MMC Viewpoint

Companies thus face the prospect of a new litigation environment around global warming concerns, as well as rising expectations regarding the rigor of their internal assessments and disclosure of a wide range of climate risk implications. What may also be in the offing is the potential convergence of these two trends. Increasingly, shareholder derivative actions are centering on the adequacy and fairness of management disclosure — particularly as it relates to future trends that could have a profound effect on investment performance. That being the case, it's not difficult to imagine a scenario where shareholder derivative litigation focuses squarely on the quality of a company's climate risk disclosure.

-- Gary S. Guzy