Why brands should care about climate change

Not long ago a sustainable future felt like a shared destination. Climate action was trending, and the business case for purpose-led brands was both ethically and commercially sound. But recently we've seen the narrative wobble – particularly in the United States – with some global brands retreating from their climate goals and environmental, social and governance (ESG) commitments altogether.

Yet in a world of intensifying regulation, physical climate impacts, and shifting stakeholder expectations, the question for boards isn’t whether they can afford to stay the course, it’s whether they can afford not to.

The backlash may be loud, but the evidence is clear: climate action still matters — to your customers, your people, your investors, and your bottom line.

Some companies are now choosing silence over sustainability. Greenhushing (or downplaying or concealing climate initiatives) is on the rise. South Pole’s 2023/2024 Net Zero report found that nearly a quarter of the companies they surveyed with science-based targets were choosing not to publicise them. But for directors, silence is not a shield — it’s a risk.

A competitive advantage is what sets an organisation apart — whether it’s innovation, brand strength, or customer loyalty. But even if your organisation is doing the work on climate, failing to communicate it can erode stakeholder trust, diminish brand value, and lose your licence to operate.

Despite political polarisation consumer demand for sustainable products remains strong. A McKinsey and NielsenIQ study found that products with ESG-related claims delivered 28 per cent cumulative growth over five years, compared to 20 per cent for those without.

And it’s more than preference — it’s behaviour. PwC’s 2024 Voice of the Consumer survey (20,000 people, 31 countries) found that 85 per cent of consumers are experiencing climate change first-hand and are prioritising sustainability in their consumption. Over 80 per cent are willing to pay more for sustainably produced goods; nearly half (46 per cent) are consciously reducing their environmental footprint through buying more sustainable products.

Customers, investors, and employees expect real climate action, and that it be visible and credible. Inconsistency or greenwashing can quickly unravel years of trust.

According to Harvard Business School, companies that embed climate action into their strategy are better positioned to manage both physical and transition risks, while also capturing the upside of emerging regulations, technologies, and markets. Good governance demands that boards take a long-term view, ensure resilience, and act in the best interests of the company and its stakeholders. This includes overseeing climate-related risks, setting credible emissions reduction targets, and holding management accountable for progress.

Climate is no longer a differentiator, it’s a baseline expectation. Eighty  per cent of New Zealand’s exports by value go to markets with existing or proposed mandatory ESG reporting. Falling behind on climate disclosure and governance isn’t just poor practice it’s poor positioning.

As directors your role is to ensure that sustainability is not siloed in a report or marketing team, but integrated into risk, strategy, and performance. That means focusing on material impacts, setting credible targets, embedding climate into governance structures, and fostering a culture of accountability and transparency.

Retreating from climate goals might seem like a path of least resistance in politically sensitive markets. But the long-term consequences are reputational and financial.

The brands and boards that are measuring, reporting, and acting on climate change are future-proofing their businesses. They’re building trust, resilience, and long-term value, not just doing it because it’s the right thing, but because it’s the smart thing.

Yes, the climate conversation is evolving. Yes, it’s getting messier in some places. But now is not the time for directors to be quiet. Now is the time to double down on purpose, sharpen your oversight, measure what matters, and lead with integrity. Boards that do will earn trust, unlock value, and position their organisations to thrive in a climate-constrained world.

Considerations for directors:

• Is climate change regularly discussed as a strategic issue at the board table — beyond compliance?
• Do we understand our stakeholder’s expectations around climate and sustainability?
• Are we positioning ourselves to maintain market access in jurisdictions with mandatory climate reporting?
• Have we clearly defined our organisation’s material climate-related risks and opportunities?
• Have we evaluated the potential reputational, financial, and regulatory risks of greenhushing?
• Are our climate-related claims and communications consistent with our actual performance?