It's no secret that the Qantas Airways Ltd (ASX: QAN) share price has been hammered by COVID-19.
And it's not just Qantas.
Most companies trading on the S&P/ASX 200 Index (ASX: XJO) took a big hit in February and March 2020 as coronavirus went global. But ASX 200 travel shares were among the most impacted as international and even domestic air travel all but ground to a halt.
And while travel shares have come roaring back from their late March 2020 lows, they're still trading well below their pre-pandemic levels.
The Qantas share price, for example is up 138% since 20 March 2020. But it's still down 22% from 3 January 2020.
Now, with more normal air travel looking to resume Down Under, Qantas shareholders are hoping for some healthy tailwinds.
But with growing scrutiny on global warming, could climate issues pose a bigger risk to the Qantas share price than COVID?
Is it getting hot in here?
According to a new report by the Investor Group on Climate Change (IGCC), A Changing Climate: What investors expect of company directors on climate risk, Australian company directors don't have the experience or skill sets they need to transition their companies to net zero emissions by 2050.
IGCC, which represents Aussie and Kiwi investors with total funds under management of more than $2 trillion, added that it remained uncertain how directors were addressing the skills and experience gap.
The group's Climate Action 100+ initiative focuses on the world's largest corporate greenhouse gas emitters. 167 companies are currently part of the initiative. That includes 15 ASX listed shares, Qantas among them.
What do the experts say?
According to Ian Woods, the report's lead researcher:
Climate change risk is still being seen by companies as a reputational or environmental risk and not as a significant business or investment risk.
Assessing fifteen Australian companies, we found that many companies identified the need for climate skills on their board, but few identified broader transition and disruption expertise, and none were comprehensively disclosing on board skill sets. Based on current disclosure it is hard for investors to form a view on how prepared these boards are for the transition.
Laura Hillis, IGCC's director of corporate engagement added:
Boards that fail to recognise the risk of climate change and their role in driving the company transition to a low carbon business, will leave the company and investors exposed to unacceptable financial, strategic and market risks. Not to mention they will miss out on the opportunities on the decarbonisation pathway, including jobs for regional communities.
Is this a case of out of the frying pan into the fire for the Qantas share price?
Time will tell.
Qantas share price snapshot
At the time of writing, the Qantas share price is up 0.72% trading at $5.63. Qantas has managed to edge over the ASX 200 this year, with shares gaining 14.4% compared to 11% for the index.
Over the past month the Qantas share price is down 2%.
