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Climate risks are being discussed in Britain’s boardrooms, but the majority of businesses have yet to implement a clear plan, according to new research from KPMG. The firm questioned more than 160 business leaders, representing a range of industries from across the UK on their environmental, social, and governance (ESG) credentials.

When asked if climate change was a top priority, 82 percent said it was already being actively discussed, or on the boardroom agenda. However, when asked if they had a clear view of the risks ahead and how to tackle them, only 8 percent of businesses reported having a fully-fledged plan in place, with 89 percent in early stage discussions, and 3 percent not at all.

Despite the postponement of COP26 in Glasgow, the COVID-19 pandemic appears to have accelerated consideration of climate change and social responsibility putting pressure on companies and politicians to ‘build back better’ and focus on a green recovery.

The survey follows similar research globally by KPMG which reveals that ESG is becoming an increasingly crucial focus area for business leaders. The latest KPMG Global CEO Survey found 65 percent of CEOs are looking to businesses to fill the void in societal challenges and 76 percent agree that, as leaders, they are personally responsible for change on societal issues.

Five years ago, the then Governor of the Bank of England, Mark Carney, established the Task Force on Climate-Related Financial Disclosure (TCFD). Its aim was to ensure investors could identify how resilient an organization was to the potential effects of climate change, and – through stress testing and impact studying - drive real change at Board level in UK companies. To date the TCFD has been seen by many organizations as a regulatory disclosure exercise. But, as companies have started to quantify the risk and opportunities related to climate change, it has become clear it is a strategic risk issue that needs to be addressed at the Board level, with 76 percent of business leaders surveyed by KPMG viewing the measures as a ‘strategic risk issue’, with less than a quarter (24 percent) regarding climate-related financial disclosure as a useful compliance tool or helpful disclosure.

Simon Weaver, Co-Head of Climate Risk and Decarbonisation Strategy at KPMG UK, commented:

“Understanding the impacts on your business from climate change is no longer an ‘added extra’. It’s a core issue which we all, as corporate leaders, must respond to – not just from a wider purpose perspective, but crucially for the resilience of our own organizations. The Coronavirus pandemic was, to some extent, a dress-rehearsal for climate change. It’s exposed the strengths and weaknesses of businesses throughout the UK, and should be the impetus for boardroom discussions on behavioural bias to ignore big, complex problems, the importance of real-life scenario planning, and the value of proper risk planning over simply being reactive.

“This isn’t a subject or theme that can be relegated to a specialist team. We must all, collectively and collaboratively, tackle climate change head on. Clearly, the challenges are different for every sector and every business, but action is needed now. Our survey revealed a lot. It’s clear a lot of businesses are starting to take climate change seriously. But, deliverables and strategies are still part of the future for many. It’s important for the success of the economy and the sustainability of the country that we shift now from narrative to delivery.”  

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