How directors feel about climate – a roundtable

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– Directors at a roundtable clearly saw climate as a risk they should be watching.
– The directors viewed climate more than a risk – they recognized it also had customer relations & human capital management implications.

Willis Towers Watson’s “Board members across U.S. discuss ESG risk and return” provides insights into how boards are thinking about climate issues based on a recent roundtable discussion.
They asked participating board members three questions:

1. How concerned are the boards of U.S. companies about climate issues and which climate issues are topping the list?
2. Are climate issues seen primarily as risk-related or are there other drivers?
3. How and where is climate risk addressed by the board?

The key takeaways included:

– Board members of U.S. companies are authentically concerned about climate issues and risk. However, the specific risks and their relative importance varies considerably by company and industry. Climate risk is viewed in the context of the many other risks that boards consider and address on a regular basis. Cyber risk, for example, has become a serious topic for virtually every board and has increased in importance as well as the amount of time and attention spent addressing it. Yet, climate risk is a newer topic for many boards.

– Boards clearly see risk as part of the overall value equation for their organizations. They see both monitoring risk and driving performance as key to creating value for all stakeholders, including regulators, shareholders, employees and consumers.

– However, climate issues are not just seen as a risk. Addressing these issues is also seen as a potential benefit in terms of attracting and retaining employees, customers and investors (and, therefore, capital).

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