The temperature rises in the boardroom

Discuss the impact you have – or at least agree with management how they are going to go about assessing it and what’s possible. Many organisations can now measure how much carbon they emit, water they use and pollutants they release in the course of producing their products or delivering their services. If your executive team can’t tell you this, they’re behind the curve – and in a poor position to take action. Make sure you’re getting the data, that it gives a clear picture and that climate risk impacts are incorporated into your regular risk reporting.

Agree on what standards you’re seeking to meet. As a Board, you should be asking what the relevant environmental regulations are, seeking assurance that you’re meeting the requirements and checking that breaches are being reported at Board level. But regulation is only part of the story…

Listen to your people. They are a readily accessible source for finding out what others might be thinking. And keeping talented employees, especially younger ones, increasingly means proving to them that you’re a responsible employer, doing the right thing for the environment. In the war for talent, environmental credentials are becoming a serious weapon.

Work out a well-debated position on why you care. And on what you’re going to do as a caring organisation. In other words, make sure your strategy is underpinned by sound reasoning that is believed by the Board and believable to internal and external stakeholders.

Create the space to weigh up the reputational risks of your activity and output. “We’re meeting market demand” is no longer enough. It may well have been an acceptable narrative to state that you were merely meeting the needs of responsible adults – while making them aware of the dangers. But this approach is becoming increasingly unjustifiable from a brand and reputation perspective.

Maintain a clear picture of how stakeholder attitudes and interests are changing, particularly the institutional investor view. For them it’s no longer a clear-cut question of sacrificing returns in order to invest responsibly. Added to that, they are starting to see an increasing regulatory push around managing the climate-related risks in any investment portfolio.

Examine the organisation’s values and mission and how a general will to be environmentally responsible is permeating down into real strategic priorities and actions.

Articulate your story well, explaining what you’re doing and why. Writing the story is management’s job, but it’s up to the Board to check that it’s believable, understandable and in line with what has been agreed as part of the purpose. And the NEDs need to do a sense check to make sure it’s easy for clients, investors and employees to understand what’s being done to be responsible and sustainable.

Make sure you are working to clear goals and targets. This is easier said than done since there are many standards and measures out there. Different agencies and investors, pressure groups and NGOs are assessing sustainability in different ways. So it’s important to challenge executives on what they are measuring and why – and assess if it’s a credible picture. Be prepared to show progress and to compare yourself to others. This means deciding which organisations you want to compare yourself to and figuring out how you stack up now.

Take the time to understand the limitations and what you can’t realistically achieve. Balancing stakeholder concerns means exactly that and any organisation has competing demands. Adapting can have unintended consequences or introduce unacceptable stresses for suppliers, the workforce and for customers. So, consideration needs to be given to how quickly and “responsibly” you can expect to adapt without various groups suffering serious consequences.