Revenue will be hit in the short term, but there’s no other choice, attendees agree
Corporate leaders have been pressed to act on the challenge of climate change at the most recent MinterEllisonRuddWatts Corporate Governance Symposium.
“The system is broken, the earth is not well, and we have to do something now,” said Professor Will Steffen.
Steffen, who is emeritus professor at the Fenner School of Environment & Science at the Australian National University College of Science, headed the panel debate and presented the latest research on climate change during the event. The panel also included Dame Therese Walsh, Justine Smyth, Rob Campbell, and Cathy Quinn ONZM.
The discussion at the event painted a dire picture for our planet if action is not taken. “Amid record-shattering weather extremes, dying reefs, biome destruction, melting ice, droughts and sea level rises attributed primarily to humans burning fossil fuels, he warned of nature’s dangerous decline as the Earth enters the sixth greatest extinction event in its history, but the first driven by one species: us,” MinterEllisonRuddWatts wrote.
Professor Steffen said that a “hothouse Earth” will be harsh on large animals like humans. “This is why we talk of a climate emergency. We have run out of time – the time for talk is over, the time for action is here,” he said.
MinterEllisonRuddWatts said that there was unanimous acknowledgement at the event that everyone must take greater action now. Participants acknowledged that profits will be impacted in the short term, but there is no other option considering the urgency of facing the monumental problem. Several questions for leaders were also brought up at the event.
“The question for governors is when and how do we move the focus to a longer timeline? Do we have the right mix of skills around the board table? Are we thinking about the non-financial risks to our businesses and are we giving them enough attention? What are the really tough choices needed to respond to climate change that impact on profit? Are we prepared to make them, even discuss them?” the firm said.
Participants also asked how many directors truly meet the bar of having “demonstrable fluency in how climate change will affect their business.”
The challenge posed to all boards is to become multi-dimensional in thinking and considering the planning in board-level moves. Boards must also be conscious of their skills, competencies, and education to do the best job, the firm said.
Boards were also encouraged to be more precise and prompt in doing more to tackle the challenge. Leaders must plan for adaptation and need to think that sustainability is the lifeblood of their organisations. Everyone has a role to play, the attendees agreed.
Businesses must also effectively communicate to investors why the business is changing to balance profits with the future in mind. Participants also agreed that doing nothing is the riskiest strategy, MinterEllisonRuddWatts said.
