TCFD Maturity Assessment: Example 2 (Procurement)
In aligning to the TCFD recommendations on Governance, organisations will (amongst many things) are directed to implement the “World Economic Forum’s 8 principles on How to Set Up Effective Climate Governance on Corporate Boards”. From these 8 principles, Principle 2 – recommends that “The board should ensure that its composition is sufficiently diverse in knowledge, skills, experience and background to effectively debate and take decisions informed by an awareness and understanding of climate-related threats and opportunities.”
How should organisations aim to meet such this principle? In collaboration with PWC, the WEF recommend that principle 2 can be addressed through 7 key measures which can be summarised as follows.
Climate impact awareness.
Testing the capabilities of the board composition.
Capability to monitor & assess competencies.
Designated individuals to influence board decisions.
Education on climate related risks/opportunities.
Procurement of advice from external experts.
Succession planning
These 7 points are essentially styled as a series of probing questions which could help organisations understand their current status in aligning to Principle 2. In fact, many organisations will today be assessing their status by measuring up against the 7 points above. Inevitably asset owners & asset managers will be mindful of tick-box exercises, and the above 7 points isn’t really a cumbersome investigation due to it’s broad and shallow context.
Our TCFD Alignment maturity assessment is designed to help you as an organisation describe your current alignment with precision and appeal to the demands of asset owners and asset managers. In our assessment, you will see that each of those 7 points will be scaled into 6 further individual areas of maturity where we would work with you to identify a precise status of TCFD alignment in your sustainable development initiatives. Accordingly, to address the above 7 points we would assess your TCFD alignment against a total of 42 validation statements, putting your organisation in a very strong position in front of asset owners. I wouldn’t simply interview your board and tick off a common opinion on points 1-7 above because the whole process cannot work like this without risking the organisations reputation and see itself on some “greenwash rankings”. Note that in our entire analysis of your alignment to the Governance element of the TCFD recommendations, we analyse over 300 statements in total.
As an example, let us consider the procurement (point 6) and draw this out into our TCFD Aligned Maturity Assessment. The picture below will give you an example of how we use a structured approach to understand the procurement process (in the context of WEF Governance recommendation)
You can read the full argument for a TCFD alignment maturity assessment here where you will also understand the fragility and risks of following the TCFD recommendations at face value only.
We will soon be training consultants and organisations on becoming qualified in this assessment tool, so please do follow us on linkedin @sustainablefactors for an announcement when the training courses go live in 2022. Otherwise just reach out to me informally here if you would like to get your organisation assessed. By all means, feed back to me on which statements above are true for your organisation.