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Climate change governance and the board chair of the future

Accelerating the transition toward a low-carbon future

Balancing high performance demands and accelerating climate change initiatives.

The roles a board chair must play are expanding and the demands on their boards are high and intense, with no signs of slowing down. In a sea of competing priorities, how can chairs and boards help build momentum to meet the sustainability challenge head-on?

Our research reveals that chairs will need to: maintain a laser-like focus on sustainability while considering the long term in both their thinking and investments; manage a wide range of sometimes conflicting expectations; keep abreast of the fast-moving regulatory environment; and help ensure their boards have the appropriate knowledge base and skills to address the climate challenge—to name just a few.

Below, we’ve included some key considerations and questions board members can focus on to advance these discussions in the boardroom and make meaningful progress. If you’d like to take a deeper dive, you can read the full report on our Global website at Role of the board in climate change governance | Deloitte Insights (English only).

Methodology

Deloitte Global Boardroom Program's Chair of the future report synthesizes insights from more than 230 board chairs across 17 geographies, collected from 2022 to 2024 through interviews, roundtable discussions, and surveys. It includes perspectives from both listed and private entities, including a number of large family businesses.

Six questions to assess board readiness for climate governance

1. How can we most effectively integrate the climate agenda into business strategy?

2. How do we balance the investments necessary for climate transformation with pressures for short-term results?

3. How can we manage divergent interests and expectations while meeting regulatory developments?

4. How can committees work best to support the board’s broader climate agenda?

5. Are we doing enough to boost our climate literacy?

6. In my role as chair, how can I advocate for meaningful change?

Addressing the climate challenge requires long-term investment, measurement, and accountability

Chairs’ ideas on bringing climate strategy and business strategy together

Champion the climate agenda.

Including climate strategy within corporate strategy discussions helps to maintain focus and exercise effective management oversight.

Segment long-term climate commitments

into shorter, individual, multi-year programs connected to the business model. Then progress can be monitored by deriving key performance indicators (KPIs).

Integrate climate action into each risk management activity.

Risk management considers both risks and opportunities and this applies to climate actions.

Link KPIs and road maps to executive compensation.

This can enable boards to develop ambitious and achievable targets and hold executives accountable with transparency.

Providing stewardship amid multiple expectations

The leading practices chairs deploy to effectively lead across diverse groups

Ensure communication is a productive, two-way dialogue

by leveraging the appropriate forums, tools, and required disclosures to gather and share information.

Leverage employees’ advocacy to help drive the climate agenda.

Communicating goals and achievements with employees can help in brand-building and attracting and retaining talent.

Learn about and focus on the specific challenges investors are paying attention to.

Chairs say they ask investors about their long-term vision and their involvement in climate challenges.

Engage all interest holders to help build relationships critical to achieving long-term success.

Engaging with all groups requires understanding their perspectives and how to prioritize, not just balance, their different interests.

Committee work enables boards to delve deeper and better support the climate agenda

Chairs see the benefits that a separate sustainability committee brings

Guide and advise the board on complex technical matters

related to climate.

Enable diverse experts

to facilitate more profound discussions.

Deepen engagement internally

and with the management team.

Dedicate sufficient time

to climate and sustainability and manage the board’s workload.

Taking steps to bolster boards’ climate acumen

Four key ways chairs are addressing the learning curve

Provide ongoing educational and upskilling opportunities

by inviting both internal and external experts to board meetings, hold special learning sessions, and encourage participation in self-learning opportunities.

Appoint a sustainability expert to the board

to stimulate discussions and move the climate agenda forward. (Note that some chairs prefer not to do this, out of concern that the expert could skew the discussion.)

Invite an expert to lead board and committee sessions.

The chief sustainability officer, for example, can facilitate deeper discussions within the committees responsible for climate and sustainability oversight.

Broaden board diversity

to help expand collective knowledge and perspectives on various topics, including climate change.

Advocating for change: Advice for the chair of the future

Collective wisdom from current chairs on how to tackle the climate challenge

Cultivate a network of peers

to share experiences and ideas and find allies among a range of groups, such as industry associations, to explore how to advance together.

Evolve with your ecosystem and communicate

about actions and ambitions.

Align your purpose, strategy, and executive appointments.

Embrace an innovation mindset.

Champion the climate agenda

and keep the company on track on its sustainability journey with confidence.

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