WTW has today announced the launch of Climate Vista, a new engagement tool designed to help company boards and senior management better understand their exposure to ESG and climate-related risks and opportunities.
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.
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.”
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.
Just over 60% of respondents said 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.
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