Globally Relevant Policies and Processes
What you need to do
As a board director, you should ensure that climate risks and opportunities are well understood and are being effectively managed in a way that is integrated throughout your organisation's governance structures and operational teams. Whilst appointing specific climate experts (such as a Head of Sustainability or a Sustainability Team) will be useful in driving change, this will not, in itself, deliver the broader climate integration required.
Climate change – the impact on business
Climate change impacts all types of business. Although the direct link may not be immediately evident in your business sector, the effects of climate change have far-reaching implications.
Take the IT industry as an example, the risks of climate change to core business may be less apparent, but they experience it though increased energy consumption and costs impacting operations and profitability; the risks to physical infrastructure, such as data centres, due to extreme weather events and rising sea levels; disrupted supply chains leading to delays and increased costs for essential components; or shifts in customer expectations towards sustainability that can influence buying decisions and brand reputation.
Take a look at the IPCC’s sustained climate change impacts, and consider how these could impact your organisation.
Extract from ‘Adverse impacts from human-caused climate change will continue to intensify’. Source: IPCC, 2023. Synthesis Report of the Sixth Assessment Report, Figure SPM.1, p.7
According to the IPCC, limiting global warming to 1.5°C means that GHG emissions must decrease by 43% by 2030 and 84% by 2050.
Climate change – the impact on business
Climate change impacts all types of business. Although the direct link may not be immediately evident in your business sector, the effects of climate change have far-reaching implications.
Take the IT industry as an example, the risks of climate change to core business may be less apparent, but they experience it though increased energy consumption and costs impacting operations and profitability; the risks to physical infrastructure, such as data centres, due to extreme weather events and rising sea levels; disrupted supply chains leading to delays and increased costs for essential components; or shifts in customer expectations towards sustainability that can influence buying decisions and brand reputation.
Take a look at the IPCC’s sustained climate change impacts, and consider how these could impact your organisation.
Extract from ‘Adverse impacts from human-caused climate change will continue to intensify’. Source: IPCC, 2023. Synthesis Report of the Sixth Assessment Report, Figure SPM.1, p.7
Broader context
In 2020, the global temperature surpassed pre-industrial levels by 1.1C
If global temperatures continue to rise, they could trigger nine 'climate tipping points,' which could cause climate change to spiral sharply and irreversibly beyond our control. At 3.2° C, Miami, Dhaka, Shanghai, Hong Kong and one hundred other cities would be flooded.
The nine ‘climate tipping points’ will be caused by ice sheet melting, ocean circulation changes and living ecosystems shifts.
Carbon brief tipping points - open in a new window
On the other hand, international cooperation and technological advances are fostering positive tipping points that can help us solve the climate crisis:
A positive tipping point happens when a zero-carbon solution advances to a point where it outcompetes the existing high-carbon solution. Once reached, self-reinforcing ’feedback loops’ (such as learning by doing effects, economies of scale, the emergence of complementary technologies, and the spread of new social norms) drive exponential growth in the adoption of the new solution and a rapid decline of the old.
For example, green ammonia, electric vehicles and plant-based proteins are already causing a breakthrough effect.
How to take action
Invite your organisation’s board to reflect on the following questions:
- Are we thoroughly assessing our GHG emissions, climate risks and opportunities, both within our operations and across our whole value chain? If not, what steps must we take to do so?
- How aware is our board of the risks and opportunities presented by climate change and climate action?
- Has our organisation conducted a risk and opportunities analysis, for example, scenario-based analysis, to understand its climate implications across its operations and value chain?
- How is climate risk and action embedded in our board operations and governance structure?
- How climate competent is our board? Is there a good understanding of climate ambition and transition plans?
Mark section as complete
Join a Chapter
Your regional Chapter can support you with tools and resources to enable effective corporate climate governance in your region.
Join a ChapterResources
1 UN Intergovernmental Panel on Climate Change (2023). Synthesis Report of the Sixth Assessment Report (AR6). Online access: IPCC_AR6_SYR_SPM.pdf
Further reading
- More information on initiatives to support your organisation taking climate action: Race to Zero and Race to Resilience
- Resources on ‘Corporate climate policy engagement: A briefing for board directors’
- Find your organisation’s global positioning on climate policy engagement ranked by InfluenceMap