A study published by global consultancy group KPMG found that most businesses are still without a clear climate change plan, despite an increase in ESG pressures from investors and other stakeholders.
While climate change is a priority for business leaders, only 8% have a plan in place to tackle the risks ahead, the report found.
Despite the coronavirus pandemic accelerating the ESG agenda, most business are still lost when it comes to implementing a clear plan on climate change, it found.
Yet, when asked specifically if climate change was a top priority, 82% of business leaders said it is already being actively discussed in the boardroom.
When asked if they had a clear view about tackling the risks ahead, 89% said they were in “early stage discussions” while 3% said they had not even got that far.
“Talk now on any post-pandemic recovery almost always includes climate change at its heart,” said Sue Bonney, a member of KPMG ESG team.
“But our survey suggests that, while many businesses are taking ESG seriously, there is a long way to go before we can truly say that everyone is placing it at the centre of their future strategic growth plans.”
The news may come as a surprise to industry experts who have been increasingly convinced that more aggressive stewardship practices by asset managers have been forcing companies to do more.
Only last year, a Harvard Business Review report suggested that “corporate leaders will soon be held accountable by shareholders for ESG performance” but the KPMG study seems to contradict this somewhat.
“If we are to truly achieve the goal of transforming to a sustainable, net-zero economy, we need far greater collaboration and more immediate action at boardroom level,” Bonney said.
The Task Force on Climate-Related Financial Disclosure (TCFD) was established by the then Governor of the Bank of England Mark Carney five years ago with the aim of ensuring investors could identify how resilient an organisation was to the potential effects of climate change.
While the TCFD has been seen by many organisations as a regulatory disclosure exercise, it has become clear that climate change is a strategic risk issue that needs to be addressed at board level, fund managers claim.