In the context of BlackRock's climate 'epiphany'
last month, as well as clear indications from significant fund
managers such as Sir Christopher Hohn's TCI Funds Management
that they will be taking more overtly activist steps to catalyse
climate action in future, listed company boards have never been
under greater pressure to fulsomely explain the environmental,
social and governance (ESG) footprint of their
business.
However, in their rush to meet shareholders' demands for
greater information, directors are often unwittingly exposing
themselves to additional litigious risks, particularly with respect
to forward-looking statements on ESG risks and strategies. Common
examples include statements regarding the impact of climate change
on market demand for the company's products, the risks which
will affect the company in the future and, depending on how they
are framed, climate scenario plans.
