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Company directors in Singapore could face personal liability if they fail to take action to address climate change risks, according to a new legal opinion by a team of independent legal counsel. The legal analysis finds that Singaporean directors are obliged to consider climate change impacts as part of their duties to act in the best interests of the company. Therefore, directors could be subject to litigation if they fail to respond to climate risk – particularly where those risks are material to the business.

This white paper argues that in view of the well-established physical, transition and liability risks associated with climate change, and in light of the measures taken by the Singapore government and regulators to address these risks, directors of companies are required under Singapore law to take into account climate-related risks in their decision-making process, failing which they will be liable for breaching the duty to act in good faith in the best interests of the company and the duty to exercise reasonable diligence.

Luminous has developed this briefing guide for UK-listed companies starting out on their TCFD reporting journey. In November last year, the Financial Conduct Authority (FCA) announced that reporting against the recommendations will become mandatory in the UK from 2022, with disclosures to be included in the Annual Report. While some of the TCFD recommendations overlap with existing non-financial reporting requirements, others do not and are likely to require new disclosures. This guide is designed to help companies navigate the recommendations, identify where existing activity and data is relevant, and pinpoint where new information is required.

This primer is an updated version of A Primer for Environmental & Social Disclosure, originally published by CPA Canada and TMX Group in 2014. It is intended for Toronto Stock Exchange (TSX)- and TSX Venture Exchange (TSXV)-listed issuers seeking to get started on the E&S aspects of their ESG disclosure, or looking to enhance their existing E&S disclosure in regulatory filings. It provides guidance with an emphasis on small- and medium-sized issuers.

Climate risks are now fully recognized as financial risks by asset managers, investors, central banks, and financial supervisors. As a result, the integration of climate risk metrics into risk management processes is moving up agendas worldwide. In that context, a rapidly growing number of market participants and financial authorities are exploring which metrics to use to capture climate risks, and to what extent the use of different metrics delivers heterogeneous results. This discussion note takes a first step in analyzing the convergence in assessments of climate-related transition risks across metrics providers, based on the ECB corporate bond portfolio. Our findings show that firms’ risk assessments across metrics are fairly heterogeneous but tend to converge on which firms are most and least exposed to transition risks. We also show that the temperature targets and time horizons underlying the metrics matter, although moderately, for the assessment of firms’ risk exposure and that providers using similar methodologies tend to deliver more convergent assessments. Our findings contribute to the growing recognition that asset managers, investors, central banks and financial supervisors can and should use available metrics to better integrate climate risks into risk management and financial supervision.

After the adoption of a new EU Biodiversity Strategy for 2030 in May, EU Green Week highlighted the contribution biodiversity can make to society and the economy, and the role it can play in supporting and stimulating recovery in a post-pandemic world, bringing jobs and sustainable growth. ACCA, Capitals Coalition and Deloitte invited stakeholders to their joint session called “Incorporating Nature in The Heart Of Business Decision-Making And Disclosure”.

Environmental, social, and governance (“ESG”) issues, long considered niche, are now core material concerns of investors and boards of directors alike, according to a survey conducted by the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School and LeaderXXchangeⓇ.

A team of academics from the Millstein Center and experts at LeaderXXchangeⓇ surveyed more than 130 investors and directors in Europe and North America to understand whether and how institutional investors and board directors incorporate climate-related issues in their investment decision making and their oversight responsibilities.

More than 60% of directors and 70% of investors surveyed indicated that climate risk is already impacting their business today. Other key findings, detailed below, reveal not only that both groups find ESG issues to be material, but that there are certain demographic and regional differences within each group’s views.

Selected Key Findings:

Investors and directors believe climate change issues are material:
– More than 60% of directors and 70% of investors indicated that climate risk is already impacting their businesses today.
– 75% of respondents believe they hold an ethical obligation to incorporate climate risk into their strategy.

Investors and directors view climate disclosure as a significant deciding factor:
– A majority of both groups indicated they view climate disclosure and financial reporting as equally important.

Investors in Europe appear more interested in climate-related issues:
– 88% of European investors think that climate risk reporting is at least equally as important as financial reporting; only 67% of North American investors agree.

This report is a practical tool built by investors and for investors to understand what a net zero by 2050 pathway looks like, including details on how it affects 10 key sectors. It also provides toolkit to evaluate the maturity and quality of companies scenario analysis disclosure. As an increasing number of companies commit to Paris Agreement aligned emissions targets, this will be a valuable resource in helping investors better understand the portfolio implications of these decarbonization pathways.

Climate-related financial risks might have the potential to trigger the next systemic financial crisis, as recently stated by the Bank of International Settlements. In consequence, understanding these so-called Green Swan risks should be a key priority in financial decision making and supervision. However, a systematic approach and a comprehensive theory on climate-adjusted financial risk metrics is still missing. This study is a first step to fill this gap, with a focus on transition risks. Drawing on insights from climate science, economics and finance research, this paper derives a set of important criteria to ensure that climate risk tools provide high quality, comparable, and decision-relevant results. A sample of 16 climate transition risk tools are used to conduct two lines of research: First, by aid of descriptive analysis, the paper assesses the tools’ coverage of risk sources and financial assets, their inputs (i.e. underlying climate scenarios), and their outputs (i.e. climate-adjusted financial metrics). Second, the paper uses the previously defined criteria for an in-depth analysis of the quality, comparability and decision-relevance of the tools. The results will be presented at the individual tool level, and at the meta level. Based on the results of this descriptive and criteria-based analysis, the paper derives potential next steps for tool provider, conclusions for potential tool users, and guidelines for supervisory authorities. The analysis could be used as starting point for building a comprehensive theory of meaningful climate-related financial risk indicators, aid practitioners to select the tools best suited to their needs and use cases, and inform regulatory processes on financial climate risk assessment principles.

This guide gives investors a framework to help them understand and engage on deforestation-driven climate risks across their portfolios. It is especially intended for investors who are relatively new to deforestation and may be engaging on climate risk but not deforestation risk. The guide will help them understand the drivers of deforestation risk and prioritize company engagements based on industries, geographies and sourcing patterns. It also outlines key expectations that investors should be looking for in corporate climate and deforestation commitments and example questions for company and sector engagements. Lastly, the guide provides concrete next steps investors can take to address deforestation risk.

This report reflects interviews with corporate professionals about the roles and activities of finance in their organizations’ sustainable business and integrated enterprise activities. An overarching consensus is the need for proven, supported methodologies that demonstrate enhanced performance and added value. This is a key mission for the current cohort of CFOs and professionals who aspire to senior business leadership roles. In order to break silos on the way to the C-suite, these corporate professionals need a value-creation mind-set and a working command of the concepts of risk management, governance, innovation, talent management, technology, environmental management, and social responsibility.

For decades, Environmental, Social, and Governance (ESG) scoring of investments, and public reporting of those scores, has focused mainly on one side of a two-sided coin, namely, what a business or asset is doing to the planet — particularly, the “Carbon Footprint” of that company measured by CO2 greenhouse gas emissions. The other side of that coin is, of course, what the planet is doing to the same business or asset, or its physical climate risk or “Risk Footprint.”