The environment: FTSE 350 Boardroom Bellwether survey

The FTSE 350 Boardroom Bellwether is a yearly survey by the Financial Times and The Chartered Governance Institute UK & Ireland that seeks to gauge the sentiment inside British boardrooms. It canvasses the views of FTSE 100 and FTSE 250 company secretaries to find out how boards are responding to the challenges of the economy, market conditions and the wider business and governance environment.

Questions cover a range of business concerns, topical issues and specific governance matters to provide unique insight into what British boards are thinking. Some questions change from survey to survey, but the core remains the same to reveal trends and shifts in opinion.

The report summarises the key findings of the latest survey, which took place in April and May 2022.

While we had a solid response rate from the FTSE 100, fewer FTSE 250 responded than usual and where referred to these should be regarded as indicative.

Climate change is now a mainstream board issue

Climate change might have been knocked off the top of boards’ risk list by geopolitical concerns but, despite that, it is very much a board-level issue – now more than ever.

All respondents (100%) say they have discussed issues relating to climate change in the past year, with only 3% having done so just once, 37% two or three times, 39% four to six times and 21% six times or more, meaning some boards are probably discussing climate change at every meeting. As recently as the summer 2019 survey, no one said they discussed climate change six times or more in the past year, with the largest proportion (34%) discussing it only once. With climate-related financial disclosures for the largest companies now mandatory this shift should be expected, but it also represents a change in corporate culture where the environment and climate are increasingly expected to be taken into consideration in board-level decision-making.

Only 8% of respondents say they have not published plans to tackle climate change, a considerable decrease since summer 2021 when 29% had not published. All the rest have published, but with no consistency in terms of the period that the plans cover. Long-term plans (15 years or more) marginally win out (29%), followed by five years or less (26%), 10–15 years (24%) and 5–10 years (13%).

Published ambitions to become net zero are also becoming ubiquitous. Almost 9 in 10 (89%) say they have published such a plan, a 32 percentage-point increase on summer 2021 when only 57% had done so.

Reporting routes lead with TCFD

All respondents (100%) say they use Taskforce on Climate-related Financial Disclosures (TCFD) rules to report on measures to combat climate change, with almost all (97%) putting this at the top of their ranked list of measures used. However, most use multiple measures to report and they were invited to choose from a list of other possible reporting mechanisms: 79% report using sustainability reports, 76% net zero commitments, 71% ESG reporting, 16% impact reporting, 3% nature impact reporting (Taskforce on Nature-related Financial Disclosures) and 3% ‘other’.

‘It is good to see that climate change discussions are moving up the agenda at board meetings. We encourage companies to provide meaningful disclosure of the outcomes of those discussions and how they are affecting the strategic decisions that the company is making.’ Phil Fitz-Gerald, Director, Financial Reporting Lab, Financial Reporting Council

The FTSE 350 Boardroom Bellwether 2022 survey by the Financial Times and The Chartered Governance Institute UK & Ireland is now available. Take a look at the views of FTSE 100 and FTSE 250 company secretaries now.

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