Along with the many challenges we are facing globally, climate change has been a particular topic of action within the Corporate Governance industry.

To overcome intensifying concerns, help manage risk and navigate the maze of climate-related risk reporting, the Governance Institute of Australia has released a new guide, Climate Change Risk Disclosure: A Practical Guide to Managing Climate Risk.

As mentioned in our May issue of the Global Governance Voice, the guide elaborates on proceedings that aid in the action of the steps outlined in the TCFD Guide mentioning challenges and practical guidance solutions at hand.

What is Climate Change?

According to NASA, global climate change is a long-term transformation in ordinary recorded weather patterns that defines the earth’s local, regional and global climates.

Changes observed since the early 20th century are largely caused by human activities such as burning fossil fuels, which increases greenhouse gas levels within the earth’s atmosphere, in turn, increasing earth’s surface temperature.

These actions and risks caused by human activities are the reason why Corporate and Global Governance entities have an obligation to ensure that their jurisdictions initiate and control regulations to decrease risks of increasing dangers.

Challenges of Governance Entities

As mentioned in our Global Governance Voice article, ‘Climate change risk needs to be given the same weight as other material business considerations and decisions if companies are going to survive.’

Company directors are facing intensifying levels of scrutiny of decisions made concerning climate change.

Noel Hutley SC and Sebastian Hartford-Davis have outlined two critical learnings for governance professionals. The first being the need to develop an understanding of the duties of directors in regards to risks of climate change in businesses, and the second being, the need to ensure adequate disclosure relating to material risks from climate change.

How To Practically Manage Climate Related Risks

In order to take action against arising risks within the corporate sector, Australian Securities Exchange’s (ASX) Corporate Governance Council’s Principles have now encouraged entities, for the first time, to report on any material exposures to climate change risk, hence the new Climate Risk Reporting Guide.

In addition, the guide contains a chapter that provides practical guidance and examples from multiple Australian-listed entities, such as QBE, CSR, Origin Energy, Singtel Optus Group and BHP.

Want to find out more? Read our article in Issue 18 of the Global Governance Voice.

Author

CSIA

Corporate Secretaries International Association Limited (CSIA) was established in Geneva in 2010 as an association constituted according to article 60 et seq, of the Swiss Civil Code and entered into the commercial register in Switzerland and was relocated and registered as a company limited by guarantee in Hong Kong in 2017.

Sign up to our newsletter

and stay updated.

[contact-form-7 id="75384" html_class="input-underline"]

Follow us