Report

The climate challenge for boards: Perspectives from the financial sector

Climate risk is unlike any other risk boards have managed before—it is multi-dimensional, touching on environmental, regulatory, business, reputational, and even litigation risks. As the climate crisis continues to grow in urgency, the complexity of managing this risk will only increase. Boards are not just responsible for protecting their organizations; they are also tasked with leading the way toward a more sustainable future.

This report examines the key challenges that boards face when tackling climate risk. It explores the lack of standardization in the language used to define climate risk, varying sectoral approaches to measuring physical risk, and limitations in existing data.

More information on the report below.

Download the paper

Key findings from the report

Unique challenges

93% of board members see climate risk as presenting unique governance challenges

Varied approaches

Banking, investment management and insurance sectors approach climate risk governance differently, reflecting their unique direct and indirect exposures to climate risks

Responsibility clarity

Responsibility for climate risk is shared between CROs and board directors, requiring closer collaboration and specialized expertise.

Guidance needed

52% of boards want more direction on the most appropriate risk models for climate matters.

Background to the report

This year Fathom has collaborated with IFI Global to produce a report specifically exploring how boards of directors are addressing the challenges of climate change. IFI Global sourced its findings from self-disclosed annual and ESG reports from 92 major corporations – 30 insurance firms, 30 banks and 32 investment firms – supplemented by first-hand interviews with 42 CEOs, board directors and senior managers on challenges, opportunities and the evolving practices in climate risk.

A growing responsibility: Why boards must prioritize climate risk

This research has been commissioned because we believe that better board oversight of climate risk is critical to both the financial industry’s resilience and the global effort to mitigate the impacts of climate change. By highlighting the current gaps and offering insights into potential solutions, we aim to support boards in enhancing their governance frameworks and adapting to the changing landscape.

Download the report: The climate challenge for boards: Perspectives from the financial sector

Download the report from Fathom and IFI Global to uncover the key challenges that boards face when tackling climate risk. It explores the lack of standardization in the language used to define climate risk, varying sectoral approaches to measuring physical risk, and limitations in existing data.