Peer-to-peer exchange: Climate Governance

Integrating climate change in the governance of an institution falls within the first voluntary principle of “Mainstreaming Climate in Financial Institutions”: COMMIT to climate strategies.

Principle 1 recognizes that bottom-up, organic approaches to addressing climate change may not alone be sufficient to integrate climate change across strategies, policies, and operations. It recognizes that senior level commitments to address climate change can have a positive influence throughout all layers of management and operations. It emphasizes the importance of building climate change considerations into the strategic direction and vision of a financial institution, as well as through institution-wide actions.

In addition, it is considered as a major step for climate mainstreaming by other frameworks such as in the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and Transition plans frameworks developed by national initiatives such as The Transition Plan Taskforce Disclosure Framework developed by the UK or voluntary initiatives such as GFANZ.

This webinar was an opportunity for FI professionals from strategy and climate/sustainability departments to share their experience and hear from their peers.

Discussions focused on how financial institutions are integrating climate considerations in the governance of their organizations:

• Board oversight of climate-related issues
• Accountability mechanisms on climate change
• Governance structure on climate change
• Skills, competencies, and trainings of Board members on climate-related issues
• Incentives and remuneration on climate change

Agenda of the webinar:

• Introductory remarks (Secretariat) – 5 minutes
• Presentation – 10 minutes
• Roundtable open discussion – 40 minutes

Participants are invited to share their experience on a voluntary basis. If they are at the early stages of the process or facing specific challenges, they are welcome to ask questions to their peers.  

Proposed guidance questions:

• How are you integrating climate considerations in the governance of your organization?
  • Skills, competencies, and trainings of Board members on climate-related issues
  • Board oversight of climate-related issues
  • Accountability mechanisms on climate change
  • Governance structure (organisation, processes, decisions, etc.) on climate change
  • Incentives and remuneration on climate change
  • Institutional culture and ownership of climate objectives

• What has worked best for you?
• What were and are the main challenges or barriers your institution has faced and how did you overcome them?
• What key recommendations would you have for your peers?

Concluding remarks – 5 minutes

Summary of discussions:

• the African Development Bank, Bank of Africa, TSKB and the Islamic Development Bank shared their experiences.
• Institutions highlighted the importance of integrating climate considerations in the governance of their organisation as part of their climate mainstreaming journey.
• The influence of individual Managing Directors or Presidents committed on sustainability and climate issues was key for many organisations.
• Institutions have developed different types of awareness raising and training programs for their boards. They highlighted the need to conduct them on an ongoing basis.
• Integrating climate into governance processes is iterative, always evolving and improving. Institutions suggested starting step-by-step.
• One institution noted that ambition is context specific (geography, political climate).
• A common challenge faced by institutions is the ability to collect sufficient data, particularly in carbon intensive industries where disclosure is not common practice.
• Clear advancement in area of climate governance, from CSR and small actions in the early 2000s to integrated processes and internal development of tools to reflect climate considerations.