CLIMATE RISK: What the Board of Directors Need to Know 

The climate is changing at the fastest rate in history with severe consequences for earth’s inhabitants. The changing climate impacts the quality of our lives and the financial wellbeing of many entities. Climate change directly and indirectly impacts economic outcomes, such as agricultural output, critical economic resources, manufacturing, energy production, transport, supply chain and other services, as well as wider human and animal welfare.

As a company director, you have a duty of care and diligence under section 180 of the Corporations Act 2001 and under the common law.  Organisations are increasingly focusing on the impact of climate change and environmental issues on current and future corporate performance. The Board, CEO and leaders have started to realise that climate risks and opportunities are not abstract concepts, but are essential for creating a sustainable business model that delivers long-term value.

This guide aims to help directors understand their climate risk responsibilities and take steps in the right direction. The guide includes:

• a valuable checklist that directors can use to evaluate their climate risk posture.
• a summary of the legal and regulatory climate reporting and disclosure requirements.
• typical climate risk assessment challenges that are often experienced.