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Chair of the future: The role of the Chair in the climate transition

How can leaders best tackle climate change? In this latest research, we have synthesised the perspectives and insights we gathered from interviewing 24 Australian Chairs of listed companies or equivalent, and included recommendations on what Chairs should consider in future.

During our interviews we found that most Chairs recognise their stewardship obligation to cast their minds to the long-term – beyond three to five years – and this has evolved into a recognition of the ‘systems level’ transformation needed to achieve a successful whole-of-economy transition. As you would expect, the Chairs of Australia’s high emitters were well placed to give organisations in other sectors a window into what lies ahead; and we should actively seek to learn from them. One thing is clear, making incremental changes simply isn’t enough to achieve the targets we have set for 2030 and 2050.

It was a great honour to spend time with these leaders, who referenced 29 companies across 13 sectors and four industries, so we could gather and synthesise their rich perspectives so the entire Chair and Board community can benefit.

“As a Chair of a Board, we are in a privileged position. We do not have the choice to slow play. We must use our role for something that’s greater than us. We have the responsibility of not giving up on the people who don't have that opportunity… The Chair of the future will not be somebody who looks like the Chair of today; because that organisation will certainly fail.”

Ming Long AM | Chair of Diversity Council Australia and Non-Executive Director

"Boards have a cultural responsibility to address issues such as sustainability. But it has to be something that your team does because they believe in it, and they see it adding value to the future. 

None of these things work if you don’t embed them into the real fabric and culture of the management team.”

                                                    - John Mullen | Chair of Telstra and Brambles

We heard several key recurring responses to this question, with most Chairs having a clear view about their roles and responsibilities as these relate to the climate transition.

Above all, we heard that the majority of Chairs felt that their role is to constantly think over the entire climate horizon – this year, the next few and all the way to their organisation’s respective net zero ambitions. As part of providing this essential ‘helicopter’ vision, most Chairs also saw their roles as actively anticipating changes and helping the rest of the Board get ready to respond to and manage those changes. Being on the front foot, rather than on the back, while remaining focused on a long-term corporate strategy that endures through good times and bad.

Read the full report for more insights.

“I think if it's not embedded in the company's strategy, then it's probably going to be an initiative that will potentially lose momentum because people change. Boards change, management changes. But if it's really embedded in the strategy and there's a bottom-up plan, then it's much more likely to endure.” 

                                                                 - Rebecca McGrath | Chair of OZ Minerals

When reflecting on what must be true to guide and drive an organisation along its climate transition journey, every Chair we interviewed agreed that having a sustainability mindset and overseeing the leadership team to deliver on its delivery, is critical to long-lasting success. [And by strategy Chairs didn’t mean just corporate strategy, but strategy as it relates to climate and the transition to net zero.] Many Chairs agreed that incorporating climate strategy into overall business strategy is key, and some felt that their organisations were well on their way to doing this, with others recognising at some level that the two were becoming more entwined.

Read the full report for more insights.

“There’s not a single solution here. It’s going to require every little lever that we can pull and every company, no matter how small, is going to play a role in this. Your customers and communities are starting to look at this now. So, if you don't respond to this, I think your business has a real serious risk of failing.” 

                                                                                   - Keith Spence | Chair of Santos

When reflecting on internal and external barriers we heard a variety of responses across the interviews we conducted. Some related to an entire industry, others to concerns about backlash from stakeholders and the increasing trend towards greenhushing.

All Chairs agreed that the best way to overcome external challenges – no matter how large or small – was through constant, open and transparent communication. Reporting first and foremost on climate transition targets, and clearly explaining what the organisation is and or will be doing to deliver on those targets, is the key to building trust while moving along the climate transition journey. Mandatory climate reporting  was therefore recognised as important for consistency and comparability.

 Read the full report for more insights.

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