This article first appeared in Forum, The Edge Malaysia Weekly on May 18, 2026 - May 24, 2026

In November 2015, I received an unexpected telephone call from a group of institutional investors who were on their way to Paris for COP21, the 2015 UN climate change conference: they were planning to use their powers to participate in board director nominations and asked me to help by providing a list of candidates with climate-competency skills that were similar, they said, to my own.

“Alas,” came my answer, “I possess no such list: in fact, despite a career dedicated to sustainable business and finance, I too struggle with these challenges and would not describe myself as possessing the full range of skills needed to properly steward a board’s climate transition strategy” — one that would, in fact, align with the about-to-be-minted Paris Agreement.

But while that list of directors never materialised, these investors planted a seed that would grow to become the global network of national and regional director bodies known today as Chapter Zero Alliance (formerly the Climate Governance Initiative).

Ten years on, with invaluable support from the World Economic Forum, which launched the alliance’s initial set of Principles for Effective Climate Governance in 2019. The alliance comprises 34 locally governed chapters, covering more than 70 countries. This past decade has seen us build a network of peers and experts who share this commitment to placing a Paris-aligned transition strategy at the heart of the board agenda.

In January 2026, the alliance launched the updated Principles for Climate and Nature Governance, which provide a handy framework for board directors to incorporate not just climate but also nature drivers into their companies’ corporate strategies and board decision-making processes. This has clearly landed at a complicated time, when the climate emergency is being sidelined by acute geopolitical crises and, in many cases, even dismissed as irrelevant. But despite these headwinds, one common thread unites us across all geographies and sectors: the regulatory landscape may have become more confusing, the politics messier and the geopolitics a source of existential threat, but what about the laws of science?

These have not changed and will not wait for mankind to sort its squabbles. This means that “business as usual” remains as untenable as it was before war, inflation and the artificial intelligence (AI) revolution took centre stage while technology, often turbocharged by strong policy support, has delivered and will continue to deliver real disruptive change and a whole new set of business opportunities. As board directors, it is our core duty to reconcile the urgent business priorities that our management teams focus on day-to-day with the equally crucial task of positioning our companies for resilience and often reinvention. Like sharks, we cannot afford to tread water — it is a case of keep swimming or die!

For those of us who champion this topic in our boardrooms, there is no denying that the backlash we are facing makes keeping climate and nature on the agenda more of a challenge. But in the privacy of boardrooms and whispered in conversations, if not necessarily shouted from rooftops, business leaders are acutely aware that environmental, social and governance (ESG) issues are as important as ever.

Taking action on climate and nature saves money, reduces volatility and has the potential to generate new profit opportunities as well as being the right thing to do for the planet: the green economy is worth over US$5 trillion (RM19.66 trillion) per year and is growing almost as fast as the technology sector.

Take the financial sector as an example: over the last two decades, its approach to climate and nature has progressed in line with the science. Twenty-five years ago, credit risk assessments looked at environmental risk factors narrowly in terms of contamination and impairments to loan collateral value, relegating climate risk to the too-complicated bucket; today, by contrast, boards and CEOs alike, usually prodded by supervisory authorities, recognise that climate and nature are material risk factors, most notably in insurance, with spillover effects on loan and investment portfolios.

With extreme weather events ever more frequent and disruptive, and the insurance protection gap ever widening, financial actors increasingly realise that asset values risk being written down unless resilience planning is built into routine decision-making. When a board can set clear climate transition goals for the business, effectively review and scrutinise net zero targets and road maps, and provide constructive feedback, it sets a virtuous chain of events in place.

Good governance means targets and transition plans are realistic and achievable; CEOs cascade practical action plans through the organisation, and everyone from the boardroom to the factory floor to the mailroom understands the mission, accepts that business transformation may entail short-term costs and is assessed and rewarded with a common long-term goal firmly in mind.

One thing boards must do in this still unfamiliar landscape is to recognise when skills are lacking and external expertise needs to be brought into the boardroom. Board chairs and members are likely to have varying levels of expertise on climate and nature issues, and given that new talent cannot be recruited to plug every skills gap, a little humility and a willingness to bring in outside help goes a long way. Boards must also acknowledge the centrality of climate science, much in the same way that no board would presume to question the laws of gravity or thermodynamics. The best available science tells us that a sustained average temperature increase beyond 1.5°C over pre-industrial levels would place the world in a danger zone where further tipping points pose catastrophic risks. With global temperature having now breached 1.5°C for the first time in 2024 and seven out of nine planetary boundaries having now been exceeded, boards must recognise that the emergency light is blinking bright red. Unless emissions urgently decouple from current rates of economic growth, we are on track to miss the Paris Agreement’s targets.

Board-level action is therefore not optional, nor can boards afford to wait for governments to compel them to act: they must take immediate action that is informed by the science and, if necessary, speak up to demand supportive government policies.

Accelerating action is not only beneficial from a scientific and macroeconomic perspective: in a study by the London Stock Exchange Group, green industries were found to have stronger long-term performance, that is, over a 15-year period, a group of stocks with at least 20% exposure to the green economy outperformed its non-green benchmark by 59%.

Of course, one study can be accused of cherry-picking, but would we demand that ceasing to employ children in coal mines, instituting modern workplace safety standards in high-risk sectors or ending slavery can only be justified if profits materially increase over a sustained period relative to a control group across multiple randomised trials? Or would we not wait around to find out? If the best available models provide such a convincing case for the need for urgent action, delay is not only reckless but fundamentally incompatible with our fiduciary obligation as board directors.

A particularly thorny challenge for boards is how to guide fossil fuel producers and other high-carbon businesses through the climate emergency. While a minority of oil and gas companies are investing in renewables and looking to wind down fossil fuel production over time — I had the privilege of serving on one such board for nine years — this cannot yet be said to be the norm across the industry. This is where long-term modelling and scenario-based stress testing are especially vital and can provide data and evidence to support either an ambitious, though potentially risky, business model transformation or a managed decline of the business. It is undoubtedly difficult for a board chair or CEO to confront such questions but these are precisely the kinds of existential challenges we must be prepared to tackle today, not just for the sake of effective governance or the long-term viability of our companies but for the future of our planet.

A final parting thought: if this were easy, everyone would be doing it. It’s not. It is never linear at the best of times and the volatile geopolitical environment at the moment is making things even more fraught and unpredictable. So boards have no choice but to stand firm in their commitment to climate action and, to the extent they may not, as a collegial body be so inclined, individual directors must summon the courage to question, challenge and persuade. Driving effective climate and nature strategies can feel a bit lonely at times but directors can take comfort in our growing community of Chapter Zero Alliance members and supporters who share the same conviction and vision. We must draw inspiration from exchanges with our fellow directors and wisdom from the science and facts that are brought to our attention through the extensive resources the Alliance provides. Both tell us unambiguously that climate action is urgent, necessary and a driver of business success.

Karina Litvack is a non-executive director of Terna SpA and ambassador and founding chairman of the Chapter Zero Alliance (formerly the Climate Governance Initiative). This column is part of a series coordinated by Climate Governance Malaysia, the national chapter of the World Economic Forum’s Chapter Zero Alliance. The alliance is an effort to support boards of directors in discharging their duty of care as long-term stewards of the companies they oversee, specifically to ensure that climate risks and opportunities are adequately addressed.

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