Climate Change, Corporate Disclosure, and Financial Risk
Since Mark Carney’s Lloyds of London speech on the “tragedy of the horizon” and the formation of the Financial Stability Board’s “Task Force on Climate-Related Financial Disclosure” (TCFD) in 2015, mainstream members of the financial sector have come to recognize the importance of climate change to corporate risk management, disclosure, and investment decisions. The private sector has improved its understanding of how efforts to transition to a lower carbon economy, the physical consequences of a changing climate will impact the economy, and the role that industry plays in mitigating and adapting to climate change. The financial sector is grappling with how to understand and account for such risks in investment, lending, and other financial decision-making. Regulators are considering how these risks affect markets and the economy as a whole.
The US is entering a new era in this discussion — one in which our financial regulators move from researching climate change to acting to address its impacts. After years of sitting on the sidelines as companies and investors talked about how to consider climate change in their work and financial regulators in other countries began to address the issue, federal financial regulators (and some state regulators) are beginning to make a mark.
Since 2018, EELP has studied the legal questions that arise as climate change impacts become more apparent to companies and investors alike. We’ve analyzed how the state of the law has shifted as reasonable investors incorporate climate change information into their decision making and are closely following developments to provide sound legal analysis that will influence and make sense of regulatory choices.
Scroll down for resources to keep up to date with this rapidly changing area of law including our Financial Regulator Climate Action Tracker and Timeline of Investor and Bank Use of Climate Information. See our full list of publications, podcasts, and appearances at the bottom of the page.
Contact us to be connected to our lead in this area, Staff Attorney Hana Vizcarra.
Return to our Private Sector Governance and Innovation Project page for more work on corporate response to climate change and the legal and regulatory topics that shape it.