FR The Climate Disclosure Landscape
GRI, TCFD, ISSB or ESRS?
How to take action
Invite your organisation’s board to reflect on the following questions:
- Is our organisation taking action to phase out fossil fuels use, both in its operations and across the value chain?
- Does our organisation measure its full carbon footprint across its operations and across the value chain?
- Has our organisation set science-based targets, both long-term and in the interim, to reduce its carbon emissions?
Why now?
In recent years, the duties of board directors have evolved significantly in relation to climate action due to an increased understanding of the financial risks associated with climate change. As a board director, you are now expected, and in many jurisdictions legally mandated, to ensure that your organisation has established appropriate mechanisms and resources to identify and assess significant climate opportunities and risks¹. It is also seen as your duty to ensure that these issues are properly addressed and disclosed.
It is important for board directors to understand that effective climate governance goes beyond focusing solely on risks. By adopting a narrow focus, you might overlook potentially significant opportunities that good climate governance can bring to your organisation.
Overview
If you cannot recognise the acronyms above, this section will help you to better understand the climate disclosure landscape and guide you through the basics of climate disclosure requirements.
Aim for climate management to be a shared responsibility and send a clear message that climate competence is a top priority in your organisation.
To achieve effective management of climate opportunities and risks, you may want to enable your organisation to:
- Measure its greenhouse gas (GHG) emissions.
- Report and disclose those GHG emissions and set targets to reduce them.
- Establish a credible transition plan towards net-zero GHG emissions.
- Deliver the climate ambitions of the plan, monitoring progress and adjusting accordingly.
Your organisation may have ambitious climate goals, but if the industry associations you are involved with do not align with global climate ambitions, supporting fossil fuels interests for instance, your GHG reduction goals could be considered as greenwashing.
Initiatives such as InfluenceMap, are mapping the climate policy advocacy by companies and in different regions of the world, making it easier to visualise which companies are genuinely delivering climate action in contrast to greenwashing claims.
Now that you have a broader understanding of global policies and climate change projections, here are some ways you can contribute to make a difference.
Climate risks for business
It is estimated that between now and 2100, the potential financial losses arising from climate change could run from $4.2 trillion to as much as $43 trillion. Addressing climate change now not only outweighs the cost of climate mitigation in a warmer planet, but also helps to reduce risks of increasing climate impacts while offering social and economic benefits.
Global Cooperation
The United Nations Framework Convention on Climate Change, or UNFCCC, is an international treaty that lays the foundation for worldwide cooperation on climate change.
The Marrakech Partnership
The Marrakech Partnership for Global Climate Action is a collaborative framework that opens the door to a world of extraordinary opportunities.
Rising to the challenge
The world must rapidly shift away from unabated burning fossil fuels — the number one cause of the climate crisis.
As a board director, you can ask the question about whether climate change is a material business issue for your business and explore pathways for your organisation to transition away from fossil fuel use within its operations and across its value chain. You can also focus on delivering climate action through mitigation and adaptation.
- Climate mitigation refers to reducing or preventing GHG emissions (for example by switching to renewable energy sources, innovative agricultural practices, and reducing deforestation)
- Climate adaptation aims to decrease vulnerability of human and natural systems to the risks and impacts of climate change (through, for example, improving infrastructure, enhancing ecosystem services, and implementing early warning systems).
There are multiple approaches that your organisation can take to mitigate and adapt to climate change. The figure below offers some examples of climate responses, their cost in the short-term and their feasibility to limiting global warming to 1.5C:
Overview
The science is clear, taking bold climate leadership today not only safeguards the viability of your business operations in the long run but also enhances resilience, reputation, and competitive advantage. On the other hand, delaying action will only worsen the challenges and limit opportunities for future generations.
In this section, you will learn climate science facts from the United Nations Intergovernmental Panel on Climate Change (IPCC), the global scientific body that assesses climate change science and provides a robust foundation for informed decision-making.
To navigate this landscape with confidence, please explore the Climate Governance Initiative’s explainer for board directors ‘Navigating the Climate Disclosure Landscape’ which includes an interactive tool; and a briefing from the Commonwealth Climate and law Initiative (CCLI) ‘Climate Change Disclosures: What Board Directors need to know’.