The guide provides insights for directors on climate change risk governance. It highlights fundamental concepts for financial professionals to consider and identifies which industries are most susceptible to climate change. It suggests that adequate governance requires a proactive approach towards identifying, evaluating, and managing climate-related risks and opportunities.

The report stresses that, as per their duties, directors must identify and evaluate climate-based risks and opportunities, and appropriate disclosure should be made to stakeholders to reflect the considered assessments. The guide also emphasises the importance of taking a strategic approach in incorporating climate change into an organisation’s respective operational framework.

Directors must embed sound foundations, processes, and structures as part of their governance approach. They should take into consideration their current status quo, including management and board accountability and disclosure metrics, and assess potential scenarios via stress testing and scenario analysis.

Lastly, the report highlights the disclosure requirements mandated by regulators, who expect greater transparency into climate risks and opportunities, both in terms of financial and non-financial impacts. It provides a comprehensive overview of the key recommendations made by leading frameworks including the TCFD, the SASB, and the ISSB, and suggests companies assess their exposure to climate change and disclose material information accurately to stakeholders.

In summary, the Climate Risk Governance Guide emphasises the critical role that directors play in assessing the potential impacts of climate change and evaluating risks and opportunities. Its recommended strategies include taking a proactive and strategic approach to climate governance, embedding sound governance processes, and adequately disclosing assessment and management of climate risks and opportunities.