Sustainable Business and Finance: Climate governance hots up
When I started at the Institute of Directors (IoD) in 2017, one of my first crisis meetings was about whether the director community was ready for a climate change edition of Boardroom magazine.
At the meeting we also grappled with whether we should put a dinosaur on the cover — a tongue-in-cheek nod to both entrenched climate denialism and the possibility of extinction.
The consensus view was a resounding “maybe”. But we pushed ahead on both fronts. I got a few handwritten letters about that issue of the magazine and some late-night emails — both positive and negative.
Today, it seems crazy that just six years ago we were discussing whether or not climate change was a governance issue.
If you want an idea of how the climate conversation is progressing in boardrooms, the growth of the IoD’s Chapter Zero New Zealand governance initiative suggests we have evolved significantly.
Chapter Zero is a Climate Governance Initiative (CGI) project backed by the World Economic Forum (WEF). There are 26 chapters across 50 countries, and more will join.
I approached the forum about hosting a chapter here, which we launched in March last year. It is focused on providing knowledge to directors, alongside tools and insights from home and abroad, to help them make better climate governance discussions for their organisations and communities. This initiative is of huge importance to New Zealand’s prospects of meeting our climate targets and building a climate-resilient economy.
Growth in supporters was slow at first but we have seen an acceleration this year. We had around 850 supporters in March 2023, one year from launch. That shot up to around 1200 in July and had risen to 1476 by late September.
Climate Change Minister James Shaw has appeared at our events. This year, both then Prime Minister Chris Hipkins and National Party leader Christopher Luxon (perhaps with the election in mind) spoke at our events.
Climate governance is increasingly recognised as vital, and understanding the risks and opportunities is becoming a boardroom priority.
Chapter Zero NZ engages with and supports the 10,500-plus strong IoD membership. We also welcome non-member directors and all of our tools, guides, resources, news and webinars are openly available to the public at www.chapterzero.nz
We have an open-door policy. We believe our 1476 supporters have an impact greater than the number might suggest. IoD members sit on a median of three boards, so that reach is often tripled. And all directors on the boards our supporters are on, also likely sit on three boards. So knowledge and ideas can spread fast.
The IoD’s Chapter Zero NZ cannot tell directors that they should move this factory away from this river at this time. We cannot tell directors that this international market will opt to only accept net-zero goods from this date. Our contribution is to point directors to the types of questions they ought to ask, in relation to their organisations, and to help them bring those questions to board discussions in order to make great decisions.
Directors have a fiduciary duty to their organisations — they are required under the Companies Act to consider the success and sustainability of their business model. Chapter Zero will help them understand what that duty might look like in the face of climate uncertainty.
Climate governance is a relatively new addition to the list of director responsibilities and it stimulates all sorts of opinions and debates.
Some feel it is part of a “woke” agenda. I’ve been told I am running a “woke kindergarten” at the IoD, which I think is better than running a sleepy rest home.
In an area of divergent views and strong emotions, Chapter Zero NZ is a safe space in which we can hold serious discussions about climate governance.
Throwing stones is not going to fix the climate crisis. Someone has to bring businesses, scientists, climate activists, the Government and the public together on this. Someone has to create a platform for change.
Bringing climate to the fore in governance is incredibly important if Aotearoa New Zealand is to meet its net-zero aspirations. We are headed into a once-in-a-generation change to the way our world is structured. This is going to require global, organisational and human change. And that’s going to require all of us - and especially corporate leadership from the top.
Chapter Zero NZ aims to be transformative for the governance community, so they can be transformative — for New Zealand.
