SINGAPORE, August 14, 2023 — WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company, today announced the launch of Climate Vista. With shareholder, investor and regulatory pressure increasing, alongside the growing demand for climate risk and transition plan disclosure, Climate Vista is a new engagement tool designed to help company boards and senior management better understand their exposure to ESG and climate-related risks and opportunities.
According to a recent survey conducted by WTW and the Nasdaq Center for Board Excellence, almost half of the respondents (48%) reported that their boards lack the skills and expertise needed to provide effective oversight of the climate risks facing their companies. While it is expected this will improve over the next three years, gaps will likely persist.
Christopher Au, Director, Climate and Resilience Hub, Asia Pacific at WTW, said: “Regulations and best practices across Asia Pacific are increasingly requiring Boards to demonstrate climate skills. Our insurance partners are also setting expectations for those seeking insurance protection, with board training being a desirable characteristic in assessing the overall risk profile. The survey we have conducted with Nasdaq Center for Board Excellence demonstrates there remains a deficit between expectations and skills. Improved climate governance is a defining trend to support responsible stewardship of a company.”
Momentum also continues to build around emerging reporting frameworks, such as the International Sustainability Standards Board’s IFRS S2 Climate-related Disclosures (which builds on, and will supersede, TCFD) and the Transition Plan Taskforce’s Disclosure Framework. Each have governance as a key pillar. A core principle of good governance is that boards have the requisite skills and understanding of climate change and climate risk to effectively review, challenge and sign off on strategies for managing these risks.
However, only three in five respondents (62%) stated that their board has dedicated sufficient time and resources to climate risk governance. Without effective governance in place, organisations are potentially more exposed to a wider range of risks, including physical risks to operations, infrastructure or a company’s supply chain, liability risks from inadequate or misleading disclosures, and the transition risks triggered by a shift to a lower-carbon world.
Shai Ganu, Managing Director and Global Leader for Executive Compensation and Board Advisory, WTW, added: “Pressure from governments, investors and civil society will soon impact everything from a company’s credit rating, valuation and cost of capital to its ability to borrow and get insurance. Putting climate governance front and centre on the boardroom table is a critical first step to ensuring business leaders are aware of their responsibilities and equipped to successfully steward their organisations through the transition to net zero, strategically managing the risks and opportunities in a rapidly decarbonising world.”
Three quarters of participating board members in the survey also recognised the value of a strong ESG strategy and acknowledged opportunities to improve oversight of climate and governance risks.
Climate Vista is a powerful tool, which can be tailored to a company’s specific geography and sector, helps promote alignment between board members and between the board and senior leadership teams.
Through tailored sessions, led by WTW climate experts and Board advisers, Climate Vista will uncover the current level of understanding amongst the board, the perceptions of the key barriers to action, and the level of ambition the board expects the company to have on climate action. Climate Vista is then used to address areas of weakness and ground the board in the fundamentals of climate risk, building momentum to respond strategically to climate risk and deepening engagement at all levels of a company’s business.
The survey by the Nasdaq Center for Board Excellence and WTW was conducted between 15 February and 7 April 2023 to provide insights into modern boardroom dynamics to help boards find new ways of assessing and improving effectiveness. A total of 349 board members from 44 countries across six continents participated in the Fostering Corporate Governance and Enhancing Board Effectiveness Survey.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organisations sharpen their strategy, enhance organisational resilience, motivate their workforce and maximise performance.
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