Director FAQ: Climate Governance

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In brief: Once considered a long-term risk primarily affecting carbon-based energy companies, climate change has now become an urgent issue for a variety of industries experiencing disruption stemming from long-term changes in the earth’s climate. With regulators, investors, and other stakeholders watching this issue closely, boards are intensifying their oversight of this area. This FAQ, informed by NACD’s work with the global Climate Governance Initiative, discusses how corporate directors can oversee and respond proactively to climate change risk. This memo offers guidance on climate change governance for corporations, including standards, metrics, and current board practices. The FAQ closes with a climate change glossary and an annotated list of climate change resources.

This FAQ can help directors to

  • gain a deeper understanding of the causes and effects of climate change,
  • see what they as directors can do to anticipate and mitigate the effects of climate change, and
  • learn about adaptive strategies to move toward a low-carbon future.

Most relevant audiences: board chairs, lead directors, risk committee members, and board members.