Climate change has emerged as a central and existential risk for organizations—and fertile and critical ground for innovation. Yet new Deloitte research shows that many audit committees, an essential bulwark in helping companies manage and respond to risks and opportunities, haven’t yet sufficiently placed climate change initiatives at the core of their agendas.

Among the more than 350 board audit committee members in 40 countries surveyed in Q4 2021 by the Deloitte Global Boardroom Program, nearly 60% say they don’t regularly discuss climate change during meetings. And nearly half say they lack the basic literacy in climate issues they need to make informed decisions. While results vary by region (see sidebar, “EMEA moving ahead”), more than two-thirds (70%) say they have yet to complete an assessment of how climate change will affect their company’s operations, supply chain, and customers.

Alarmingly, this report finds that “systemic threat barely features on audit committee meeting agendas, and there seems to be little appreciation of the impact climate change will have on the company’s business model and long-term strategy,” says Kerrie Waring, CEO) of the International Corporate Governance Network, which promotes global standards of corporate governance and investor stewardship (figure 1).

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