Corporate Climate Responsibility – The Rise of a New Governance Issue

Abstract

Given the absence of a comprehensive regulatory framework, international recommendations and best practices on corporate responsibility in the area of climate change are emerging. Due to their financial materiality, climate change risks have recently gained widespread recognition by international organizations and financial regulators. Accordingly, sound corporate governance requires companies to have regard to climate change issues. The authors propose the term ‘Corporate Climate Responsibility’ to frame various trends in legal doctrine and market developments.

From Bushfires to Misfires: Climate-related Financial Risk after McVeigh v. Retail Employees Superannuation Trust

“…McVeigh confirms that climate risk is fast morphing into corporate risk, opening the door to new categories of litigant 79 who enjoy a unique position in vindicating their claims compared with the rest of society, thus surmounting known obstacles to climate justice such as standing restrictions. 80 At the very least, beneficiaries of pension funds, shareholders of bank stocks, and sovereign bondholders have an economic interest in proper risk assessment and risk management. Further, as concrete interest holders, they can compel corporate and governmental change from within.…”