That's the message from the Institute of Sustainability and Environmental Professionals (ISEP), which has published new guidance warning that directors who fail to properly consider climate-related risks could be breaching their legal duties under the Companies Act 2006.
As climate impacts intensify and regulatory expectations evolve, boards are increasingly expected to show they have identified, assessed and acted on material climate risks. From supply chain disruption and rising insurance costs to investor scrutiny and mandatory sustainability reporting, climate risk is becoming part of everyday business decision-making.
ISEP's new guide, Managing Climate Risk in Your Business: A Guide for Business Leaders and Sustainability Professionals, offers practical advice on embedding climate risk into governance, enterprise risk management and strategic planning.
Rather than introducing new legal obligations, the guide explains how existing duties are increasingly being judged through a climate lens – helping organisations understand what good board oversight looks like and where the biggest governance risks lie.
"Where climate risk is clearly foreseeable and material, a complete failure to consider it – or doing so without good faith – could expose directors to claims that they have not met their duty to protect shareholder value."
Sarah Mukherjee, CEO, ISEP
Co-author Gill Mulroe FISEP, Head of Sustainability at Bupa Dental Care, says organisations need to focus their efforts where climate risks are genuinely material, particularly as UK Sustainability Reporting Standards and international disclosure requirements continue to tighten.
Take action: whether you're advising boards, managing sustainability strategy or strengthening organisational resilience, this new guidance provides practical tools to help embed climate risk into business decision-making before it becomes a legal or commercial liability. Download the guide today and make sure your organisation is ready for the next phase of climate governance.
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