Net Zero and the Board
Board directors now, more than ever, must ensure that accountability for Net Zero is driven throughout their organisation. However, the task of achieving Net Zero can be difficult, and there is no one size fits all approach.
The board plays a vital role in deciding on and delivering Net Zero commitments. If you’re only starting to have these conversations, there are four key core areas to consider when bringing Net Zero to the board: risks and opportunities, business strategy, governance structure, and its approach to delivering Net Zero.
Understanding the Risks and Opportunities
CEOs and their board must ensure that they have a basic understanding of climate change and the implications on their business. It’s important to know your business emissions and your current impact on the environment. These emissions are categorised as Scope 1, 2 and 3 emissions. We’ve created some great resources, check out our infographics: Measure, Reduce & Eliminate Scope 1 & 2 Emissions and Scope 3 Emissions Explained.
Align Business Strategy with Net Zero Initiatives
With 65% of directors believing that climate change should influence strategy, now is the time to work out the specifics of incorporating climate change into the company’s strategic goals. The board should consider whether achieving Net Zero is financially viable for the business and what financing and investment costs are needed to achieve it. If you’re unsure whether working toward a Net Zero future is a viable option for your business, there may be some interim steps that make more commercial sense. Our article, ‘Where Does Your Business Sit On the Scale to Net Zero?’ delves into the steps that businesses should take now and in the near future.
Assess the Existing Governance Structure
For a business to execute its environmental commitments, the board needs the right governance structure in place. The board should decide whether environmental risks should be managed by a committee, such as a sustainability team, the entire board, or a combination of the two. Some strategic decisions and operations may be assigned internally, whereas others are more easily delegated to an external source. If you’re not sure who should be in charge of overseeing environmental risks, take a look at some of the resources we already have on sustainability teams. Check out our latest infographics: 5 Reasons to Start a Sustainability Team and How to Develop a Sustainability Team.
Delivering Net Zero
With reporting, a business has the chance to share its narrative. Companies that have made Net Zero commitments should provide transparent and balanced reporting on their journey to Net Zero, including business transformation and KPI progress. The board should monitor development and pay close attention to reporting requirements to ensure they comply with mandatory reporting.
Kick off your board discussions with our Net Zero Board Pack. It provides senior management and directors with resources to help them discuss how to move forward and become a sustainable business.
Author: Sophie Parrington, Marketing Assistant
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