2020 Climate Challenge – Is The Board Prepared?

As Fidelio wrote recently in a Table Talk on the key issues that gained salience for Boards during 2019, climate change has rapidly made its way up the Board Agenda. Meanwhile the drumbeat of scientific evidence continues with disturbing news on temperature patterns including  in the UK.

The sharp rise in concern about climate change is reflected not just in the tenor of Fidelio’s Board Evaluation and Search assignments, and in increasing numbers of climate events and protests, but also in the number and prominence of public figures speaking out on the issue. These included Mark Carney, soon to step down as Bank of England Governor in March 2020, and due to take up a role as a United Nations Special Envoy on Climate Action and Finance.

Mark Carney has played a pivotal role in alerting regulators and Financial Services Boards to the risks of climate change for investors, insurers and lenders. Clearly good financial reporting will be critical. A prominent supporter of the Task Force for Climate-related Financial Disclosures (TCFD), Mr Carney gave a speech to the 2019 TCFD Summit in Tokyo, emphasising the progress to date and work needed to drive change, as well as the opportunities presented by TCFD:

“Better TCFD disclosure is an opportunity. Research by the Bank of England and PwC finds a positive correlation between companies’ stock price and the number of TCFD disclosures that firms make. This could be because investors reward companies that are leaders in managing climate-related risks or simply because TCFD adoption identifies companies that are more naturally disposed to longer-term strategic thinking and planning.”

Mark Carney, TCFD: strengthening the foundations of sustainable finance, October 2019

Climate change strategy and competence will continue to be a priority for Fidelio in 2020 and the decade ahead, and we are committed to supporting Boards in dealing with this complexity through Evaluation, Search and Development. In this Overture we set the scene.

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