Climate Vista: Bridging Boardroom's Climate Skills Gap
WTW, a leading global advisory, broking, and solutions firm, has launched a revolutionary programme called Climate Vista.
In the face of mounting shareholder, investor, and regulatory pressures, coupled with the rising demand for climate risk and transition plan disclosure, Climate Vista emerges as a powerful engagement tool designed to provide valuable insights to company boards and senior management, enabling them to comprehend and address their exposure to ESG and climate-related risks and opportunities.
Recognising the pressing need for businesses to tackle climate risk in a rapidly evolving landscape of regulations and policies, Will Bugler, Climate Change Learning and Engagement Lead at Climate and Resilience Hub, WTW, emphasised the urgency for boards to act swiftly.
While progress has been made in acknowledging climate and governance risks, there remains a significant climate skills gap at the boardroom level. Climate Vista acts as a catalyst for change, empowering boards to grasp the material financial risks stemming from climate change and steer their organisations towards resilience.
In a recent survey by WTW and the Nasdaq Center for Board Excellence, almost half of the respondents (48%) said their boards lacked the expertise to manage climate risks effectively. Although improvement is expected in the next three years, persistent gaps are anticipated.
Amidst the growing momentum surrounding reporting frameworks like the International Sustainability Standards Board’s IFRS S2 Climate-related Disclosures and the Transition Plan Taskforce’s Disclosure Framework, governance takes centre stage. Effective governance demands boards possess a comprehensive understanding of climate change and climate risk, enabling them to challenge and approve strategies for managing these risks.
Alarming findings indicate that only three in five respondents (62%) believe their boards dedicate sufficient time and resources to climate risk governance. The absence of robust governance exposes organisations to a wide array of risks, ranging from operational and supply chain disruptions to liabilities from inadequate disclosures and the challenges posed by transitioning to a lower-carbon world.
Hannah Summers, Director, Executive Compensation and Board Advisory (ESG & Climate specialist) at WTW, underlined the far-reaching implications of the mounting pressure from governments, investors, and civil society. These include impacts on a company’s credit rating, valuation, cost of capital, borrowing capacity, and insurance accessibility. Elevating climate governance to the forefront of boardroom discussions becomes a critical first step in equipping business leaders to successfully navigate their organisations through the transition to a net-zero future.
Encouragingly, three-quarters of the surveyed board members recognised the value of a strong ESG strategy and acknowledged the opportunities for enhancing oversight of climate and governance risks.
The cutting-edge Climate Vista tool offers customised solutions based on a company’s geographic location and sector, fostering alignment among board members and between the board and senior leadership teams.
Led by WTW climate experts and board advisers, tailored sessions within the Climate Vista framework aim to assess the board's current level of understanding, identify barriers to action, and set the desired level of ambition for climate action. By addressing weaknesses and grounding the board in climate risk fundamentals, Climate Vista inspires strategic responses to climate risk and cultivates engagement across all levels of the company.
In conclusion, Climate Vista emerges as a pivotal resource for empowering boards to address ESG and climate risks with confidence and determination. As businesses navigate the challenges of an evolving climate landscape, this innovative tool serves as a compass, guiding organisations towards a sustainable and resilient future.
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Source: WTW
