Boards-Impact-Forum
As the stewards for long-term performance and resilience, the board should structure determine the most effective way to integrate climate considerations into its structure and committees.
Sustainability governance helps a company implement sustainability strategy across the business, manage goal-setting and reporting processes, strengthen relations with external stakeholders, and ensure overall accountability. It’s important to keep in mind that there is no cookie-cutter structure that can be applied; every company must tailor its approach for what makes most sense given its business model, structure, resources, and level of sustainability integration into the business.
This paper proposes the sustainability committee as a mechanism for managing and governing sustainability and provides guidance on this issue to directors and senior managers. It draws from good practice examples of sustainability committees in both developed and emerging markets, which include: Australia, Brazil, Germany, Italy, Malaysia, Netherlands, New Zealand, Saudi Arabia, South Africa, Sri Lanka, Sweden, Switzerland, the United Kingdom, and the United States.
Audit committees are critically important to effective climate governance. While the board of directors has responsibility for oversight of the company’s strategic planning, business plan, risk management, and integrity of its public disclosures, its audit committee is commonly delegated responsibility to undertake detailed scrutiny and oversight of financial reporting processes, including the company’s financial statements. The audit committee thus has a key role in determining how the company’s strategies and financial results are communicated to investors, regulators, and other stakeholders. Given the growing direct and indirect financial impacts of climate change, directors have a duty to adopt a climate action strategy to tackle what Canadian courts have called ‘an existential threat to human civilization and the global ecosystem’.
Context In the last few years, expectations on whether—and how—companies should engage on climate change have evolved. Companies and investors now largely understand that climate change poses clear financial and even material risks to companies and industries across the economy. Additionally, climate change is now widely recognized as posing a systemic threat to financial markets […]
