June 27, 2022 | Agenda Week | 1 minute read

A recent survey conducted by FT Agenda found that more than one-third of corporate boards of directors do not have a written climate transition plan in place, despite ongoing pressure from investors, regulators and other stakeholders for boards to demonstrate progress on climate change.

According to Troy L. Harder, a partner in Bracewell’s Houston office, “Many companies have been taking a ‘wait and see’ approach to climate transition — waiting for a regulator like the SEC to mandate climate related disclosures and to set standards for measuring and reporting.”

“Talk is cheap, especially in the case of [greenhouse gas] emissions goals, where milestones are 20 or 30 years in the future, when it will be the next CEO’s problem,” Harder added. “With the SEC’s recent climate disclosure proposal, many companies that announced net-zero goals are now realizing they may have to disclose data to back up progress against those lofty goals, and that statements about such goals may become subject to the enhanced liability of the securities laws.”

Harder suggests that quarterly updates, along with more robust annual reviews, on a company’s progress toward its climate transition goals is appropriate.