Climate change risk: Challenge for corporate governance
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Hugh Grove 
, Maclyn Clouse , Tracy Xu
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
The major research question of this paper is to analyze climate change risk as a challenge to corporate governance. Climate action failure was the environmental risk most frequently listed in the top ten country risks. It also becomes a major reason that many companies are taking their own initiatives on climate change action which poses an imminent challenge for corporate governance as boards of directors track and assess such initiatives by their own companies. Boards can play a key role in guiding their organizations into the next new normal in the wake of global pandemic, economic disruptions, and ongoing climate change problems. This paper identifies and studies the corporate governance risks and opportunities related to global climate change risk and provides recommendations to boards of directors. The major sections of this paper are global climate change risks, corporate climate change pledges, climate-related financial disclosures, major topics in the Global Climate Change report, whether companies are ready to manage major climate change risks and opportunities, climate-related investment benchmarks, and conclusions. Future research could investigate this climate change risk challenge with case studies or empirical studies.
Keywords: Climate Change, Risk, Corporate Governance
Authors’ individual contribution: Conceptualization — H.G.; Methodology — H.G. and T.X.; Resources — M.C.; Writing — Original Draft — H.G.; Writing — Review & Editing — M.C. and T.X.; Visualization — T.X.; Funding Acquisition — M.C.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G3, G30
Received: 29.11.2020
Accepted: 18.05.2021
Published online: 20.05.2021
How to cite this paper: Grove, H., Clouse, M., & Xu, T. (2021). Climate change risk: Challenge for corporate governance [Special issue]. Journal of Governance & Regulation, 10(2), 258–268. https://doi.org/10.22495/jgrv10i2siart7
