Evolution of Climate-Related Disclosure Guidance and Application of Climate Risk Measurement in Research

Abstract

Climate risk disclosures originated as part of more general sustainability disclosure frameworks but now plays a prominent role in the evolution of mandated sustainability disclosures. This chapter explores the evolution of climate risk disclosure guidance and how it increasingly reflects the multi-dimensional nature of climate risk. Research on climate change has followed a similar path, with evolution in the measures of climate risk that researchers employ in their research. The chapter discusses use of different measures of climate risk in existing economics, accounting, and finance research and explores issues associated with how the measures affect interpretation of research results. The chapter concludes with an appraisal of current policy and practice and its future trajectory as well as suggestions of avenues for future academic research on climate risk.

Keywords: Climate risk, disclosure, measurement, sustainability frameworks, materiality, climate risk research