Governance in the long term: Climate risks, boardrooms, and the value of younger voices

Canada’s climate efforts risk stalling if corporate governance remains a blind spot. Sonia li Trottier argues that climate change is now a material financial risk that boards are obligated to manage, not a peripheral sustainability concern. While many organizations acknowledge climate risk, they often fail to integrate it into core governance functions such as risk oversight, strategy, and capital allocation. Trottier contends that treating climate as a governance issue—grounded in directors’ long-term duties—is essential for durable action. She also highlights the value of younger perspectives in boardrooms, not as a symbolic inclusion, but as a way to better navigate complex, long-horizon risks. In a polarized climate landscape, she concludes, lasting progress will be determined less by rhetoric than by how effectively organizations govern climate risk.

When we talk about climate action, the conversation often gravitates toward technology, innovation, policy, or individual behaviour. These are important. But corporate governance is one of the most powerful, yet underappreciated, levers of climate action. And these decisions happen quietly, consistently, and often far from public view—inside boardrooms. Boards approve major financial decisions, which risks are taken seriously, how long-term value is defined, and whether climate considerations remain aspirational—or become operational.

If we are serious about addressing climate change at scale, we need to focus more on governance.

Climate Risk is a Governance Imperative

Climate change is no longer a distant environmental concern. It is a material financial risk—physical, transition, and legal—that affects balance sheets, supply chains, insurance markets, and long-term enterprise value.

Wildfires, floods, heatwaves, and droughts are already disrupting operations and driving up costs. At the same time, shifts in regulation, technology, and global markets are reshaping competitive landscapes. For financial institutions, climate risk is increasingly recognized as a systemic risk that can threaten financial stability.

Yet many organizations still treat climate solely as a disclosure exercise or a sustainability initiative rather than as a core governance issue.

This is a mistake.

Governance is the mechanism through which organizations identify, assess, and manage risk. It is how boards set strategy, oversee management, and ensure accountability. If climate risks are not embedded into governance structures—board mandates, risk committees, incentive structures, and decision-making processes—they will not be managed effectively, no matter how ambitious the public commitments.

The Boardroom Gap

Across sectors, we see a recurring gap: climate risks are understood in theory but not fully integrated into oversight and strategy.

In Canada, directors’ duties are clear: boards must act in the best interests of the corporation, with a view to its long-term interests. Courts and regulators increasingly recognize that foreseeable risks—especially those with financial implications—fall squarely within that duty. Climate change meets that threshold.

Effective governance does not require boards to become climate scientists. It requires them to ask the right questions, demand credible information, ensure that climate considerations are integrated into existing oversight frameworks such as risk management, capital allocation, and executive compensation, and seek external expertise when needed to make informed decisions.

Expanding Governance Through New Perspectives

One of the most promising—and underutilized—opportunities in climate governance lies in expanding who informs governance decisions.

Youth are often excluded from governance on the basis of limited corporate experience. Yet experience alone does not guarantee good decision-making—particularly in a risk landscape defined by rapid change, scientific complexity, and long time horizons.

According to Deloitte’s 2025 Gen Z and Millennial Survey, environment issues remain a top concern for Gen Z and millennials. Nearly two-thirds Gen Zs and millennials have felt worried or anxious about the environment in the past month, and they are willing to pay more for sustainable products or services. Further, they want businesses to do more to be sustainable.

Younger leaders bring value precisely because they are sensitive to climate change, they have been educated, trained, and socialized in a world where climate risk is a given, not a future scenario, and they want greater action. They often connect climate impacts to social, technological, and economic dynamics—an increasingly important skill as risks become more interconnected. Climate risk is not a conventional business challenge, and relying solely on traditional experience can inadvertently reinforce blind spots.

Importantly, integrating youth leaders is not about age—it is about perspectives, knowledge, networks, and lived experience. It is not about replacing experience—it is about complementing it. Effective governance benefits from a mix of perspectives, and an understanding of how today’s decisions shape tomorrow’s constraints and opportunities.

Governance Is Not A Barrier, It Is The Pathway

In polarized political and economic contexts, governance offers something essential: durability.

Policies may change. Public sentiment may shift. But governance structures—when designed well—create stability and discipline. They help organizations navigate uncertainty rather than react to it.

This is especially important at a time when climate action is increasingly politicized. Framing climate solely as a moral or political issue makes it vulnerable to backlash. Framing it as a governance and risk management issue grounds it in the core responsibilities of directors and executives.

Climate governance is not about prescribing outcomes. It is about ensuring that decisions are informed, risks are understood, and long-term interests are protected. Real change happens when climate considerations are embedded into how organizations are governed—not added on afterward.

For corporations and financial institutions, governance is not a side conversation. It is climate action. And for the next generation of leaders, the opportunity is clear: learn the rules of governance, engage the levers of power, and use them to build resilient, competitive, and sustainable organizations.

Because the future of climate action will not be decided by who speaks the loudest—but by who governs best.