Climate Change and Corporate Governance offers a comprehensive account of the main trends and issues related to the implications of climate change for corporate governance. It informs policy makers on some of the most relevant factors they should consider when evaluating and improving their legal, regulatory and institutional frameworks for corporate governance. This report focuses in particular on climate change challenges related to corporate disclosure, the responsibilities of company boards and shareholder rights.
The report also supports the OECD Corporate Governance Committee’s ongoing review of the G20/OECD Principles of Corporate Governance, which is the leading international standard in the field of corporate governance. One of the most important issues under discussion is how to enhance the quality, reliability and comparability of corporate sustainability information. This is especially important for investors to better understand the risks they are facing and to efficiently allocate capital to the companies that are better able to thrive in a low-carbon economy.
The issues discussed in this report are considered within the framework of the broader discussion taking place on environmental, social and governance (ESG) risks and opportunities, focusing more specifically on climate‑related ESG risks for two reasons. First, from a practical viewpoint, many governments, regulators and standard-setters such as the Financial Stability Board (FSB) have expressed a preference for initially focusing their attention and resources on risks deemed to be high priority by a great number of companies and investors. Second, it would be a much bigger and more ambitious task to attempt to comprehensively cover all aspects of ESG risks and opportunities in one sole report, particularly considering the complexity and variability of information available on different ESG topics (e.g. biodiversity and human rights). This focus on climate change provides an opportunity to look concretely at how current ESG frameworks for disclosure, consideration of risks and other corporate governance issues may be applied on a particular ESG topic.
This report was authored by Caio Figueiredo Cibella de Oliveira, Tugba Mulazimoglu and Daniel Blume under the supervision of Serdar Çelik. It benefits from discussions within the OECD Corporate Governance Committee and incorporates comments from delegates. The authors are also grateful for comments from the Responsible Business Conduct Centre and Financial Markets Division within the OECD Directorate for Financial and Enterprise Affairs, as well as from the OECD Environment and Development Co‑operation Directorates. The report was prepared for publication by Pamela Duffin, Liv Gudmundson and Greta Gabbarini.