Climate Risk report

International
27/10/2021
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Climate Risk is a broad term and covers a multitude of concepts. This report focuses in on three discrete risks. First, of financial institutions holding corporates to account over perceived climate risks. Second, the risk to corporates on what they do and say about the impact on their business from (or from their business on) climate change. Finally, the risk of litigation against corporates relating to climate change.

As lawyers, what we see is broadly a great desire among our clients to be part of the solution on climate change. Almost all major corporate clients that we speak to wish to take positive steps that are in line with the desire for climate action, and also to capitalise on the opportunities presented as we transition to a net zero economy. We find that, among the investment community, vast capital is ready and available to be deployed on infrastructure and other projects that will push the agenda forward. The question is whether there is sufficient clarity on the agenda, the rules and the risks involved.

Corporates are well aware that climate risks are an integral feature of their business planning. What some occasionally criticise is the lack of long-term certainty. Making knee jerk decisions based on woolly political sentiments that could change tomorrow rarely makes good business sense. Clearer long term policy statements from governments and inter-governmental institutions can help on this, as well as clearer policies on how governments see the shape of the future zero carbon economy, and the pathways to it. All eyes will be on COP26 over the coming weeks to see whether the governments of the world commit to deliver that clarity. Notwithstanding the outcome of COP26, we anticipate that the issue of Climate Risk will continue to rise and rise up boardroom agendas.

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