Questions to Assist Directors

The actions required to fulfil directors' duties and disclosure obligations will depend on the laws of the jurisdiction and unique circumstances of the company and situation. 

To assist directors, we offer some high-level questions:

• Climate risks and corporate strategy: Does my board actively consider the foreseeable and material financial risks to the company associated with climate change (including those risks arising across our value chain and in relation to specific projects or acquisitions) and the potential impacts on corporate risk management and strategy?
• Board engagement and oversight: Do I meaningfully engage with and scrutinise information and advice concerning climate-related risks presented to the board? Do I need to seek independent advice? If climate change is never on the board agenda or in management reports, do I ask why not?
• Climate risk management and reporting: Has my company embedded robust procedures to ensure that foreseeable and financially material climate risks are identified, managed, and reported to the board? Are these risks appropriately disclosed in external reports and financial statements?
• Net zero targets and transition planning: Has the board considered whether to set a net zero target by 2050 or sooner? If so, how will we ensure the target based on robust and credible plan to navigate the financial risks and opportunities as my company and the global economy transition to net zero emissions? How is this information communicated to investors?
• Capital expenditure and emissions targets: Is my company’s capital expenditure aligned with our emissions reduction targets and/or a Paris-aligned 1.5℃ scenario? If not, does management have a plan to do so? 
• Peer activity and external pressure: Have any of my company’s peers faced climate-related shareholder proposals, criticism from influential investors or the proxy advisors, or lower than expected votes on director or auditor appointment attributed to dissatisfaction on climate issues? Have any of my company’s peers been subject to regulatory investigations or climate litigation?
• Knowledge and expertise: Do I have a sufficient level of knowledge on the physical, transition, liability, and systemic risks associated with climate change to fulfil my duties to govern the management of these risks? Does my board identify potential knowledge gaps among board members and organise appropriate training, and/or seek expert advice to address them?

In each country section, experts offer their views about corporate governance practices and actions that boards can adopt to mitigate climate change risks and to better identify opportunities.