The pressure on the oil majors to accelerate their shift towards renewables from activists, the law and regulation is increasing all the time. But it's not only oil majors who should be concerned about their exposure to climate change liability.
Last night we hosted a presentation by the Commonwealth Climate and Law Initiative (CCLI) where they launched four reports on directors' duties to take account of climate change, including the physical risk it poses and society's attitudes; and the duty to make accurate disclosure about climate risks. The reports are relevant to boards of a wide range of companies, including those in the financial services sector; and to their D&O insurers.
Three of the authors were joined on stage by Lord Carnwath (a judge in the UK's Supreme Court). I moderated a lively and interactive panel discussion where it was pointed out that a number of fossil fuel companies (particularly coal) have already seen sharp adjustments in their share prices, in some part due to their failure to react quickly enough to transition risk.
Renewables accounted for half of global growth in electricity generation last year and now make up a quarter of total capacity if hydropower is included, according to the International Energy Agency. Meanwhile, a widening range of countries and cities, from the UK and France to Beijing and Mexico City, have announced long-term plans to ban or restrict sales of air-polluting petrol and diesel vehicles in favour of EVs.