Related Author: Oliver Williams, Trainee Solicitor at Mayer Brown
Many factors are putting pressure on corporates and financial institutions to address climate change. The UK is currently rolling out mandatory economy-wide disclosure in accordance with the Task Force on Climate-Related Financial Disclosures (‘TCFD’) Recommendations. Beyond this lies immense investor and stakeholder pressure, including by way of shareholder resolutions, and increased media, NGO and ratings agency attention on those who are perceived to not be doing enough. We are now living in an “ESG world”, and it is all but impossible to address the “E” without a sound climate action plan of some kind.
It can be hoped that during and following COP26, national governments will submit further Nationally Determined Contribution (‘NDC’) goals under the Paris Agreement, given that NDCs submitted to date are not ambitious enough to be consistent with climate science. Nonetheless, it is essential for companies to have comprehensive climate action plans to ensure they are able to mitigate the risks (both physical and regulatory), and take advantage of the opportunities, presented by climate change.
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