On March 21, the Securities and Exchange Commission passed a proposed rule on climate disclosure — the first of its kind. The 510-page proposed rule, if passed, would impose a series of disclosure obligations on companies, including “disclosure about whether and how the board sets climate-related targets or goals and how it oversees progress against those targets or goals, including the establishment of any interim targets or goals.”

The likelihood of a significant new disclosure rule should instill a sense of urgency in corporate directors to work with management to set and meet major climate targets.

But setting climate pledges is easier said than done. The Corporate Climate Responsibility Monitor 2022 of the New Climate Institute studied 25 major multinationals across a variety of industries to assess the quality and effectiveness of their pledges. The institute looked at how companies were tracking and disclosing emissions, setting specific and substantiated targets, reducing emissions, and making contributions and/or offsetting emissions.

The institute found that most of the companies they studied set low or ambiguous targets, and failed to take the necessary actions to meet them. No company scored with “high integrity” under this test. Four companies had “reasonable” or “moderate” integrity. Most companies had “low” or “very low” integrity.

And the institute is not the only critic of corporate climate progress. Congress is also scornful of company efforts to curb carbon emissions. On February 8, the House Committee on Oversight and Reform held hearings on Big Oil’s climate pledges. In her opening statement, panel Chair Carolyn B. Maloney accused oil companies of “greenwashing” their images and spreading climate “disinformation.” And now, Russia’s invasion of Ukraine is creating a push for more domestic oil production.

Meanwhile, Congress is currently considering nearly 1,000 bills related to climate, and the SEC is active, too. Last year, then-acting-chair of the Securities and Exchange Commission Alison Herren Lee called for public input on climate disclosures, with comments flooding in throughout March. In 2021, the SEC sent 43 letters asking companies for more climate info, compared to zero letters in the previous four years, according to the Wall Street Journal. And now, this historic proposed rule.

Yet, the Supreme Court is now hearing a challenge to the Environmental Protection Agency’s power to regulate emissions, which, if successful, could enable a backlash against climate initiatives. Even some major shareholders seem ready to slow their quest for climate justice — based on a notable slowdown in climate resolutions this proxy season. These countertrends make it all the more important for boards to be proactive in this area.

Unquestionably, climate governance is critically important, as organizations navigate the way forward. Indeed, boards need to act with intention during these times of increasing climate urgency combined with shifting climate policy. Boards can and should institute formal processes for climate governance.

In fact, boards should also practice all principles of climate governance, as outlined by the National Association of Corporate Directors/World Economic Forum climate initiative, namely:

—Ensuring climate accountability — delivering on promises made.

—Building board-level knowledge — seeking new opportunities to learn more about climate issues for their companies and industries.

—Strengthening board and committee structure — considering a formal place for climate oversight through an existing committee or a new one.

—Assessing climate’s material risk and opportunity — taking an adaptable attitude toward changes in markets and supply chains.

—Integrating climate into strategy — planning for a warmer world.

—Reporting comprehensively — maintaining awareness of what shareholders and other stakeholders (including regulators) will want to know.

—Maintaining meaningful stakeholder dialogue.

If boards do this, they will be ready for any questions — whether from a member of Congress at a hearing, or from a shareholder at an annual meeting. Companies simply cannot uphold their climate commitments without climate governance. And the board’s role is crucial — especially given their extended tenure and focus on long-term value creation.

The bottom line? Without dedicated board engagement and oversight, it becomes increasingly likely that climate commitments will simply become more false promises.