This article first appeared in The Edge Malaysia Weekly on September 19, 2022 - September 25, 2022
Karina Litvack, whose calling is to persuade listed company boards that it is their business to take action on climate change, has a tough mission.
As the founder and chairman of the World Economic Forum’s (WEF) Climate Governance Initiative (CGI), she has to deal with directors who block her moves at every step. Often, they are adamant in sticking to the view that putting climate change at the heart of their boards’ decisions would amount to interference in the business of management.
But every now and then, a strenuous objector has a change of heart and becomes a convert to her cause, says Litvack.
That happened at the Italian oil and gas major ENI, where Litvack is a non-executive director. A top climate scientist was brought in to explain to its board members the implications of climate emergency.
“Everybody was so mesmerised by what he was telling us about the basic science and the basic macroeconomics of climate change, how it all works together and how it is going to affect the economy and the ecosystem,” says Litvack.
“The person who was so obstructionist leans over to me. His face was drained of colour, he was riveted and he has got a look of dismay on his face. He whispers to me: ‘Did you know all this?’ I whispered back: ‘This is what I’ve been trying to tell you for years.’ That was the light bulb moment.”
Instead of an hour, the presentation went on for two and a half as the formerly sceptical director bombarded the speaker with questions.
The climatologist said: “Listen, you’re the board directors; I’m just a scientist. I’m just here to tell you what the problem is. You figure out the answer.”
Litvack reports: “He has had a complete change of heart in terms of understanding why this matters and why it’s the top, top, top priority.”
Based in London, Litvack was in Kuala Lumpur recently to address board chairmen on climate governance in a closed-door event coordinated by Climate Governance Malaysia (CGM), the local chapter of CGI. The initiative took off in January 2019 when WEF issued a White Paper outlining guiding principles for setting up effective climate governance on corporate boards.
Later that year, CGM became the second chapter of the initiative to be set up, and the first in Asia-Pacific. There are now 22 chapters in 50 countries and several others are in the making.
In her interview, Litvack dwells on themes that revolve around the emotive issue of climate action.
“We all talk about being rational people but there’s a lot of it that comes from here,” Litvack says, pointing to her heart. “We need both (intellect and emotion). Some people will really come up with every imaginable rational argument to obstruct the pathway to climate governance,” she says.
Given the slow progress on climate action seen globally so far, it is not surprising that the issue evokes strong emotions, especially among the young, who fear that the world is not doing enough to prevent the climate catastrophe from sweeping through our lives.
“The anger of young people like Greta Thunberg is necessary because we have been complacent,” says Litvack.
“There has been tremendous inertia and even those who understand the scale of the problem and have been trying to drive change find that it really is swimming against the current. It’s very, very difficult,” she asserts.
Ironically, the epic scale of the problem also generates a tremendous amount of positive energy among stakeholders.
“My industry (the oil and gas sector) as a purveyor of this, frankly, toxic product, is public enemy no. 1,” Litvack concedes.
But what people often forget is that the very largest, most technologically advanced oil and gas companies have the capacity, if they so choose, to be the architects of transformation, she says.
Her company, ENI, for example, has decided that it is going to reinvent itself. It provides heat, power and lighting, among others, and will continue to do that through other products that are not fossil fuel-based.
In 2020, ENI created an entity called the Energy Evolution, a new business alongside the old upstream business that was going to drive the transition to clean energy.
“A very big part of the board’s role is driving culture. When you have companies that have honed their expertise over decades and being the smartest at finding where to drill a hole and how to do imaging under the sea and under the soil, where they can possibly find oil and gas before anyone else despite many failed tries, you develop a culture of engineering success that is built around one particular activity,” she explains.
“Then you have to tell these people: We’re not going to do that anymore. … It’s a difficult thing to push onto people.”
But the story has a happy ending.
When ENI CEO Claudio Descalzi started a blog to reach employees directly and unveiled the new direction that the company was taking, it provoked an avalanche of responses from young people.
“I can’t tell you how happy it makes me to know that I can now put my skills to the service of solving climate change, because it is the biggest problem we face,” one employee said.
When ENI announced its big mission to invest in clean energy, the company put out a call to the entire business to bring up any ideas people had about possible projects.
The department that was charged with processing the proposals was flooded with ideas that were coming from the field and had to be more than doubled in size.
Nevertheless, there is a long road ahead before the business world is anywhere near an adequate response to the climate crisis.
CGI itself, Litvack readily agrees, could take a fresh look at its goals with a view to raise the bar on climate governance in the boardroom.
“This is an initiative about changing from the inside,” she notes. “Yet at the same time, we have to make the point that it’s not a risk just like any other. It is the risk that will determine our very survival.”
Save by subscribing to us for your print and/or digital copy.