As companies reel from the effects of COVID-19, is there a danger that transition to a net zero carbon economy will slip off the boardroom agenda?
12 May 2020, London
Board directors have been informed of the need to maintain focus on meeting the UK government’s target of a net zero carbon economy by 2050, as well as the short-term goal of reaching a 50% reduction in emissions during the decade.
Speaking at a webinar jointly organised by Chapter Zero and Willis Towers Watson, Susan Hooper, Chapter Zero steering group member and non-executive director who sits on boards including Uber UK, Wizz Air and Affinity Water, said, “COVID-19 has truly been an eye opener to the disruptive power of extreme events, but remember, there won’t be a vaccine for climate change.”
A poll of the over 150 webinar attendees, comprising mainly non-executive director members of Chapter Zero, found that just over half of the companies on whose boards they serve have so far developed a ‘net zero’ strategy.
Rowan Douglas, head of Willis Towers Watson’s Climate and Resilience Hub, who chaired the webinar, commented, “That result shows that progress in addressing climate risk and resilience is being made in some boardrooms but that there is an urgent need and opportunity to build further momentum across the business spectrum.”
The directors’ climate forum’s aim is to help directors have high-quality and effective boardroom discussions and debate the impacts of climate change on their businesses and strategic response. That aim is supported by chairs such as David Tyler of Hammerson plc and Sarah Bates of Merian Global Investors, amongst others, and partners such as the Confederation of British Industry (CBI).
Rain Newton-Smith, chief economist at the CBI, noted: “The sooner we act, the lower the cost to our economy and planet. The CBI’s current focus is to learn from companies that have set clear targets and share that experience more widely across our business and industrial community. One positive that I think has come out of COVID-19 is that it has shown the ability of government, the public sector and companies to come together quickly and positively to tackle major challenges, of which decarbonising our economy is clearly one. It has also given us a sense of what everyday, more sustainable life could look like.”
Among those companies implementing net zero carbon strategies is Hammerson plc. Chair David Tyler said its rolling climate risk reviews and detailed climate governance structure had resulted in a 60% reduction in carbon emissions in the past 13 years. “Inevitably, there will be companies that are just trying to get through the COVID-19 crisis, but I really hope the pandemic will be a wake-up call to teach us the importance of planning for the worst given the extent of the risks associated with climate change. Directors need to do their bit to ask the right questions.”
The webinar also served to provide non-executive directors with insights into the Directors’ Climate Journey. The new initiative, developed by Chapter Zero, sets out eight steps to help non-executives initiate and participate effectively in conversations about how to respond to the climate challenge. The framework can be accessed on the Chapter Zero website and is designed to support the directors’ climate community as they endeavour to Build Back Better.
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Paul Harris, FTI Consulting
NOTES FOR EDITORS
About Chapter Zero
Chapter Zero was established to increase awareness of the business implications of climate change; to provide knowledge on the issues as well as toolkits and frameworks; and to deliver seminars and modules for members, giving access to pools of experts and a network of other board directors. The goal is to ensure high-quality and effective boardroom debates and decisions.
Chapter Zero has been formed by board members for board members, under the auspices of the World Economic Forum. The members are key influencers in their board roles, and their engagement is vital if companies are going to fully assess their risks, identify and invest in the right opportunities, and develop their own business strategies for climate change mitigation and adaptation.
In just nine months, the Chapter has reached more than 800 members, and 43 of the companies in the FTSE 100 have at least one Chapter Zero board member. This rapid growth shows the non-executive community’s acknowledgement of the increasing urgency of climate change action.
Further details of Chapter Zero’s goals and forthcoming activities, as well as enrolment information for membership, can be found on www.chapterzero.org.uk.
Chapter Zero Limited, registered as a company limited by guarantee (12062028) in England and Wales.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets.
Driven by regulatory, investor, consumer, employee and operating pressures, the Climate and Resilience Hub is the focal point for the company’s climate expertise and capabilities, delivering climate and resilience solutions from across its people, risk and capital businesses. This includes services under our Climate Quantified™ brand, integrating our comprehensive capabilities to help clients in the corporate, finance and public sectors.