In March 2026, scientists confirmed what many had suspected: the climate is warming faster than models had projected. The acceleration is statistically significant – and there is no sign of slowing down. That warming would outpace projections is not a surprise, as I have argued before. In the current political environment, the 1.5° C target is out of reach and insufficient action has severe consequences.

Back in 2020, Christian Mumenthaler, then-CEO of Swiss Re – today the world’s largest reinsurer – urged businesses to chart a course out of the climate crisis. In his view, the private sector could not afford to wait for government to deliver the solution. The private sector should come up with a concerted action plan, he said. And yet, as we know, those combined efforts have since faced significant headwinds.

So how should companies deal with these conflicting signals? In an article on the Harvard Business Review website published in August 2025, Lynn S. Paine and Suraj Srinivasan make the case for boards of directors to lead the way on climate governance. Their starting point – that the underlying business case for climate action has not gone away – is one I also argued in an earlier editorial. What follows is a summary of their guidance, abbreviated and slightly reorganized.

• First and foremost, a company must develop a rock-solid understanding of its climate exposure, both how the company affects the climate, and especially how the climate affects the company.
• The Board must then define its role. Directors should understand how climate risks connect to core business fundamentals and link to fiduciary duties such as risk management, strategic resilience, and long-term value creation.
• The Board should then build a distributed governance model, which is easier to defend than a centralized, stand-alone ESG committee.
• Climate literacy is a key requirement at a time where conflicting interests are more complex than ever and real tensions exist. Boards should acknowledge the trade-offs and embrace complexity rather than sidestep it.
• Regardless of a company’s aims, clarity and consistency are crucial when defining its climate position.
• Boards should review climate strategies with the same rigor as financial information. They should probe management plans and demand clarity and accountability. A well-reasoned, well-documented decision-making process, the authors argue, is the best defense against politicized criticism.

I previously warned that rolling back sustainability commitments is rarely the safe option it appears to be. Regulatory pressure is fragmenting rather than disappearing. The business, reputational and liability risks remain real. Paine and Srinivasan warn that downplaying or withholding information, retreating from climate governance, or maintaining an inconsistent or opaque position all create unnecessary risk.

At minimum, boards owe it to their shareholders to assess what a warming climate – already heating up faster than models suggested – means for the company’s future earnings and risk exposure. Navigating that tension is, ultimately, a board responsibility.

Boards should be thinking even more broadly than that, however. Ongoing economic growth is the lifeblood of business. A sound non-market climate strategy would require companies to identify ways to do their bit in protecting the societies and the economies in which they operate and want to thrive.
That will be impossible without a coordinated effort.

Olivier Jaeggi, ECOFACT Managing Director