Welcome to our first Bulletin of the year; it sets out our upcoming events, points you to the latest content on our website and provides information that will help drive your board’s 2020 agenda in relation to climate change.

As we kick-off the year, here is a message from one of our Chairs, John Kingman of Legal and General:

Climate change can disrupt companies’ operations and supply chains, while new climate policies, clean technologies and changing consumer attitudes stand to challenge incumbents in many sectors. Following the Paris Agreement on climate change, we expect companies to reach zero carbon emissions on a net basis. 

Achieving this extensive overhaul over relatively few business cycles presents significant risks, with the Bank of England warning that companies which fail to adapt ‘will fail to exist’. We see a growing number of clients asking if the companies we invest in have sustainable business models. Yet for future-thinking directors and boards, this also brings significant opportunities.

  • At a glance, Chapter Zero starts the year with a membership of more than 450
  • One third of companies in the FTSE 100 have at least one Chapter Zero board member

Please let us know of any changes to your appointments so that our records are kept up to date by emailing admin@chapterzero.org.uk

Chapter Zero events in the first half of 2020
For more information and to register, please go to our events page

How to manage in the face of wholesale customer change
January, 23rd at 08:30 to 10:00, with Korn Ferry
Using the examples of “flight shame”, plastics, and automotive. Speakers: Lord Deben, John Gummer, Chair of the Committee on Climate Change, Helen Mahey of SSE plc, Charlie Curtis and Tim Kruger, co-founders of DryGro and Origen Power and Myles McCarthy, Carbon Trust.

Climate change liability risk
February, 12th at 08:00 to 10:30, with Clyde & Co
Liabilities briefing, physical impacts and transition related – and the role of the board.

Science-Based Targets Workshop
February, 13th at 08:30 to 11:00, with The Carbon Trust
A pilot workshop providing an overview of how companies can use Science Based Targets.

Role of brand in promoting climate change action
February, 20th at 08.30-11:00, with Wolff Olins
Brands change how people think, feel and act, on a massive scale. Could brand be the answer? Wolff Olins will be launching their new report at this event – Zero Heroes.

Implications of climate change for enterprise risk management workshop
February, 21st at 09:00 to 12:00, with WBCSD and Deloitte
Together with the World Business Council for Sustainable Development and Deloitte UK, we will be hosting an interactive workshop for Non-Executive Directors on the implications of climate change for enterprise risk management.

Business Risk from Climate Change
February, 26th at 1:30 to 7:30pm, with Climate Risk Event in Cambridge
This event is aimed at Chief Risk Officers, but will be pitched so that will also be useful to NEDs. The output will be a work programme to develop a Global Climate Risk Index for use in scenario planning.

Climate change resilience: scenario planning
March, 4th at 08:30 to 11:00, with The Carbon Trust
The workshop will show how to identify climate impacts and develop scenarios that illustrate potential risks and opportunities, translating these into changes in company value and cash flow.

Screening of Our planet, our business with WWF
March, 4th at 4:15 to 6:00, PWC
The screening will be followed by a panel-led debate around the issues, with panelists including PwC sustainability experts, a representative from WWF and an institutional investor with a focus on sustainable investment.

Introductory climate event for newer Chapter Zero NEDs
March, 5th at 08:30 to 10:30, with Deloitte
Climate as part of all corporate governance, remuneration, audits and investor considerations.

How can climate models help us respond to climate change?
March, 27th at 7.20pm to 8.45pm, Royal Institution
In this Discourse, Vicky Pope describes what goes into a cutting-edge climate model, how it is used to provide information on how and why the climate is changing and how it might change in the future.

Climate Crisis: Transition to net zero
April, 2nd at 08.30pm to 10.30pm, with Deloitte
The UK Government’s net zero carbon target will require sweeping changes to almost every aspect of our life and business operations. We will discuss how business is embracing this challenge and building this into their strategy along with likely upcoming regulatory change to drive further action.

May, 18th in the afternoon, Schroders
Stewardship focus on Climate Change, as well as examining some of the emerging governance debates, in light of the new FRC Stewardship Code.

May – date TBC, with ICAEW
Chartered Accountants Hall
An event for audit committee chairs and members with ICAEW – keep an eye out for the date.

June, 9th in the morning, with Global Association of Risk Professionals
A briefing at Bankers Hall for CROs, CFOs and NEDs discussing the impact of climate change across sectors. GARP will launch the results of their latest survey at this event.

Climate change resilience: scenario planning
June, 11th at 08.30-11:00, with The Carbon Trust
The workshop will show how to identify climate impacts and develop scenarios that illustrate potential risks and opportunities, translating these into changes in company value and cash flow.

Dominating the news

BlackRock CEO, Larry Fink recently sent his annual letters to CEOs and clients. Sustainability dominated this year’s letter, and there were a number of points which will impact BlackRock’s voting practices.

Larry Fink’s letter to CEOs and clients

Some of the key takeaways on voting and corporate governance were as follows:

  • “This year, we are asking the companies that we invest in on behalf of our clients to: (1) publish a disclosure in line with industry-specific SASB guidelines by year-end, if you have not already done so, or disclose a similar set of data in a way that is relevant to your particular business; and (2) disclose climate-related risks in line with the TCFD’s recommendations, if you have not already done so.”
  • “We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. Last year BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies. Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues, we will hold board members accountable. Given the groundwork we have already laid engaging on disclosure, and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.”

Matt Scott, Head of Marketing, Proxy Insight

This week, Karina Litvack is representing Chapter Zero in Davos, discussing the World Economic Forum’s Guiding Principles and questions on ‘How to Set Up Effective Climate Governance on Corporate Boards’

As Mark Carney said: The vision and action of Directors, CEOs and senior-level executives is fundamental to addressing the risks posed by climate change and delivering a smooth transition to a low-carbon economy. Materials, such as the World Economic Forum Report, will help Boards and Executives understand how to deliver on the Task Force on Climate-Related Financial Disclosures (TCFD) and foster a virtuous circle of adoption, where more and better information creates imperatives for others to adopt TCFD and for everyone to up their game in terms of the quality of disclosures made.

Resources available to you

Click here for the most recent publications from third parties added to our website.

The non-executive director’s voice

The Bank of England urges companies to respond to their discussion paper so that all stakeholders’ needs are considered in the design of the 2021 Climate Stress Test. The views of non-financial companies will be vitally important as providers of data.

As mentioned in our December bulletin, the Bank of England published a discussion paper setting out its proposal for the 2021 Climate Stress Test. It will build upon the PRA’s supervisory expectations for managing climate risks, published in April, and the 2019 Insurance Stress Test. Chapter Zero has been asked to make all our members aware of the consultation and to encourage their companies to respond.  Responses are due by 18 March 2020 and should be sent to ClimateBES@BankofEngland.co.uk. As part of its engagement, the Bank will be hosting roundtables and webinars with relevant stakeholders, details of which will be shared in due course.

Chapter Zero in the news

Chapter Zero was quoted in the Sunday Times business section this weekend, which tackled the need for climate competence on boards. Have a look at the full article here.

Appointments for the Environment Agency

The Environment Agency is seeking to recruit four new board members. As the environmental regulator with responsibility for flood and coastal erosion risk management, the Environment Agency’s purpose is to create better places for people and wildlife – and promote sustainable development.

Members of the Environment Agency Board must be advocates for environmental sustainability and have the opportunity to make an important difference to action on climate change.

Chapter Zero member, Emma Howard-Boyd, Chair of the Environment Agency, has asked us to let you know that the recruitment for four new board members is underway.  If you are interested please email ChairOfficeEA@environment-agency.gov.uk.