Climate Risk as Corporate Strategy: Governance, Disclosure, and Opportunity in the Face of Climate Change
A market-based approach to climate change can reveal not only risks but also a wealth of new opportunities for businesses, according to Michael Zimonyi, Policy & External Affairs Director at the Climate Disclosure Standards Board (CDSB). Speaking at a high-level seminar in Santiago, Zimonyi emphasized that climate-related impacts must be reported with the same rigor and transparency as financial information. The CDSB—an international consortium of business and environmental NGOs—provides companies with tools to do just that.
The event, titled “Rumbo a COP25: Cómo Enfrentar el Riesgo Climático desde el Directorio” (Path to COP25: How to Address Climate Risk from the Board of Directors), was jointly organized by EY Chile and Columbia Global Centers | Santiago, with the support of the Santiago Stock Exchange. It brought together national and international experts to discuss the growing role of corporate boards in addressing climate risk.
Zimonyi pointed to the growing relevance of disclosure frameworks as countries and companies prepare for greater regulatory and investor scrutiny around sustainability. His remarks were echoed by Héctor Lehuedé, partner at corporate governance consulting firm Razor Consulting, who noted that in 2017 alone, insurance companies paid out over US$135 billion in climate-related disaster claims. Still, an additional US$195 billion in losses remained uninsured. “Yet amid this climate risk landscape,” Lehuedé added, “there’s a US$2.1 trillion opportunity in businesses that offer low-emission products, recycling, innovative production methods, and sustainable services.”
Despite this potential, most corporate boards are still “blind” to the realities of climate risk, Lehuedé warned, urging directors to assume a more proactive role in climate governance and strategy.
Opening the event, EY Chile President Cristián Lefevre highlighted Chile’s pivotal position as host of the COP25 global climate conference, originally scheduled for December in Santiago. He stressed that the country has a unique opportunity to lead by example, particularly by reinforcing the role of corporate governance in climate mitigation and resilience.
The event continued with a panel discussion on how boards can better respond to the challenges of climate change. Panelists included:
- Valter Moro, General Manager, Enel Chile
- Karen Poniachik, Director, Columbia Global Centers | Santiago and corporate board member
- Arturo Tagle, President, BancoEstado
- Francisco Ulloa, Managing Director, West Coast South America, Maersk
- Elanne Almeida, Partner, Advisory Services, EY
Poniachik emphasized the legal and reputational risks associated with poor environmental performance and called for integrating environmental issues into companies’ operational and financial structures. She recommended adopting KPIs for operational resilience, ensuring full ESG risk disclosure, and appointing climate-knowledgeable professionals to corporate boards. “Aligning executive incentives with long-term sustainability goals, including climate-related targets, is essential,” she said.
Tagle acknowledged Chile’s progress still falls short but pointed to BancoEstado’s efforts to reduce its carbon footprint and implement energy efficiency programs. Meanwhile, Ulloa underscored the urgency of decarbonizing the global logistics sector. “Over 90% of goods in the world market are shipped. We need to decarbonize the supply chain, but this requires a collective, top-down effort,” he said, referencing Maersk’s commitment to achieving net-zero emissions by 2050.
To conclude the seminar, Joaquín Cortez Huerta, President of Chile’s Financial Markets Commission (CMF), announced that the CMF is finalizing a significant regulatory update. The forthcoming changes will require listed companies to include ESG metrics—especially environmental issues—in their annual reports, representing a critical shift toward mandatory climate disclosure.
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