New US OSHA Voluntary Protection Program online portal
The United States Occupational Safety and Health Administration (OSHA) has announced a new online portal for submitting applications to its Voluntary Protection Programs.
The climate risk landscape is constantly evolving and being reshaped by a number of factors including, globalization, political and economic events and heightened shareholder activism. Further, the shifts underway are unprecedented – in both scope and pace – with risk exposure being triggered even in the absence of established or “black letter” law.
“Climate risk: any risk resulting from the effects of climate change on natural and human systems.”
This is new territory for many, and there is no question that companies need to stay abreast of developments through active monitoring and obtain guidance on what they should be doing. It is especially important given the expanding number of international organizations and groups pushing standards of conduct and compliance above and beyond current regulations. We see several key implications and considerations at play in this evolving risk landscape, including:
Expanding oversight and growing collaboration among international regulators – In terms of both increased societal pressure and as the complexity of climate change itself is better understood and feeds back into policy.
Disruption through innovation and technology – Accelerating change in society and in organizations, driven in no small way by rapid advances in digital technologies, such as artificial intelligence and remote sensing, predictive analytics and machine learning.
Inconsistent and widely variable reporting – According to a study commissioned by the Chartered Professional Accountants of Canada, more than three-quarters of TSX-listed companies are making climate-related disclosures, however few may disclose board or senior management oversight of climate-related issues, proactive strategies to transition to a low-carbon economy or even financial metrics or targets.1
Growing financial scrutiny – Assessment of climate risk by investors, their financiers and financial institutions continues to expand, with initiatives like the Financial Stability Board’s recent Task Force on Climate-related Financial Disclosures (TCFD). Also, numerous securities exchanges and oversight groups in the U.S., the UK and Australia are calling for complete and transparent reporting of not just an organization’s assessed risks stemming from climate change, but its capacity and readiness to respond.
Rising number of lawsuits – With high-profile actions such as New York City’s recent lawsuit seeking billions of dollars in damages from some of the world’s largest listed energy companies for contributing to climate change, or the lawsuits filed in California against five oil companies for billions of dollars to finance infrastructure that would deal with rising sea levels blamed on climate change.
As this changing set of global standards is increasingly used to identify best-in-class organizations, energy companies in particular face heightened scrutiny across environmental, social and governance (ESG) contexts.
“Organizations are facing increasing and significant scrutiny by regulators across environmental, social and governance issues. Organizations have to actually look at this with greater focus, recognizing that these obligations extend beyond black letter local law and regulations and that it is no longer an option to sit back and wait to see how it might play out. ” — Jane Caskey, Global Head, Risk Advisory.”
With market and shareholder expectations of conduct and operational compliance continuing to exceed legal minimum, you are faced with deciding what your company should do versus what your company must do. The first step is to conduct an audit to determine your risk profile. Then, develop an ESG strategy aimed at meeting risk-relevant operational and reputation objectives. Here are some questions to ask yourself:
Considerations for an ESG strategy:
Companies, especially those in the energy industry, can’t afford not to assess climate risk nowadays and their tolerance for the reputational issues that may arise. It is critical to determine your organization’s risk tolerance, to develop an appropriate strategy and to ensure that you are prepared to respond to an incident – keeping in mind that complacency itself is one of the most significant risks.
For more information, contact our energy team.
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1 CPA Canada study of climate-related disclosures by Canadian public companies (https://www.cpacanada.ca/en/business-and-accounting-resources/financial-and-non-financial-reporting/sustainability-environmental-and-social-reporting/publications/climate-related-disclosure-study).
© Norton Rose Fulbright LLP 2021