ESG
Unlike traditional environmental management, net zero governance needs to be dynamic and forwardlooking. It must keep pace with evolving science, regulation and stakeholder expectations, while balancing transition risks and opportunities. This pushes climate from the CSR report into mainstream corporate governance.
Why boards are in the spotlight Investors, regulators and standard setters are increasingly explicit that boards must take formal responsibility for climate-related risks and opportunities. Frameworks such as the ISSB standards and continued uptake of TCFD-style reporting expect organisations to describe how climate is embedded in governance structures, including board oversight of transition plans. This is driving a shift from voluntary stewardship to formalised climate accountability at the highest level.
Effective net zero governance typically includes:
• Board-approved net zero targets aligned with science-based pathways and interim milestones.
• Defined climate oversight, either through the full board or a dedicated committee, with a clear mandate and skills.
• Regular, decision-useful reporting to the board on transition progress, risks and capital allocation.
156 June 2026
CREDIT: ROBERT WAY VIA GETTY IMAGES