The navigator applies global principles and frameworks for corporate governance to provide structured steps for boards and board directors to accelerate corporate action on climate and nature.
Introduction
Climate change, nature loss and the role of the board
Climate change and nature loss present material, systemic and financial risks to corporations, shareholders, and their communities. However, they can also provide business opportunities which, if managed well, can be turned into a competitive advantage. With increasing requirements from regulators and growing expectations from investors and other stakeholders for companies to address climate-and nature-related risks and opportunities, it is crucial for corporate boards to establish and oversee clear corporate governance practices for that purpose.
Key takeaways
Oversight of climate and nature-related risks and opportunities are central to a board director’s responsibility to ensure the long-term sustainability of the company.
A structured approach to corporate governance will accelerate board-level engagement and action on climate and nature.
Guidance on the Navigator
The Corporate Governance Navigator for Climate and Nature suggests country-level practical steps and questions to ask in the boardroom on climate and nature-related risks and opportunities based on the corporate governance codes in that jurisdiction. The navigator applies global principles and frameworks for corporate governance including the World Economic Forum’s Principles on Effective Climate Governance and the IFC’s Climate Governance Approach to provide structured steps for boards and board directors to accelerate corporate action on climate and nature.
The Country Briefs provide an overview of corporate governance codes in different jurisdictions, highlighting the principles and provisions that require or support board-level action on climate and nature. The purpose of the country briefs is to inform and guide board directors on corporate governance requirements related to climate and nature, best practice, and the associated implications for their duties as directors.
The Navigator for Climate and Nature is a collaborative initiative between CGI and IFC, created to provide Climate Governance Knowledge Products.
The Navigator is a tool designed to help directors utilize their jurisdiction's Corporate Governance Codes to ask pertinent questions in the boardroom, steering their companies towards low-carbon, resilient, and inclusive growth that drives innovation and job creation. IFC is happy to collaborate with our partner Climate Governance Initiative on development of a tool that will help upskill directors and improve private sector sustainability practices.
Merima Zupcevic, Principal Corporate Governance Officer, IFC.
We spoke with a variety of climate governance experts to explore how Boards in different jurisdictions are engaging with their local Corporate Governance Code. Listen to their insights here:
These principles support policy makers to evaluate and improve the legal, regulatory and institutional framework for corporate governance. They also provide guidance for stock exchanges, investors, corporations and others that have a role in developing good corporate governance.
The International Finance Corporation (IFC), member of the World Bank Group, has developed the IFC Climate Governance Approach. The IFC Climate Governance tip sheet: Equipping Corporate Boards to Mitigate Climate Risks and Seize Climate Opportunities presents the business case for climate governance and offers guidance and practices to assist to Boards of Directors in identifying and overseeing climate-related risks and opportunities. The tip sheet provides advice on incorporating climate considerations into strategy and identifying, monitoring and responding to climate-related issues.
The IFC Climate Governance Progression Matrix enables boards to test and assess their maturity on climate governance. The tool helps board directors to identify and oversee climate-related risks and opportunities. It provides practical and progressive climate-related actions for each of the six parameters of the IFC Corporate Governance Approach: Commitment, Board Structure and Function, Control Environment, Disclosure and Transparency, Minority Shareholder Treatment and Governance of Stakeholder Engagement.
The World Economic Forum’sPrinciples for Effective Climate Governance (2019) support board directors to holistically address climate opportunities and risks, and align global climate goals with the organisation’s purpose, values and long-term prosperity. They provide an overview of global climate policy, science and economics, an overview of trends in regulation and disclosure, and their implications for corporate boards. The Forum provides 8 guiding principles for effective climate governance on corporate boards.
Climate Governance Initiative (CGI) has developed the Directors' Duties Navigator - Climate Risk and Sustainability Disclosure (2024) that helps directors make informed decisions and understand their legal duties regarding how to manage that risk and understand the broader climate-related regulatory landscape in which they operate. The Navigator provides information on over 30 jurisdictions on: government and regulatory approaches to climate change, sustainability and climate-related disclosure requirements, liability risks for companies and directors and practical tips for directors.
Climate Governance Initiative
with IFC, member of the World Bank Group, as a collaborating partner