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Kevin LaCroix pointed out that there is a tendency to look in the rear-view mirror, but that directors and officers needed to be more forward-thinking if they are to limit their exposure. He drew a parallel for the potential spread of climate risk thinking in boardrooms with the relatively short length of time it took boardrooms to recognise cyber-security risks – now a top priority. There was a sense that until there are more D&O claims, the full scale of the issue will continue to be under-appreciated. Nonetheless, actions are being taken now that could be actionable in the future. “Don’t get hung up on the fact that aren’t many D&O climate change liability claims today,” Kevin said. Are boards up to the task? Panellists questioned whether most boards had the requisite skills, awareness and background mix to grapple with these issues, which poses a real risk for D&O insurers. Getting the right board composition to manage all the diverse risks faced by any given business is a challenge, but training, such as modules which are available and will be rolled out by the TCFD (Task Force on Climate-related Financial Disclosures) and others could help.
Mandatory disclosure was another hot topic. The feeling from panellists was that “we have to get to mandatory” climate-related corporate disclosures, and that although it was important to get the standards right first, the pace needs to speed up.
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