CERES has released their excellent new guidance on climate change issues. The full text is below. Highlights (Emphasis added):
Companies should disclose independent board oversight of climate-related risks and opportunities, which includes monitoring by the board of each company’s science-based greenhouse gas (GHG) emission reduction targets.This board oversight should be clearly reflected in a publicly available governance document on the company’s website, such as a board committee charter or – if only at the full board level –
corporate governance guidelines. If a board committee has oversight, the committee should
ideally be composed of only independent directors. All committee members should have attended at least 75% of the committee’s and full board’s meetings over the past year, unless an acceptable reason for absences is disclosed in an SEC filing.
Companies should disclose sufficient information to reveal the “climate competency” of their boards. Such disclosure could be in a company’s proxy statements or corporate social responsibility (CSR) reports, using disclosures such as board matrices and director biographies that support the experi- ence and expertise listed in the board matrices.
No one director will make a “climate competent” board. Rather, a board should assess and be able to explain how the different directors’ experience contributes to thoughtful discussions and meaningful connections with the long-term strategy, given the unique climate risks and opportunities the company faces.
Company boards should make one or more independent directors available to engage constructively with significant shareholders on climate change risks and opportunities that are financially material to the company.Significance of a shareholder should be determined not only with respect to assets under manage- ment, but also by other factors, such as a shareholder’s recognized leadership in the climate space. For an assessment of the materiality of climate-related issues, consideration may be given to the six “Environmental” issues listed for the company’s industry in the SASB Materiality Finder.