Climate action is a director’s responsibility

The majority of board directors (90%) believe it is their responsibility to influence the organisation’s climate direction. Confidence in their ability is also high, with 93% agreeing the board can effect change. Additionally, 84% of directors report being somewhat or highly engaged with climate matters. Areas most integrated into board action include strategy and business models, policy compliance, oversight, and reporting. However, engagement remains limited in financial planning and incentive structures.

Directors driving progress

Directors cited specific successes in embedding climate into strategy, including aligning targets with business objectives and integrating climate considerations into core operations. Reporting improvements include declaring net zero targets and aligning with SFDR and TCFD frameworks. Financial incentives are also being adopted, such as including climate targets in bonus schemes and aligning remuneration policies with climate strategies. These actions demonstrate a shift from peripheral to embedded climate focus in governance.

Seizing opportunity despite challenging headwinds

Despite operational pressures, 86% of directors see climate as an opportunity for innovation and competitive advantage. Additionally, 81% believe climate is encouraging new collaboration models, and 77% say it will transform their business model over time. However, climate action is often deprioritised due to competing issues like financial health and regulatory demands. Directors stressed the importance of shifting the narrative from climate as a risk to a strategic opportunity.

Overcoming barriers requires a mindset change

Only one-third of boards currently consider climate a high priority, though this is expected to improve as climate-related reporting is anticipated to increase from 40% to 72% in the next year. The most cited barriers include lack of prioritisation (Americas 44%, Europe 50%, Asia Pacific 39%) and insufficient sustainability knowledge (41%, 40%, and 37% respectively). Directors feel they have more influence over strategic areas but less over financial planning and value chain engagement. A mindset shift is needed to better integrate climate into board-level strategy.

How the climate governance initiative supports board directors

The Climate Governance Initiative (CGI) plays a significant role in supporting directors. Among those highly engaged with local Chapters, 57% said this had directly influenced their boardroom actions. Support includes knowledge building, director networking, and tools for long-term planning. In the UK, 62% of directors were inspired to act, with 85% highly engaged with Chapter Zero. In Asia Pacific, 73% reported increased confidence from Chapter tools. Directors noted benefits such as ESG committee formation, preparation of integrated reports, and better internal discussions.

Translating understanding into action

While momentum is growing, 57% of boards have no plans to publish a transition plan in the next year, and 26% have no plans to disclose climate-related information. The CGI provides resources such as the Climate in the Boardroom course and toolkits on disclosure, carbon markets, and supply chain risks to assist directors at all stages of their sustainability journey. Directors are encouraged to engage with local Chapters, share knowledge, and involve colleagues to build broader climate competence across boardrooms.