Financial Institutions and the Role of Information and Disclosure in Corporate Accountability and Climate Change

Investigators

• Rajesh Vijayaraghavan
• Carol Liao

Background

Financial institutions play a critical role in climate change dynamics through lending, investment, and underwriting practices. Recent regulatory and accounting standards developments highlight the increasing pressure on these institutions to disclose climate-related financial risks. This project investigates how financial institutions' accountability mechanisms, particularly through legal avenues, influence corporate behavior and climate resilience, focusing on the effects of disclosure or lack thereof on systemic climate-related financial risks.
 

Research Objectives

The research aims to explore the accountability of financial institutions for insufficient climate-related disclosures, examining both the qualitative and quantitative aspects of such information and their impact on legal actions and financial practices. It will analyze the consequences of negligence claims related to climate risks, such as wildfires, on corporate behaviours and the financial sector. Additionally, the study will map out the evolving legal and regulatory landscape influencing financial institutions, particularly in relation to insurance dynamics and natural disaster coverages. This includes assessing the broader implications for investor behaviour, corporate policy development, and governmental strategies for climate risk management. The goal is to underscore corporations' legal and fiduciary obligations to devise comprehensive climate strategies that address risk resilience, mitigation, and adaptation.