The ASX Corporate Governance Council says those who believe they don’t have any material exposure to environmental or social risks should consider carefully their basis for that belief and to benchmark against their peers.
“One particular source of environmental risk relates to climate change,” says the council.
These include risks related to the transition to a lower-carbon economy, including policy and legal risks, technology risk, market risk and reputation risk.
Also included are physical risks, such as changes in food security, extreme temperature changes affecting an organisation’s premises, operations, supply chains, transport needs, and employee safety, as well as water availability, sourcing, and quality.
“Many listed entities will be exposed to these types of risks, even where they are not directly involved in mining or consuming fossil fuels,” says the…