The EU has proposed legislation that will require listed companies, banks and insurance firms in its member states to report on their exposure to risks related to environmental matters such as biodiversity loss and disease pandemics. The EU Commission’s draft document cites experts who state that habitat loss and a warming climate may lead to greater transmission of diseases between animals and people, and that such factors, related to human activity, pose risks to organisations’ long-term prospects.
“It is important – now more than ever – to address the multiple and often interacting threats to ecosystems and wildlife to buffer against the risk of future pandemics,” says the EU’s document, which was released in the wake of the outbreak of Covid-19, social lockdowns and business closures around the world. The aim of the proposed legislation is to help major companies and financial institutions and their investors understand such risks so they are better prepared for the consequences, and to encourage them to adopt sustainable practices.
The EU document proposes that:
• Listed companies, banks and insurance firms disclose their exposure to climate risks, biodiversity loss and disease pandemics.
• Investors and lenders disclose which “temperature scenario” their portfolios are financing, specifically whether they expect global temperatures to rise by more than 2ºC.
• Managers’ bonuses should be linked to their organisation’s climate-related achievements.
• Some firms should link CO2 emission reductions to directors’ bonuses.
further reading…
The EU has proposed legislation that will require listed companies, banks and insurance firms in its member states to report on their exposure to risks related to environmental matters such as biodiversity loss and disease pandemics. The EU Commission’s draft document cites experts who state that habitat loss and a warming climate may lead to greater transmission of diseases between animals and people, and that such factors, related to human activity, pose risks to organisations’ long-term prospects.
“It is important – now more than ever – to address the multiple and often interacting threats to ecosystems and wildlife to buffer against the risk of future pandemics,” says the EU’s document, which was released in the wake of the outbreak of Covid-19, social lockdowns and business closures around the world. The aim of the proposed legislation is to help major companies and financial institutions and their investors understand such risks so they are better prepared for the consequences, and to encourage them to adopt sustainable practices.
The EU document proposes that:
• Listed companies, banks and insurance firms disclose their exposure to climate risks, biodiversity loss and disease pandemics.
• Investors and lenders disclose which “temperature scenario” their portfolios are financing, specifically whether they expect global temperatures to rise by more than 2ºC.
• Managers’ bonuses should be linked to their organisation’s climate-related achievements.
• Some firms should link CO2 emission reductions to directors’ bonuses.