose targets to transition to carbon net zero. Another major development has been the creation of the International Sustainability Standards Board to harmonise the world’s fragmented sustainability disclosure standards.
Regulatory regimes are also increasingly targeting the board’s role and responsibilities in this area. The TCFD, in addition to promoting its recommended disclosures, also reviews the degree to which organisations are adopting them. One finding has been that reporting on companies’ governance structures and practices relevant to climate change has relatively low compliance levels. Regulators, Hong Kong Exchanges and Clearing Ltd included, are keen to reinforce the message that the governance of climate-related risks and opportunities is a board-level concern.
This takes the fight squarely into our territory as governance professionals. Members of our profession can play a key role in helping to get issues relevant to climate change the attention they deserve on the board. Our cover stories this month offer a wealth of practical guidance on how best to go about that. While the compliance imperative – the need to stay on the right side of the regulatory requirements mentioned above – will always be a good starting point, this month’s cover stories emphasise the benefits of also highlighting the bigger picture.
Scenario analysis, for example, is a good way to get the board to consider the potential impacts of different climate scenarios. Similarly, setting up a dialogue between board members and key stakeholders, inside and outside the organisation, is a powerful way of getting the board’s buy-in on climate- related issues.
A key takeaway, then, is that taking a compliance approach to these complex issues will not be sufficient. Organisations of all kinds need to take these issues seriously if they want to survive and thrive in the low carbon, less environmentally destructive world that we need to transition to if we are to avoid the worst effects of climate change, biodiversity loss and environmental degradation. It is a sobering thought that the only organisations likely to be around in the next 10 to 20 years will be those that have already successfully integrated sustainability goals into their core business strategies.
