It’s been a few years now since the US Securities & Exchange Commission staff reminded boards of directors of publicly-traded companies that they have an affirmative responsibility for risk oversight from both the risk and opportunity equation.
So – is Climate Change a risk? A growing number of stakeholders say “Yes.”
And that growing number of stakeholders, including asset owners and managers, are expecting that the companies in their portfolio will be conducting a materiality assessment and then disclosing board/management discussions and decisions taken, regarding climate change risk and opportunities. The key word is materiality. Climate change is an important issue being raised frequently by investors in the current proxy season.
The consensus has been growing among many stakeholders: Climate change is material in the context of existing consenus on materiality. (That is – would this information, added to the mix, cause an investor to make a buy/sell/hold decision?)
The debate is expanding: Keith Larsen, a reporter-intern at Greenbiz, presents important perspectives in our Top Story. We are pleased to see our long-time Fellow of the Institute, Michael Muyot, weighing in and sharing his wisdom. Notes Muyot: “Companies will keep [not disclosing sustainability information] as long as they can get away with it. I don’t know if they don’t think it’s not material…”
What are you views? Read the story and decide: Materiality Matters: Why don’t companies have to disclose sustainability risk? (Tuesday – April 28, 2015)Source: GreenBiz – Given that disclosure of financial risk always has been a difficult mandate for publicly-traded companies, requesting the voluntarily disclosure of sustainability risks may seem like a nearly Sisyphean task…