Corporate Governance and Climate Change: Making the Connection

This report examines how 20 of the world’s biggest corporate emitters of greenhouse gases are factoring climate change into their business strategies and governance practices. Significant investment risks and opportunities lie ahead, say the authors: “Nothing short of a new energy and technology revolution will be required to address what may be the greatest environmental challenge humanity has ever faced.” The authors conclude that effective corporate responses to climate change “will be built on a foundation of well-functioning environmental management systems and properly focused governance practices. Only after this foundation is in place can companies expect to make meaningful progress in controlling their emissions and orienting their businesses for a carbon-constrained world.”

All of the companies profiled in this report are taking some governance actions to respond to climate change. But few have adopted comprehensive programs to treat the issue as an imminent financial and environmental threat. American companies, in particular, are pursuing business strategies that discount the threat, leaving them — and their shareholders — especially vulnerable to increased financial risks and missed market opportunities.