A survey of over 300 board-level directors conducted by INSEAD Corporate Governance Centre and Heidrick & Struggles has revealed that board members are still struggling to act on climate change related issues despite having some understanding of the scale and challenge facing organisations.

The survey found that three out of four of respondents felt climate change was very or entirely important to the strategic success of their companies however roughly half felt that their companies did not yet have clear targets for reducing emissions. 85% of respondents also said that their board needed to increase its climate change knowledge.

These results are surprising given the increasing commentary and publications around ESG strategies and focus within businesses over the last six months. For those not in the loop, ESG stands for "environmental, social and governance".

A slightly scary statistic arising out of the survey was that 69% of respondents felt that knowledge relating to climate change was not a requirement to join their board, with the same percentage confirming that climate change knowledge isn't a part of their board competency matrix. 

Several years ago, I would probably hear you say, so what? However times are changing and to some extent have changed, and climate change and ESG issues should now be at the forefront of directors' minds. If change starts at the top, it in theory should then trickle down to the rest of the workforce and positive attitudes towards ESG will likely improve relationships with customers and suppliers going forward.

So what can Human Resources professionals do to help? 

  • Focus on addressing the knowledge gap - train existing managers on awareness of ESG issues and include a requirement for new candidates to demonstrate such awareness
  • Introduce ESG related metrics / objectives into the business - at a business and personal level for senior managers and directors
  • Consider combining ESG objectives into senior managers' and directors' performance criteria and incentive structures
  • Develop the business' core ESG / climate change strategy and consider how HR can be a leader in this area.

The above suggestions would enable HR to have a more prominent voice at board level and also help create accountability with the business. 

The survey results conclude that "any board without expertise on the climate emergency is irrelevant in the 21st century". I think this will go one step further in 2022 with any businesses as a whole without expertise on ESG and climate change issues becoming irrelevant and potentially losing customers, suppliers and facing disruption in its workforce as a result. 

HR are very much at the front line for pushing climate and ESG awareness within businesses and should grab this opportunity with both hands.