The climate is changing. For corporates, this means building resilience to the risks associated with a changing climate and adjusting to new stakeholder expectations and also meeting the changing needs and demands of customers and clients as they respond to the impacts of climate change.

Ensuring that companies are braced for these changes requires clear ownership and accountability. Robust climate risk protocols and practices must be mainstreamed throughout the corporate structure together with routine disclosure of material climate risks, be they physical, transition or liability-related in nature. This is an investor and financial regulator expectation and increasingly an explicit regulatory requirement.

This Guidance Note will focus specifically on the question of physical climate risk, as to date conversations about physical risk have been harder to have.. By asking pointed questions and understanding what is and is not a satisfactory answer, Non-Executive Directors play an instrumental role in driving informed and proportionate corporate action on physical climate risk, helping to ensure that companies are able to adapt and thrive in the new climate reality, and meet the objectives of the Paris Agreement.