A major statement by investors and corporates on fiduciary duty and climate change disclosure is being planned for the United Nations Climate Summit in New York on September 23.
The summit, which is not part of the formal UN Framework Convention on Climate Change (UNFCCC) negotiation process, will be hosted by UN Secretary-General Ban Ki-moon to “galvanize and catalyze” climate action ahead of a hoped for legal agreement in Paris next year.
The statement is being spearheaded by the Climate Disclosure Standards Board (CDSB), the initiative that is housed within environmental data body CDP, with the support of the UNEP Finance Initiative.
The statement is open to investors, businesses, regulators and stock exchanges; the desired outcome is the availability of more “comprehensive and comparable” environmental information in mainstream corporate reports.
The CDSB is a consortium of eight business and environmental organizations, namely the CDP, Ceres, the Climate Group, the Climate Registry, the International Emissions Trading Association (IETA), the World Council for Business and Sustainable Development (WCBSD), the World Economic Forum and the World Resources Institute.
“Climate change is occurring,” the planned statement reads. “We are a group of companies and investors sharing a concern that financial markets do not yet take sufficient account of climate-related corporate performance, risks and opportunities relevant tofuture shareholder value because of a lack of comprehensive and comparable information in ‘mainstream’ corporate reports for the investment community.
“We take this step primarily out of a sense of fiduciary responsibility”
“This information gap undermines the efficiency by which markets are able to allocate capital to its most productive uses over the medium to long term – a crucial enabler of strong and sustainable economic growth.” The statement goes on to say that signatories will make use of the CDSB’s Climate Change Reporting Framework “or other comparable framework, whether or not required by current regulation”.
“We take this step primarily out of a sense of fiduciary responsibility,” the statement concludes. “We believe shareholders and plan beneficiaries have an inherent interest in the completeness and comparability of climate-related information available in annual and other mainstream corporate reports, because the economic effects of climate change are tangible and have implications for the relative prospects of firms, industries and investment portfolios.”
The CDSB hopes that a coalition of first-mover firms and investors will create a “demonstration effect”, leading to climate-related corporate performance and risk considerations being included in “routine capital allocation decision making within the financial system”. Link