Reflections from ChangeNOW, Paris 2025: Navigating the 'messy middle' and more

Even with recent headwinds, it’s clear that the old economy is inevitably falling away and a new economy will continue to emerge. As Boards navigate the needs of multiple stakeholders at this time of transition, ‘climate governance’ is ‘good governance’. Company strategy naturally sits with the board and, for centuries, the boardroom has been the place for finding balance between stakeholder groups including, and beyond, meeting the short-term interests of shareholders. And whatever your views on the laws of physics, the science behind the transition remains unchanged. To stabilise the climate at any temperature, we still need to reach net zero emissions.

In our workshops, we discussed three key inflection points that have taken place over the last decade as frameworks have evolved to help business and finance better align with the goals of the Paris Agreement.

The first, in 2015, being the emergence of climate change as a financial risk and opportunity (as disclosed through TCFD), the second being the momentum behind net zero transition plans (NZTP), and the third being the recent introduction of transition planning, for example, through frameworks such as the UK’s Transition Plan Taskforce (TPT). This ‘transition in thinking’ has given rise to three inter-related elements for boards to consider when planning for the climate, and broader, sustainability transition:

• integrating near-term financial risks and opportunities;
• minimising climate impact through reducing carbon emissions;
• using levers to contribute to an orderly transition towards a net zero and resilient economy.

As we transition towards a sustainable economy, transition planning tools and guidance can help boards navigate the ‘messy middle’, moving from a responsive to a strategic approach; one which considers how each of the three elements above help to protect and enhance value, both now and for the long-term.

While frameworks, toolkits, and guidance are all welcome, many of the conversations in Paris centred on sharing practical tips for taking transition planning, and climate risks and opportunities more broadly, into the boardroom. Speaking the language of value creation and using real-world case studies, such as the Compass Group, can make a real difference, as well as applying scenario analysis to adjust time horizons to the longer-term.

Top tips also included bringing independent and trusted voices to the boardroom, finding quick wins, building allies and making the most of informal conversations at the margins of formal meetings (including highlighting what the competition is up to…).

Sharing views on how to help fellow board directors consider long-term consequences of the board’s decisions, and the role of different board committees in doing this, was incredibly helpful.

For me, specific takeaways included the importance of:

• raising awareness of the strategic context, for example, as it relates to climate science and the energy transition, to provide the foundation for the board to have an informed conversation around ambition, action, and accountability.
• moving the conversation beyond risk and compliance and a narrow focus on net zero targets to strategic growth and value creation.

It was also clear from our conversations that the business alone cannot drive the transition. As net zero moves from commitments to delivery, progressive public policy will be needed to support companies who are committed to taking a strategic approach. Transition planning is not just for the companies; it’s for governments and regulators to put into practice too.

At the same time, boards do still have a role to play on policy. At the very least, directors need to understand the changing policy landscape and implications for their companies. Board members might also consider ways to challenge their executive teams on company approaches to climate policy engagement. And, more broadly, NEDs have an opportunity to use their networks and influence to help provide an enabling environment for long-term value creation.

In our fireside chat, Karina and I had the opportunity of closing on a positive note, sharing successes over the last decade and discussing the need to combine substance (i.e. carbon intensity metrics) with narrative and story.   A transition to ‘net zero’ is more than reaching ‘net zero’ emissions – it’s a future that promises an abundance of energy, freedom from pollution, and greater resilience too. With technologies such as solar, wind, and batteries rapidly declining in price, and renewables accounting for over 90% of new power capacity annually, who wouldn’t prefer to live in a safe, secure and prosperous future, in balance with nature?

Finally, the sense of community and commitment in the room reminded me of a similar gathering I helped to organise six years earlier – the first annual conference of the Central Bank and Supervisors Network for Greening the Financial System (NGFS).  I remember the energy in the room, a sense of pride in bringing the event together and the tremendous momentum that ensued, a rapid quadrupling of the NGFS membership in a matter of months.

It's clear we are entering a particularly messy part of the messy middle – a leadership moment.  Through shared insight and active stewardship, NEDs can help their boards stay ahead of the curve.

Kudos, Karina and team, for making it all happen.  Same again next year?