
Contents
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I. Principles and Frameworks That Inform Effective Climate Governance I. Principles and Frameworks That Inform Effective Climate Governance
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II. Effective Climate Governance II. Effective Climate Governance
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i. Getting Started i. Getting Started
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ii. Climate Competent Directors and Pension Fiduciaries ii. Climate Competent Directors and Pension Fiduciaries
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iii. Effective Governance and Fiduciary Obligation in Engaging Asset Managers and Engagement Service Firms iii. Effective Governance and Fiduciary Obligation in Engaging Asset Managers and Engagement Service Firms
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iv. Monitoring Progress against Goals iv. Monitoring Progress against Goals
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v. Broadening Climate Expertise v. Broadening Climate Expertise
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vi. Due Diligence is Both Good Governance and a Strong Defence to Decisions Made vi. Due Diligence is Both Good Governance and a Strong Defence to Decisions Made
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III. The Taskforce on Climate-related Financial Disclosure (‘TCFD’) Framework III. The Taskforce on Climate-related Financial Disclosure (‘TCFD’) Framework
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i. Disclosure of Governance of Climate Risk i. Disclosure of Governance of Climate Risk
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ii. Disclosure of Climate Strategy ii. Disclosure of Climate Strategy
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iii. Disclosure of Risk Management iii. Disclosure of Risk Management
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iv. Disclosure of Metrics and Targets iv. Disclosure of Metrics and Targets
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v. Adoption of the TCFD Framework v. Adoption of the TCFD Framework
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IV. Climate Scenario Analysis as a Potential Governance Tool IV. Climate Scenario Analysis as a Potential Governance Tool
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V. Integrated Assessment Models and Climate Change Financial Risk V. Integrated Assessment Models and Climate Change Financial Risk
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5 Effective Climate Governance
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Published:November 2020
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Abstract
Having set out the legal duties of directors, officers, trustees, and investment managers in Chapter 4, this chapter discusses principles and frameworks that can inform effective climate governance. It offers advice on how to get started. It raises the notion of having climate competent directors and pension fiduciaries. Such fiduciaries may rely on engaging asset managers and engagement service firms, but they cannot delegate their fiduciary obligations. The chapter examines how boards can measure progress towards decarbonization. It examines the framework on climate governance proposed by the Taskforce on Climate-related Financial Disclosure (‘TCFD’), including disclosure of governance of climate risk, climate strategy, risk management, and metrics and targets. It examines two emerging tools—climate scenario analysis and integrated assessment models.
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