The past decade has seen a remarkable shift in attitudes towards assessing climate change risks. A key turning point for boards was the 2016 “Hutley Opinion”, in which Mr Noel Hutley SC provided his opinion on the extent to which the law permits or requires Australian company directors to respond to climate change risks. In summary, boards have a duty of care and diligence to consider the impact of climate change risks on the company or its business model.
Within this context, Guerdon Associates supports the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), which provides businesses a framework to disclose climate-related financial information. We advise clients on how to follow the recommendations across all four pillars (i.e., governance, strategy, risk management, and metrics and targets) and provide relevant disclosures for investors and other stakeholders.
From a governance perspective, we work with clients to develop and refine the roles and responsibilities of the board and management in assessing and managing climate-related risks and opportunities.
With regard to strategy and risk management, we support clients in identifying and assessing the impact of climate-related risks and opportunities. This may involve conducting scenario analysis as appropriate. Once the impacts of climate-related risks and opportunities have been identified, we work with the client to assess the significance of those impacts, based on the severity, likelihood, and timeframe of those impacts. The prioritisation process forms the basis for a client’s approach to risk management.
We work with clients to select appropriate metrics with which to measure climate-related performance. We guide clients to set realistic, achievable targets, which is of critical importance given the backdrop of increased regulatory scrutiny of climate-related claims and potential litigation stemming from allegations of corporate greenwashing.
For organisations looking to publish a stand-alone TCFD report or climate action transition plan, we provide independent advice and perspective on how to meet investors’ disclosure expectations.