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Analysis of the role of Boards in shaping net zero transition pathways

Writer's picture: Sylvain Richer de ForgesSylvain Richer de Forges

Why Boards Must Prioritize Their Company’s Net Zero Transition Pathway Now




As the world edges closer to the climate tipping point, the role of corporate boards has never been more crucial. For companies to remain competitive, attract investment, and mitigate risks, a well-defined Net Zero transition pathway is non-negotiable. Yet, many boards are falling short, and the consequences could be severe.



The Risk of Inaction:


$4.2 trillion in global assets are at risk by 2100 due to climate change impacts if warming exceeds 1.5°C .



Investors are increasingly holding companies accountable. The Task Force on Climate-related Financial Disclosures (TCFD) is now mandatory in major markets like the UK, and companies that fail to disclose or address transition risks may face higher capital costs and loss of market share .



Investor Expectations Are Shifting:


BlackRock, the world’s largest asset manager, has made it clear: “Companies that are not effectively transitioning to Net Zero could see their access to capital constrained” .



The Net Zero Asset Managers initiative now represents $59 trillion in AUM, meaning that companies lagging in their transition strategies risk losing access to trillions in investment .



Board Accountability Is Key:


According to a CDP report, only 1 in 5 global companies have robust climate transition plans. Boards must integrate climate risks into decision-making or risk litigation, reputational damage, and even regulatory penalties .



The message is clear: Net Zero isn’t just a sustainability issue—it’s a business imperative. Boards must ensure their companies have a credible pathway, or they risk losing more than just their competitive edge.

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