WTW crafts new tool to bridge ‘significant’ climate skills gap

Global broker  WTW has launched a new tool, called Climate Vista, aimed at assisting company boards and senior management in better understanding their exposure to ESG and climate-related risks, as well as opportunities.

The company said given the mounting pressure from shareholders, investors, and regulators for climate risk disclosure and transition plans, Climate Vista will help bridge the climate skills gap in the boardroom.

The new tool can be tailored to a company’s specific geography and sector, it is designed to promote alignment between board members, and between the board and senior leadership teams.

A recent survey conducted by WTW and the Nasdaq Center for Board Excellence showed that roughly half of respondents (48%) acknowledged a lack of necessary skills and expertise within their boards to oversee climate risks effectively. "While it is expected this will improve over the next three years, gaps will likely persist," WTW said.

Furthermore, momentum continues to build around emerging reporting frameworks, such as the International Sustainability Standards Board’s IFRS S2 Climate-related Disclosures (which builds on, and will supersede, TCFD) and the Transition Plan Taskforce’s Disclosure Framework. "Each have governance as a key pillar. A core principle of good governance is that boards have the requisite skills and understanding of climate change and climate risk to effectively review, challenge and sign off on strategies for managing these risks," the company noted.

In the survey, WTW said, only three in five respondents (62%) stated that their board has dedicated sufficient time and resources to climate risk governance. Without effective governance in place, organisations are potentially more exposed to a wider range of risks, including physical risks to operations, infrastructure or a company’s supply chain, liability risks from inadequate or misleading disclosures, and the transition risks triggered by a shift to a lower-carbon world.

Will Bugler, climate change learning and engagement lead, Climate and Resilience Hub, WTW, said: “With a blizzard of regulation and policy coming down the line, the clock is ticking for companies to respond to climate risk. Business leaders have made some progress when it comes to climate and governance risks, but there remains a significant climate skills deficit in the boardroom. Climate Vista is a powerful tool that can help boards understand how climate change presents material financial risks to their business.

Hannah Summers, director, executive compensation and board advisory (ESG & Climate specialist), WTW, said: “Pressure from governments, investors, and civil society will soon impact everything from a company’s credit rating, valuation and cost of capital to its ability to borrow and get insurance. Putting climate governance front and centre on the boardroom table is a critical first step to ensuring business leaders are aware of their responsibilities and equipped to successfully steward their organisations through the transition to net zero, strategically managing the risks and opportunities in a rapidly decarbonising world.”

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