A new effort to educate hundreds of independent corporate board members about the potential liabilities and strategic business opportunities that global climate change can create for companies has been launched at Yale University.
"Climate change is no longer the purview of scientists only," said Gus Speth, dean of the Yale School of Forestry & Environmental Studies.
"The widespread ramifications of unchecked climate change require that more leaders in our society understand its implications."
To devise the initiative, Yale has teamed up with risk and insurance services firm, Marsh, as well as Ceres, a coalition of investors and environmental groups working with companies on environmental and social issues.
"Corporate directors are going to need a strategic and analytical underpinning to navigate the transformations that climate change will require in their businesses in the coming years," said Speth.
"These changes offer great economic opportunity to those directors who act in a timely way. As a result of its combined academic, nongovernmental, and corporate leadership, our new initiative will be well positioned to deliver needed training and support to participating corporations."
Brian Storms, chairman and CEO of Marsh, said, "Increasingly, corporate leaders are asking us to help them better understand their total spectrum of risk, and how it affects their overall business strategies.
"Aligning with Yale and Ceres to educate top corporate leaders about one of the most critical business risks of our time demonstrates our strong commitment to addressing this important issue, as well as our growing focus on delivering world-class risk advisory services."
Initial training of more than 200 independent U.S. board members of Fortune 1000 companies will begin this winter and the training sessions will be offered across the country through September 2008.
Courses and materials are being designed to provide insights into the practical financial, legal, business and investment implications of climate change for corporations.
Many companies focus on avoiding the liabilities related to climate change. However, Brian Storms believes there are as many opportunities as risks associated with climate change.
"Those companies that understand true enterprise risk will be the ones that seize upon the growth prospects that threats like climate change create," he said.
According to Ceres President Mindy Lubber, who also directs the $3 trillion Investor Network on Climate Risk, climate change represents perhaps the biggest single challenge to companies in the 21st century. "Major investors are increasingly demanding that companies sharpen their focus on the impacts from climate change, whether from new regulations, physical changes or growing global demand for low-carbon technologies," she said.
"This program will help ensure that independent directors ask the tough, smart questions of the companies they oversee."
Lubber added that focusing on climate is the first step in educating corporate directors on a broad array of environmental and social issues businesses will face in the coming years.
"As competition for business resources intensifies - from materials to labor, water to oil - this program will work to help board members address these challenges," she said.