Making the Green Transition Work for People and the Economy 2025

Establish governance Establish governance: establish leadership and management structures to support positive socioeconomic outcomes through corporate transitions Once corporate ambition has been established, it is important for businesses to set up the necessary governance structures to ensure ambition translates to action. By defining roles, responsibilities and decision-making processes around socioeconomic targets, businesses can practically embed socioeconomic considerations in operations and begin to move towards measurable outcomes. Governance structures are also critical for ensuring alignment between boards, executives, management, enhancing accountability, and further strengthening shareholder and investor confidence. Furthermore, it is important that socioeconomic targets are supported by governance structures that ensure adequate alignment with wider business objectives, supporting their pursual as primary outcomes, in alignment with the goals of shareholders, investors, boards, or in the case of partial or full state ownership, the state. Cross-departmental alignment on objectives, processes and capabilities is critical for efficient implementation, preventing siloing, and harnessing synergies between organizational functions and stakeholders. Questions to ask may include: Which existing governance frameworks and leadership roles are most relevant to newly established socioeconomic ambitions? –Understanding which existing structures are most relevant to new targets can help efficiently embed these new dimensions into your corporate governance framework. Existing roles may be able to adapt to additional responsibilities, or new roles and structures may be required to accommodate new targets. Do leaders have the competencies to identify the social and economic consequences of climate plan implementation? –It is important to identify where new skills and capabilities may be required to effectively deliver on socioeconomic targets. Existing leadership competencies may not yet cover these, with upskilling potentially required. What are the necessary RACI roles and responsibilities to ensure organizational accountability for socioeconomic outcomes? –Understanding who within your organization will be responsible for, accountable for, consulted on and informed of socioeconomic outcomes and progress is critical to ensure efficient and effective process governance. Does your organization have sufficient mechanisms for internal coordination, to orchestrate cross-functional efforts towards positive socioeconomic and climate outcomes? –It is important to ensure adequate communication channels exist within governance, leadership and team structures to promote efficient coordination towards socioeconomic objectives. How can measurable targets for socioeconomic ambitions be set? –Ensuring progress towards targets can be measured is crucial to moving from ambition to impact throughout corporate strategy, including with respect to socioeconomic outcomes. Key performance indicators (KPIs) need to be developed to help track progress. It may be necessary to involve multiple teams and levels of decision-maker in this process to ensure KPIs are specific, measurable, attainable, relevant and time-bound. How can progress towards socioeconomic ambitions be tracked and reported? –Target setting should be accompanied with sufficient process guidance to ensure teams are equipped to keep leadership informed on progress towards outcomes, using predetermined measures. Making the Green Transition Work for People and the Economy 44