Institutional investors call for assessment of climate change risk
However, the shift globally to respond to climate change is much wider than simply a new business opportunity. Addressing climate change is bringing with it better reporting standards that encompass environmental and social impacts. Such comprehensive voluntary reporting and disclosure will significantly lift the bar for regulators, according to former US Treasury Secretary, Michael O’Neill: “I’m for making this really clear, and I honestly think we’ll get clearer data and disclosure if it’s outside the SEC process than if it’s part of that mandated mess we’ve got now as a gift from Sarbanes-Oxley.” (CSRWire) So those who now deliver poorer quality reports will begin to attract the attention of regulators. Once the process of better reporting begins, however, there is no turning back. We will have to manage what we report as Michael Nugent from Global Reporting Initiative argued in “Good Business” last month. (Good Business).
It is an example of legitimately making a virtue out of necessity, as CSR wire argues:
“Given the clear scientific implications of climate change, it is impossible to deny the inevitability of material financial impacts from global warming, so fiduciary duty dictates that institutional investors must address climate risk in their portfolio decisions.” (CSRWire)
