As we move into an era of pricing carbon the savvy Director has to keep their duties top of mind and their liabilities understood whilst steering clear of the political rabbit holes that eat up valuable time and don’t help with either aim.  ‘Clean Energy Future’ is a carbon pricing mechanism based on a cap and trade model with an initial three year fixed price period – not a tax – though the latter is useful for selling headlines and creating a politicised debate.

Whether we agree with it or not or want to dicker about the accuracy of the science behind it does not change the fact that you – the Director – have to protect your corporation from negative impacts, have your finger on the pulse of potential opportunities, and minimise your exposure to known (and unknown) liabilities.  At a practical level you must have your clean energy future integrated with your risk management strategy, and at the heart of it all you must have a Board that is leading the charge, embracing the future, and creating a company culture ‘inspired’ by the future – not grounded in fear.

As all good leaders know, when you tap into the knowledge of your organisation many of the solutions you seek will come from within.   Do you want the people who know most about the inner workings of your organisation feeling afraid, fearful and resentful about the future?  Or, do you want them to feel empowered to explore potential solutions that might just save you money AND reduce your energy consumption?  Thought so – and TWG is in full agreement that this is both desirable and possible no matter what the physical or financial size of your organisation.

Companies ought to be focusing on what they can do to reduce energy consumption, reduce emissions, and improve the bottom line.  This just makes good sense.  The Board leads the charge and an inspired team will respond.  The Board must hold the ‘whole picture’ in its collective head and ensure that the organisational culture, systems and processes are aligned with the corporate ESG (Environment, Social & Governance) strategy.  Alignment helps perpetuate a culture of better and more consistent decision-making and action.

This month’s issue of Company Director (the magazine published by the Australian Institute of Company Directors) contains two very compelling articles about the mounting pressures on companies to report on ESG and to prepare for a low carbon world.  The AICD’s inaugural Director Sentiment Index also concludes that most directors expect an increase in ESG regulation in the next two years, with climate change, workplace health and safety and industrial relations being the biggest pressure points (see “Under Scrutiny”, page 22 of Company Director, Vol. 27, Issue 7, August 2011).

We aren’t going to give you another long checklist of what to do, but a quick temperature check of your organisation should cover:  do you have mechanisms for the shareholders, employees and significant stakeholders to provide recommendations to the highest governance body as part of a best practice governance framework?  Is the Board providing the right kind of thinking to take the company to the next level of innovation?  And lastly, how are you tapping into your organisational knowledge, ferreting out hidden risks, accessing ideas, and building carbon productivity?

TWG can help you get your house in order.   We can engage your board in a series of working lunchtime sessions, round table briefings, or committee workshops (in a number of formats) and at the level of ‘tools’, we can provide strategic frameworks, full integration services, Carbon Management Response Plans (CMRP), Carbon training, stakeholder engagement models, and use our proprietary analytical tool called SHAARP (Stakeholder Audit, Alignment and Risk Perception) to unlock your organisation’s knowledge.