January 20, 2016

Global Task Force to Develop Climate Change Disclosure Standards

The Financial Stability Board (FSB) announced that an industry-led task force – to be chaired by SASB Chair and former NYC Mayor Michael Bloomberg – will be developing recommendations on voluntary comparable climate-related risk disclosure standards for companies to use with investors and other stakeholders. The work will be conducted in two stages – with the aim of making specific recommendations for voluntary disclosure principles and leading practices by the end of 2016.

Per the release, the wide range of existing disclosure schemes relating to climate or sustainability illustrates the need for consensus on what constitutes effective disclosure. The task force – to be composed ultimately of up to 30 private sector senior technical experts from preparers and users of company risk disclosures, as well as risk analysts – will consider the work of other groups related to effective disclosures and will conduct public outreach during the disclosure development process.

SASB’s December newsletter claims that climate-related issues are reasonably likely to have material impacts in 72 of 79 SICS industries (or 51 of 57 industries for which it has already issued standards) – representing 93% of U.S. equities by market cap. That being the case, CEO and Founder Jean Rogers notes that investors realistically can’t simply divest themselves of those stocks that pose a risk in order to mitigate the effects of climate change; rather, investors need sufficient data about the risks so as to create a responsive investment strategy.

Bloomberg also serves as the United Nations Secretary-General’s Special Envoy for Cities and Climate Change.

See this WSJ article, “Business Supports Climate Deal With Varying Degrees of Enthusiasm,” and additional resources in our “Climate Change” Practice Area.

CalPERS Steps Up Climate Change Engagement

Armed with the results of a recent study that identifies carbon-intensive companies in addition to energy, CalPERS reportedly plans to begin engaging with more companies in its portfolio on climate change. CalPERS’ Investment Director of Global Governance Anne Simpson said that the study completed earlier this year showed that fewer than 100 companies in its $300 billion portfolio were responsible for half of its carbon dioxide emissions, including companies in the construction and materials, basic resources, travel and leisure, chemicals, and food and beverages sectors.

This study means that we can be laser-focused on where we take our engagement,” CalPERS’ Investment Director of Global Governance Anne Simpson said on the sidelines of the Paris climate conference. “We want the underlying companies in our portfolio to be aligned with the transition to a low-carbon economy.”

See also this joint CalPERS and CalSTRS climate change fact sheet, and CalSTRS’ supporting statement on the draft release of the Paris Agreement under the United Nations Framework Convention on Climate Change as part of the Conference of the Parties in France.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Relationship Between Auditor Tenure & Skepticism
– Disclosure Requirements: Auditor Resignations or Dismissals
– Director Candidates: Background Checks
– Automotive Industry Launching Cybersecurity ISAC
– Survey: Ethics & Compliance Training


– by Randi Val Morrison