Climate Governance Initiative

Boardroom Climate Crisis: Leaders Accountable for Planetary Survival

20 February 2024

Insights Chapter Content

The World Economic Forum has developed a set of eight principles to guide the development of effective climate governance. To make these principles useful and tangible, each of them is accompanied by a set of guiding questions. These questions help organisations to identify and address potential gaps in their existing climate governance strategies. As Chapter Zero Slovenia is committed to ensuring that its board members pursue climate governance, we have produced a series of monthly articles explaining the eight climate governance principles, which are designed to increase their climate awareness, embed climate considerations into board structures and processes and improve navigation of the risks and opportunities that climate change poses to business. --- »Accountability: The climate emergency demands results. Clear and consistent disclosure of plans, progress, risks and opportunities builds trust among stakeholders, directs capital, and informs strategy. It shows resilience and readiness for the net zero world.« We Mean Business Coallition emphasizes the pivotal role of accountability in addressing the climate emergency effectively. Through clear and consistent disclosure of plans, progress, risks, and opportunities, companies build trust among stakeholders, direct capital efficiently, and inform strategic decision-making. This commitment to transparency not only demonstrates resilience but also prepares businesses for the transition to a net-zero world. The Four A's of Climate Leadership, as presented by the We Mean Business Coalition, encapsulate the essential pillars of corporate accountability: Ambition, Action, Advocacy, and Accountability. Leading businesses respond to the climate crisis with ambitious goals and follow through with concrete actions. They also engage in advocacy efforts to drive wider systemic change. However, it is accountability that serves as the link, ensuring progress is measured, reported, and acted upon. Distinguishing between responsibility and accountability is crucial in understanding corporate conduct. Responsibility relates to the performance of tasks and duties, while accountability centers on being answerable for those tasks and their outcomes before others or authorities. Both concepts are indispensable for effective organizational management. Moreover, the scope of responsibility extends beyond individual actions to encompass corporate obligations. Companies are increasingly expected to embrace corporate social responsibility (CSR), integrating environmental, social, and ethical considerations into their operations. This involves not only legal compliance but also voluntary efforts to uphold ethical standards and contribute positively to society. Environmental responsibility entails initiatives such as reducing carbon footprint and promoting sustainable resource use. Social responsibility encompasses activities that support local communities, enhance employee well-being, and champion diversity and equality. Economic responsibility underscores the importance of sustainable financial practices and delivering high-quality products or services. Failure to uphold responsibility and accountability in sustainable business practices can have severe consequences. Irresponsible actions contribute to environmental degradation, worsen climate change, cause economic losses, and social injustices. Moreover, companies risk their reputation and losing stakeholder trust, negatively affecting their competitiveness and long-term viability. The rise of climate and social litigation underscores the urgency for accountability and stronger regulatory frameworks shows the analysis by London School of Economics. By leveraging legal avenues, individuals and communities are holding corporations and governments accountable for their actions and driving systemic change. The future of work is undergoing a profound transformation. Especially generation Z, in particular, demands purpose-driven businesses that prioritize sustainability and social responsibility. They are influencing the Business Landscape Through Social Responsibility. According to McKinsey studies, Understanding Generation Z can help retailers, marketers, and leaders seeking to build and maintain sustainable businesses that meet the needs of this young generation. To be or not to be accountable? Boards accountability is a very hot topic right now in EU. The Corporate Sustainability Due Diligence Directive (CSDDD), or CS3D, aims to hold EU companies accountable for their environmental and human rights impact. Despite urgent calls for business change, the directive faces resistance among member states, according to Euroactiv. Its recent removal from an EU ambassadors' meeting agenda highlights the uncertainty surrounding its future. In conclusion, accountability is the cornerstone of corporate sustainable responsibility. By embracing accountability, businesses not only mitigate risks but also seize opportunities to create positive environmental and social impacts. As echoed by prominent leaders, accountability is the glue that binds commitment to results, and holistically responsible actions today pave the way for a sustainable future tomorrow. »It is wrong and immoral to seek to escape the consequences of one's acts.« Mahatma Gandhi