Although tax season just ended, addressing climate risk and sustainability should remain at the forefront of every CxO’s mind. Why? It’s about potentially missing significant opportunities to increase efficiencies and reduce costs through improved internal processes and controls, reduce risks across all areas of operations, drive innovation, and build resiliency into your firm.
The Securities and Exchange Commission guidance published in February 2010 about disclosure of climate risk is intended to highlight the concern management has about the risk they see. Any quantification of that risk is expected to be stated in the financial statements as compliance costs or unforeseen capital expenditure required for compliance of new regulations or due to physical impacts, such as flooding.