Global broker unveils climate engagement tool

Global broker unveils climate engagement tool | Insurance Business Asia

Environmental

Global broker unveils climate engagement tool

Tool helps boards understand their exposure to climate and ESG risks

Environmental

By
Steven Byerley

Global broker WTW has announced the launch of Climate Vista, a new engagement tool that aims to assist company boards and senior management in comprehending their exposure to environmental, social, and governance (ESG) and climate-related risks and opportunities, amid increasing shareholder, investor, and regulatory pressure for climate risk disclosure.

“With a blizzard of regulation and policy coming down the line, the clock is ticking for companies to respond to climate risk,” said Will Bugler, climate change learning and engagement lead at WTW’s Climate and Resilience Hub. “Business leaders have made some progress when it comes to climate and governance risks, but there remains a significant climate skills deficit in the boardroom. Climate Vista is a powerful tool that can help boards understand how climate change presents material financial risks to their business.”

A recent survey conducted by WTW and the Nasdaq Center for Board Excellence revealed that nearly half of the respondents (48%) reported their boards lacked the necessary skills and expertise to effectively oversee climate risks. Although improvements are expected in the next three years, the gaps may persist, WTW said.

Amid the emerging reporting frameworks like the International Sustainability Standards Board’s IFRS S2 Climate-related Disclosures and the Transition Plan Taskforce’s Disclosure Framework, governance becomes a key pillar. Boards need to possess the required skills and understanding of climate change and risk to effectively review and challenge strategies for managing these risks. Unfortunately, only 62% of respondents stated their boards had dedicated sufficient time and resources to climate risk governance, leaving organisations exposed to a range of risks, including physical, liability, and transition risks.

“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,” said Hannah Summers, director of executive compensation and board advisory (ESG and climate specialist) at WTW. “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.”

The Climate Vista tool, which can be tailored to a company’s specific geography and sector, aims to promote alignment among board members and between the board and senior leadership teams. Through customised sessions led by WTW climate experts and board advisers, Climate Vista will assess the board’s current level of understanding, identify barriers to action, and determine the level of ambition for climate action.

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