Director Spotlight - Sue Mackenzie

 

Sue MacKenzie, P.Eng., ICD.D
Director, Precision Drilling Corporation, MEG Energy Corporation, Teine Energy Limited, Shock Trauma Air Rescue Service (STARS)

QUESTION ONE:

In 2023, boardrooms experienced a surge in activity concerning climate change due to the introduction of new regulations and disclosure requirements. As we gear up for the upcoming year, let's explore the pivotal climate change trends expected to shape the boardroom landscape. What do you foresee as the primary concerns boards will need to address regarding climate change and sustainability in 2024?

While it’s been on the board radar for several years now, increased sustainability reporting and disclosure regulation will continue to be front and center in 2024.  In 2023 the ISSB’s issuance of two sustainability standards (IFRS S1 and S2), the establishment of the CSSB in Canada, the continued development of the SEC’s Climate Disclosure Regime in the U.S. and the EU’s adoption of its 12 European sustainability Reporting Standards all point to the need for boards to be proactive in considering their oversight of both current reporting practices and preparedness for future mandatory climate-related disclosure.

This oversight of preparedness could include oversight of management’s disclosure gap assessments, disclosure risk integration within enterprise risk management frameworks, data quality and reliability assurance processes, assessment of implications of multi-jurisdictional reporting differences, legal liability assessment, resourcing, to name a few.  Confirming where board responsibility for this oversight will lie might be necessary.

On a different but related note, given the staggering amount of information coming at boards and management teams on climate change risks, opportunities, measurement and reporting expectations, overseeing continued focus on the material and important in the face of these evolving expectations remains paramount.

QUESTION TWO:

In the past year, headlines have spotlighted a backlash surrounding ESG issues across diverse sectors. To what extent do these discussions reverberate within boardroom conversations, and do you consider this backlash a pivotal factor influencing boardrooms' strategies in their climate transition planning?

Boards should be aware of, attentive to and open-minded about the evolution of external ESG narratives.  They can provide insights into opportunities to better describe how the  organization’s ESG strategy connects to and drives business value – the “why” of it.  Boards are well served in overseeing focus on that connection, on disclosure language used to describe it, on progress measured, made, and reported and on how shareholder outreach is conducted to surface and understand investor ESG expectations and pressures.

It’s important to keep in mind that while the external narrative(s) may be evolving, the internal business rationale for focusing on material ESG risks and opportunities remains.  How the story is told matters.

QUESTION THREE:

As stakeholders apply mounting pressure on boardrooms to advance their net zero strategies and plans, what guidance or recommendations would you provide to boards seeking to bolster their efforts in addressing climate change and sustainability?

In addition to the thoughts above, I’d recommend that boards assess the current state of and look for opportunities to grow their own climate knowledge:  engaging external expertise, attending courses, internal education sessions, independent learning, etc. 

Further, take time to ensure continued board alignment on the organization’s approach to climate change stewardship: what it means, what’s important and why, how results will be assessed, and progress communicated.  Hold management to account in supporting the board’s oversight requirements and expectations.

Clearly there’s rapid change in the governance of climate change arena.  It’s important to ensure that the board is staying current on evolving and emergent climate-related issues and their business implications and that the board agenda allows adequate discussion and soak time on same.  Because equally clearly, we’re all still learning as we go…