CEO climate skills need refining

Australian executives may have a skills gap when it comes to climate crisis opportunities, a new report says. The report by the Investor Group on Climate Change (IGCC) looked at the skills Australian company directors would need to support the transition to net-zero by 2050.

The report explains that climate change risk is still being seen as a reputation or environmental risk, not a significant business or investment risk. Climate change is often split into a different risk category, rather than integrated into overall company risk.

The assessment of 15 Australian companies found companies identified a need for climate skills on the board, but transition and disruption expertise were not addressed. None of the companies were comprehensively disclosing board member skill sets. That makes it tricky for investors to accurately form a view on how prepared a company is based on disclosures.

Many of the companies assessed had net-zero targets, but it wasn’t clear how prepared the boards were for the transition. Boards that don’t recognise their own role in driving the company’s transition to net zero mean the company is exposed to financial, strategic and market risks, and miss out on opportunities.