Research into financial sustainability governance and reporting on climate-change, social and governance matters have signalled emerging trends, that impact risks, including physical and transitional risks, many of which have impacts across the entire structure of a business. This might include revenues affected by shifting customer demands, or physical risks to assets, which impacts sustainability business strategy development.
Our research indicates the following trends in business sustainability and climate-related risk strategies:
- Climate change is now a mainstream business issue, and Canadian securities regulators have been clear that companies must disclose material climate risks and how they are addressing them.
- In exercising their duties as Directors, the board can allocate oversight of climate-related risks and opportunities to one or more committees of the board, and audit committees have a central role in ensuring the company is comprehensive and accountable in its financial reporting of climate-related financial risks and opportunities.
- Efforts to mitigate and adapt to climate change will produce opportunities for organizations, for example, through resource efficiency and cost savings, the adoption of low-emission energy sources, the development of new products and services, access to new markets, and building resilience along the supply chain.
- One of the most significant, and perhaps most misunderstood, risks that organizations face today relates to climate change. While changes associated with a transition to a lower-carbon economy present significant risk, they also create significant opportunities for organizations focused on climate change mitigation and adaptation solutions.
- It is clear that connectedness is of ongoing importance and relevance for the Sustainability and Internet economy. Connectedness will undoubtedly remain a continuing responsibility and challenge for organizations for years to come, but convergence will change the way we understand how our low-carbon economy will interact.
- The digital and knowledge divides will continue to have important consequences for economic competitiveness and participation in the global economy. Policies and programs to address these divides will need to be considered to provide basic public goods. The transition from high-carbon to low-carbon economies on such issues as education, content, culture and quality of life are key policy issues for industry and governments to address.
- Organizations in the Sustainability and Internet economy will need to expand the scope of its client base and forge partnerships with new private sector players both domestically and internationally. A more inclusive approach to policy development is called for in the increasingly networked economic society of the next decade.
- Organizations and governments will benefit by continuing to play a key role in multilateral climate-related sustainability policy development for a global information society. Organizations will need to support, encourage and participate in multilateral and global approaches to developing climate-related financial disclosures, information technology security, and global standards for reporting on environmental, social and governance matters.
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