Climate Expertise on Corporate Boards: A Growing Priority for Investors Investors with net-zero targets are increasingly evaluating the climate expertise of directors on corporate boards, yet there is no consensus on how to define such expertise. This lack of uniformity makes it challenging for investors to consistently assess the climate-related skills of directors across their portfolios. To address this issue, MSCI has developed a framework for evaluating director experience related to climate change. Key Findings: Climate Expertise on Boards: According to MSCI’s framework, 35% of companies targeted by Climate Action 100+ had at least one climate expert on their board.
Regionally, firms in EMEA (Europe, the Middle East, and Africa) had the highest percentage (48%) of boards with climate expertise, compared to 36% in the Americas and just 20% in the Asia-Pacific region. Climate expertise in large producing companies: A detailed analysis of 164 companies targeted in the Climate Action 100+ project found that they are known for their high emissions Finally, it was found that only 4% of managers met the criteria for climate expertise Of these, half have management experience related to climate issues , indicating a need for senior managers involved in such activities. Sector change: The energy sector led the way in having meteorologists on board, with 44 percent of companies in the sector meeting the criteria. However, a large part of the consumer sector was delayed, and only 20 percent of companies have climate experts on board. These findings show varying levels of climate expertise in company boards across regions and sectors. They also emphasize the importance of establishing consistent criteria for assessing the effectiveness of climate-related regulators, especially large coal companies.
