7
Introduction
NIGEL BROOK PARTNER, CLYDE & CO
Contents
Much has changed since we published our first climate risk report two years ago, at a time when it was still a relatively nascent boardroom issue for businesses outside the energy sector. The countdown to net zero carbon emissions has now truly begun and developments around climate change risk and regulation are accelerating, with implications for all industries. More than 110 countries have now committed to becoming carbon neutral by mid-century, including major emitters such as China (by 2060), the EU, the UK, Japan and South Korea, and around two thirds of total emissions now fall under such pledges 1 . But global emissions need to almost halve by 2030 from 2010 levels, if the world is to have a chance of keeping warming below 1.5 degrees 2 , and policies to achieve that are lacking. Governments are increasingly being held to account if their actions are deemed not to live up to their pledges. Public perception of climate change is shifting rapidly, and growing numbers of people, young and old, are adding their voices to calls to tackle the issue faster. More and more companies of all shapes and sizes are starting to see that beyond the damage caused to the planet, climate change could pose a threat to their business models. They recognise the need to be ahead of the curve to avoid a disorderly transition to a low carbon economy and face up to social, economic, legal and regulatory demands.
It’s a lot to think about, at a time when many othermajor issues – notably the impact of the COVID-19 pandemic – are also clamouring for attention on the boardroom agenda. Despite the challenges,apathway toprogress is essential. This year’s United Nations COP26 climate change summit in Glasgow is likely to set the pace in terms of defining and strengthening the policy response. Since achieving net zero will require significant investment as well as regulation, this could create major opportunities for businesses, as well as risks. As companies build resilience, the importance of good governance cannot be overestimated. Putting climate risk awareness at the heart of decision-making and embedding it into both strategy and culture at all levels of an organisation is an important step. Since legal considerations extend beyond environmental law and regulation to areas like asset management, finance, insurance, tax and many more, businesses are looking to their lawyers for deep knowledge of all the issues and out-of-the-box thinking to guide them through the transition. At Clyde & Co, we have developed market- leading expertise and a reputation for innovation in this space. In this report we look at all the key issues, from recent and emerging developments in this area, to how organisations can best position themselves to withstand shocks and seize the initiative, so that they can help to deliver a future that is sustainable for themselves, and for all of us.
07. Introduction
09. What is the impact of COVID-19 onthe climate change agenda?
13. What does the risk landscape look like today?
25. Reporting requirements: what dobusinesses need to know?
31. How can good governance help address climate risk?
37. What are
40. Conclusion
41. Contributors
the insurance implications of these issues?
UN News https://news.un.org/en/story/2020/12/1078612
1
2 UN Climate Change https://www.un.org/en/climatechange/science/key-findings
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