Non-Executive Directors play critical role in putting climate transition at the heart of corporate strategy - CGI

AS the global UN COP26 climate talks commence in Glasgow, the international Climate Governance Initiative (CGI) has called on board directors across the world to place the climate transition at the heart of corporate strategy and board decision-making. In a statement released today, the CGI points to warnings from Mark Carney and others that the climate crisis poses the ‘single greatest threat to global financial stability’ and urges board directors to rapidly skill up in order to confront the climate emergency.

Climate change poses major short, medium and long-term risks, requiring boards to put climate considerations at the heart of their strategy, risk management and disclosure processes. As a result, businesses are under unprecedented pressure from their investors, regulators, financiers, and customers to demonstrate their climate resilience against a backdrop of a warming world, to demonstrate their ability to transition as aligned to commitments made in Paris in December 2015.

The climate change agenda and green technology are priorities for Malaysia under the current government, and this commitment is reflected in the 12th Malaysia Plan's third theme of advancing sustainability.

At COP26, Malaysia is expected to express its stance which will convey its intent to reduce the greenhouse gas (GHG) emission intensity by 45 per cent across the economy (based on the Gross Domestic Product) in 2030. Also, as recently committed by the Prime Minister, the country aspired to achieve net-zero GHG emissions as early as 2050.

With the intense momentum built across continents for potentially ambitious policy commitments by governments and global and local civil society organizations at COP26; now is a critical time for boards to engage with the impacts of climate change, guide long-term plans and translate these into immediate, practical action. This includes ensuring a business strategy that is resilient in a low-carbon future, led by their board of directors, whose commitment and leadership are essential for the success of a company's transition to a net-zero economy.

The global network of directors’ forums - Climate Governance Initiative - collectively comprises over 100,000 individuals. These individuals can influence trillions of dollars of capital and the emissions of the thousands of companies through the boards on which they serve. Climate Governance Malaysia - the Malaysian chapter of the World Economic Forum’s Climate Governance Initiative – is a network of non-executive directors who aim to help steer our companies through an effective climate transition strategy, that addresses financial stability, increased resilience and sustainability.

Quotes from Climate Governance Malaysia Founding Members

“Climate emergency requires an ‘all of government and whole of society’ approach. In just over two years, Climate Governance Malaysia has been completely focussed on enhancing the discourse between key stakeholders to increase climate ambition. At COP26, governments will commit to targets that will need to be fulfilled by businesses and as long-term stewards, we directors are committed to facilitating a smooth transition, for the collective good. We help businesses understand and address the climate crisis in order to minimise business risk.”

- Datin Seri Sunita Rajakumar, Founder Chairman, Climate Governance Malaysia; Independent Non-Executive Director of Bursa-listed Dutch Lady Milk Industries (Chairman) and Berjaya Corp Berhad; MCIS Insurance and Zurich General Insurance.

“The urgency for action is now. Inaction will cost us our planet! We don’t have to run fast alone, let us run far together! At Climate Governance Malaysia we believe Malaysia can and must do its share to contribute to the global initiative to address the climate crisis.”

- Dr Kalanithi Nesaretnam, co-founder Climate Governance Malaysia, Independent Non-Executive Director IOI Corporation Berhad

"We are living through climate change now. Whether directors believe that human and corporate activity have any bearing on this, one thing is sure - that climate change has an impact on human and corporate life. Are we ready? Have we asked ourselves how we will meet the physical, transition and legal ramifications?"

- Dr Tunku Alina Alias, Independent Director, Nestlé (Malaysia) Bhd, Malaysian Pacific Industries Berhad, IJM Corporation Berhad & Batu Kawan Berhad

“Given the scale of global environmental challenges faced by the world today, keeping the engine of industry and economic activity moving smoothly, requires urgent business transformation. The looming threat of climate change puts all businesses at risk. To address this, the corporate world needs to work in partnership with NGOs and government bodies to develop nature-positive economic models that address the climate crisis and restore the balance in nature and society.”

- Datuk Seri Johan Raslan, Independent Director on the boards of Sime Darby Property Berhad, Institute of Corporate Directors Malaysia and the Audit Oversight Board

Climate Governance Initiative (CGI)