Call for company fiduciary duty on climate change rises
Financial regulators are warning that failure to manage climate risks in the economy will result in lost investors, and are increasingly calling for climate-related financial disclosures, according to KPMG.
The KPMG Survey of Corporate Responsibility Reporting 2017 published today found less than one in 20 (4 per cent) of large and mid-cap companies globally acknowledge the financial risks of climate change in their annual financial reports.
“Even among the world’s largest companies, very few are yet providing investors with adequate indications of value at risk form climate change,” said KPMG global head of sustainability services, José Luis Blasco.
“Investors are already taking a hard-line approach to demanding disclosure; some financial regulators have warned that failure to identify and manage climate risk is a breach of a Board’s fiduciary duty.”
The report studied the annual financial and corporate responsibility reports from the top 100 companies by revenue in 49 countries and found attention to climate risk was most prevalent in Taiwan (88 per cent), France (76 per cent) and South Africa (61 per cent), where the disclosure of climate-related risk is mandated by the government.
Upwards of 90 per cent of French-based multi-nationals acknowledged climate risk along with major headquarters in Germany (61 per cent) and the UK (60 per cent).
“Pressure on firms to up their game on disclosure is growing by the day,” Blasco said.
“Investors are also increasingly aware that topics previously considered “non-financial” can have a material impact on a business’ ability to build and protect value both in the short-term and the long-term.
“Companies need to understand the latest trends…and insure their own reports meet the expectations of a wide range of stakeholders.”
A total of 67 per cent of the world’s 250 largest companies (G250) were in the retail sector, while 65 per cent were oil or gas industries.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
