The State of California announced the launch of the Climate-Related Risk Disclosure Advisory Group, aiming to support the state through the development of a climate risk disclosure standard, consistent with federal and international best practices.
California Governor Gavin Newsom said:
“There is no question that climate change is having an immediate impact on California’s fiscal and economic health. This effort will improve our understanding of climate risk from an investment perspective, ensuring California leads not only on climate policy, but on safeguarding public dollars in the face of increasing climate risk and advancing an equitable recovery.”
The group will form part of California’s cross-government framework for urgently addressing and mitigating the impacts of climate change. It will focus on identifying best practices across national and international climate risk disclosure, as well as on the unique challenges and opportunities that might arise when applying climate risk disclosure to a public sector decision-making context.
According to the Governor’s office, the new group is being launched as the state is experiencing the financial impacts of climate-related crises, including recurrent drought conditions, the devastating wildfires of the past three years, and the extreme heatwave of 2020. The initiative also aligns with federal action on climate risk disclosure, including the recent announcement by the SEC that it will review its guidance for public company obligations for disclosures related to climate change risk.
Kate Gordon, Advisory Group Co-Chair, Director at the Governor’s Office of Planning & Research and Senior Advisor to the Governor on Climate, said:
“For every dollar we spend mitigating climate risks, we can save at least six dollars in disaster response, so understanding and adapting to these risks is not just smart policy – it’s our fiscal responsibility. California has already established itself as a national and global leader in fighting the climate crisis, and understanding climate risk disclosure will advance this effort and set an example for the rest of the United States and the world.”
The new group will be led by the Governor’s Office of Planning and Research in partnership with Stanford University’s Sustainable Finance Initiative.
Alicia Seiger, Advisory Group Co-Chair and Managing Director at the Precourt Institute’s Sustainable Finance Initiative at Stanford University, said:
“Climate change is not only an environmental issue, it’s an everything issue. Climate change affects all parts of the economy, all sectors and geographies. It’s foreseeable, and scientists have a high level of certainty about how risks will materialize in the future. We cannot delay action.”