Investor Scrutiny; Climate Change; The Board

Companies are being tasked to build a pathway to Net Zero. The Board needs to provide oversight. In 2021 there was a dramatic increase in Board engagement with climate change. Fidelio saw this clearly through both our Board Search and Evaluation assignments. In 2022 the dial is moving and Boards are coming under scrutiny for their understanding of climate change and their oversight of decarbonisation. Major investors including Aviva and Blackrock are writing to Chairs and CEOs of quoted companies setting out clear expectations with regard to climate change. This extends cross-sector. The Search industry has also committed to discuss climate change with Chairs and to consider climate change competence for all Board appointments. Fidelio is a signatory to this recent declaration by Chapter Zero and leading search firms to increase climate competence on UK Boards. In a recent Board webinar Fidelio explored increased scrutiny of Boards from shareholders and stakeholders and enhanced expectations of climate change competence. We reviewed what has changed for Boards post COP 26, and what is driving investor attention. Key themes included:

• Climate Change Competence

• The Role of the Chair

• UK – 3 Steps to Tackle Climate Change

• Top 5 Outcomes from COP 26

• Implications for Boards

• Reporting Standards: Still a Work in Progress

• Pension Funds and Savers Want ESG Investments

• Spectrum of ESG Active Investment

• ESG Activists – What’s the Difference?

• Implications for the Chair

We asked Board Members who joined the webinar ‘Does your Board have a good grasp of climate change risk?’

• 54% confirmed that their Board is well-informed, alert to the risks and able to prepare

• 46% believed their Board underestimates the disruption and business model risk that climate change presents​

This split mirrors the transition set out above. Many Boards have established ambition with regard to Net Zero. The next phase is going beyond ambition to action and investors are stepping up scrutiny.

For further details of Fidelio's webinar, please click here.