GLOBAL NETWORK OF DIRECTOR INSTITUTES 2024-2025 RESEARCH REPORT
Climate change is no longer a distant environmental issue — it is a current boardroom issue. Its implications are profound, intersecting with risk oversight, corporate strategy, stakeholder expectations, and long-term value creation. For directors, understanding and addressing climate change is now a fundamental component of responsible governance.
From supply chain disruptions and extreme weather events to shifting consumer preferences and evolving regulation, climate change introduces a spectrum of risks that can directly impact business continuity and competitiveness. Equally, the global transition to a low-emissions economy presents significant opportunities, from innovation and market differentiation to enhanced investor confidence.
Directors have a duty to ensure their organisations are not only managing current risks but also preparing for future scenarios. This means embedding climate considerations into strategy, financial planning, and organisational culture, as well as ensuring the board itself has the knowledge, structure, and processes in place to provide effective oversight.
Boards that fail to engage meaningfully with climate change risk falling behind, while those that do are better positioned to lead their organisations through complexity and towards long-term resilience and sustainable growth.
Directors’ fiduciary duties, particularly the duties of care and diligence, require them to act in the best interests of the company, including with respect to material financial risks. As outlined in the Directors’ Duties and Climate Change briefing published by the Climate Governance Initiative (2024), there is an increasing legal and regulatory expectation that boards take proactive steps to identify, assess, and respond to climate-related risks and opportunities. Failure to do so may not only undermine long-term business performance but could expose directors to liability for breach of duty where climate impacts are foreseeable and material to the business.
In parallel, the United Nations Environment Programme Finance Initiative stresses that fulfilling fiduciary responsibilities in the context of climate change often requires collective and cross-sectoral approaches. As stated in their 2023 article, “Fulfilling individual fiduciary responsibilities requires a collaborative response to climate risk,” climate change is a systemic risk that cannot be effectively managed in isolation. Directors are encouraged to collaborate with peers, regulators, and other market actors to share insights, align expectations, and contribute to sector-wide resilience.
Alongside risks of climate litigation and ‘greenwashing’ claims, reporting requirements and trading partner expectations reinforce that climate-related governance is no longer optional or aspirational, but is central to a board’s legal and strategic obligations. Directors must ensure their organisations are capable of responding to a rapidly changing risk landscape, operating environment, and future that is being shaped by climate change.
