Climate change is one of the most critical issues facing the world today. The effects already pose significant challenges to the global economy and individual corporations. Wildfires, super storms and coastal flooding are only a few examples of the severe risks businesses will face in the coming decades. Despite the growing and rapid disruptions caused by the ongoing climate change and its potential adverse impacts on the stability of global financial system, many companies do not report climate-related financial risks to their shareholders both in terms of the physical risks as well as transition risks that climate impacts pose to their operations, physical assets, supply chains as well as the current and future business models.
On September 17, 2018, Senator Elizabeth Warren bill introduced The Climate Change Disclosure Act to congress. This bill would require public companies to disclose critical information about their exposure to climate-related risks including its greenhouse gas emissions, fossil fuel-related assets and how its valuation would be affected by certain climate change forecasts. This would help investors appropriately assess climate-related risks poses and accelerate the transition away from fossil fuels to cleaner and more efficient energy sources.
Domini stands in support of the Climate Risk Disclosure Act of 2018 and the effort for our government to enforce recommendations from The Task Force on Climate-related Financial Disclosures under the Financial Stability Board. The Union of Concerned Scientists, along with Domini and 32 other environmental and investor groups, have written the following letter in support of this bill.
Further, Senator Warren’s bill is also well aligned with the goal 13 of the United Nations Sustainable Development Goals, which is a global effort to address world’s significant challenges to achieve sustainable society.