One of the Board’s most strategic considerations is to manage Risk, and Climate Change is becoming one of the the most complex of risk subjects that Boards need to tackle quickly. No industry sector, brand or product range is immune – it is progressing rapidly and impacting all areas from increasingly destructive weather patterns to technological change. From business model disruption and changes in customer behaviour to legal oversight and new regulation.
Not only are Boards struggling to consider their internal response but they are also being challenged by a number of key external stakeholders. New hires take into consideration a company’s response to Climate Change and ESG as one of their top considerations before joining. The most sought after candidates can choose those companies whose response to Climate Change is authentic and not just some nice words on a corporate web site. In addition, many Boards have received communications from their Shareholders in the last few months asking for specific details of Climate and ESG commitments; they want to know what is written into CEO’s objectives and it is increasingly becoming a hot topic on the Remuneration Chair’s agenda’s to discuss with executives.
So getting Climate Change onto the Board Agenda is the title of our next NED session, and never has this been more important for Boards to discuss. We are delighted to welcome Liann Eden – to talk to us about the NED toolkit she developed in collaboration with Chapter Zero- but also , Orna Nichionna and Tracey Kerr both NEDs on various prominent boards that have successfully worked this topic onto their boards agenda.
The 2 biggest change topics in UK boardrooms right now are around Sustainability and Digital transformation Chapter Zero has created a toolkit to help you navigate getting climate change onto your board agenda (Link below) It details 11 key principles which are proven drivers to gain support for climate change in the board arena ranging from making sure that climate is championed at the very top, to having a forum for ideas to bubble up from the bottom, to how best to articulate the risk climate presents. In terms of what is driving the pressure to address climate change – Global extreme weather has driven home the harsh reality that climate change is now taking its toll. Customers and clients ar pressing hard on the climate change agenda and expecting businesses to do better. Climate credentials matter enormously to employer brand (especially for the under 30’s but also increasingly under 40’s) There is also investor pressure. Within business , there is a mindset change from seeing climate change as a risk to an opportunity- companies are increasingly seeing it as good business sense, for example, investment in green technologies can lower cost base in the longer term , and sustainability linked financing is offered at a lower cost vs standard. Strong advice to frame climate change as a business issue versus a technical issue to help the board debate. We will not address the carbon emission challenge if we wait unit 2050 to shift the curve it needs to some down immediately. In terms of commitments, the advice if to go out there and state your target and then seek to improve from there For example the Burberry brand made a net zero commitment by 2040 but will have already cut half of emissions by 2030 We need our senior leaders to adopt climate change practises , the very wealthy have a carbon footprint many times the average person. Take care not to greenwash and practise what you preach; Cop 26 outcomes : It was an unrealistic expectation that we would reach a global agreement to eliminate coal Behind there scenes there was an lot of activity from the business community and much was achieved. There is a wall of money (PE, altruistic billionaires) to fund innovation to drive decarbonisation As for China, when its ready it has proven pedigree to move a lot faster than any other economy, don’t expect China to skip to the beat of the Western nations Don’t forget the power of REMCO to align the objectives of senior leaders with the climate change agenda , and provide forums for people in organisations (often younger ones) to come up with ideas and find solutions , people do care deeply and want to be part of the solution
Useful links to further information about this important topic
Liann Eden, Founding Partner
Liann was raised in upstate New York, but most of her career has been in Europe. Before founding Eden McCallum in 2000 with Dena, she was a consultant in McKinsey’s London office, worked for Unilever in European brand management, and in business to business marketing for OSRAM, the Siemens lighting business, based in Munich. Liann holds an MBA from INSEAD and BA from Smith College. Liann’s client work spans retail, travel and leisure, consumer goods and B2B services. She tries to hide the fact that she retains an unnatural level of interest in light bulbs and washing powder, but not that it was always her ambition to start a business.
Tracey graduated from the University of Sydney in 1986 with a B.Sc Hons degree. In 1987 she commenced work with BHP Minerals Exploration in Australia. While working for BHP she completed her Masters Degree in Economic Geology in 1995 at the University of Tasmania (CODES). Tracey worked for BHP for approximately 18 years, based in Australia, UK and Canada, exploring for a variety of commodities in many different countries. From 2001 to 2005 she worked in BHPB’s global iron ore exploration team, responsible for iron ore projects in South Africa and Guinea, prior to becoming Global Iron Ore Commodity Specialist for BHPB Mineral Exploration. In late 2005 Tracey joined Vale in Australia as a Technical Coordinator for the Australasian region, responsible for project generation. In 2007 she was promoted to General Manager of the Technical Services team within Vale Exploration and was transferred to Canada. The team was composed of technical specialists in different commodities and exploration techniques, responsible for best practice in Vale’s global exploration programs and technical geological input into strategic planning and portfolio management for Vale Exploration. In July 2008 she was promoted to Director, Exploration – Americas for Vale, based initially in Toronto, Canada, and later in Belo Horizonte, Brazil. In this role Tracey was responsible for Vale’s greenfield exploration projects in the Americas from early stage through to pre-feasibility for a variety of commodities including copper, nickel, iron ore, coal and fertilizers. In 2011 Tracey joined Anglo American plc as Group Head of Exploration, based in the UK. Tracey is married with two children, aged 8 and 12 . She enjoys the outdoors, hiking and camping. Tracey also has a keen interest in travel and learning languages as well as amateur astronomy.
Orna NiChionna studied Electronic Engineering in Dublin (her home town), and still has a deep interest in technology. Keen to understand business better, she applied to Harvard Business School, they let her in and lent her money to attend (somewhat to her surprise) and after getting an MBA from there she joined management consultants McKinsey & Co in 1983, in order to pay back her Harvard loans. But she found that she liked the work and in due course she became the first female Partner in their London office and stayed there for 18 years. Since leaving McKinsey in 2001 she has been a Director of several UK companies including HMV, Bupa and Royal Mail. She is currently Chair of digital consultancy Founders Intelligence; Senior Independent Director at Saga; and Chair of the Remuneration Committee at Burberry. Alongside her business career she is a passionate environmentalist and was Chair of the Soil Association (which campaigns for organic food and farming) for 6 years. She is now Deputy Chair of the National Trust. In recent years she has also helped run a football shop in Ilford (long story) and a boat trip business in a West of Ireland village. She is an ardent feminist, becoming more so as time goes by.