Companies failing to address climate-related financial risks

28th March 2018


P6 climate financial risk istock 519464872

Related Topics

Related tags

  • Finance ,
  • Global

Author

Catherine Mackenzie

Just one in 10 companies globally provide incentives for board members to manage climate-related risks and opportunities, reveals a new report from CDP..

This is despite 83% recognising the physical threats of climate change, with 88% identifying policy changes and regulations as the biggest challenges posed by transitioning to a low-carbon economy.

The research involved analysing the risk management strategies of 1,681 firms worldwide, and comes more than two years after the Task Force on Climate-related Financial Disclosures was launched in December 2015.

“Overall, we see there is a surface level of preparedness from companies globally to have board level oversight of climate risk and opportunity” CDP task force engagement director, Jane Stevensen, said.

“What we are not seeing is increased governance translating into climate change mitigation. 2018 is the year when companies need to step up climate action as we approach a tipping point.”

Approximately 96% of UK companies have board oversight of climate change – the highest proportion of any country studied – while it also has the most firms disclosing scope 1 and 2 emissions with 97%.

China has the lowest percentage disclosing these emissions, while the US has the least amount of companies preparing to use carbon pricing and the lowest proportion with board oversight.

Germany has the highest amount of firms providing incentives for board members to manage the threats of climate change with 29%, although France is not far behind on 25%.

CDP said there has been significant regulatory, investor and corporate activity in developing climate-related financial disclosures, but that the challenge now is to embed this into corporate strategies and cultures “from board to the front line”.

“Management of environmental issues can no longer be the sole responsibility of sustainability teams: it needs to be a priority area for companies boards,” Climate Disclosure Standards Board managing director, Simon Messenger, said.

“We are more than ever at a crunch point between systemically embedding a market failure or embracing a major opportunity to innovate and grow.”

Image credit: iStock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

Facing the climate emergency challenge in local government

It’s well recognised that the public sector has the opportunity to work towards a national net-zero landscape that goes well beyond improving on its own performance; it can also influence through procurement and can direct through policy.

19th March 2024

Read more

The UK government’s carbon capture, usage and storage (CCUS) strategy is based on optimistic techno-economic assumptions that are now outdated, Carbon Tracker has warned.

13th March 2024

Read more

The UK’s new biodiversity net gain (BNG) requirements could create 15,000 hectares of woodlands, heath, grasslands, and wetlands and absorb 650,000 tonnes of carbon each year.

13th March 2024

Read more

The UK government’s latest Public Attitudes Tracker has found broad support for efforts to tackle climate change, although there are significant concerns that bills will rise.

13th March 2024

Read more

Multinational corporations are undermining their net-zero commitments with excessive air travel and no plans to reduce ‘the low hanging fruit’ of carbon footprints, a study by Transport & Environment has found.

13th March 2024

Read more

The UK government’s climate adaptation plans are ‘inadequate’ and falling ‘far short’ of what is required, the Climate Change Committee (CCC) has warned today.

13th March 2024

Read more

Large businesses across the world are avoiding climate action due to fear they will be called out for getting their work wrong, according to a new Carbon Trust report.

29th February 2024

Read more

A thought-provoking discussion on how storytelling can change the world took place in Central London last night, alongside an exclusive sneak preview of an upcoming IEMA film series.

29th February 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close