International Symposium on Directors’ Duties and Liability Exposures for Climate Change Damages
The Commonwealth Climate and Law Initiative (CCLI) is organising two high-level symposia in South Africa on the legal basis for directors and trustees to consider, manage, and report on climate change-related risk, and the circumstances in which they may be liable for failing to do so. These events are relevant to a wide range of organisations working on or interested in climate change issues.
It is now clear that climate change presents material – if not unparalleled – economic risks and opportunities. The Bank of England Prudential Regulation Authority and the Australian Prudential Regulation Authority, together with others, have recently warned of the potential liability exposure of company directors for i) their company’s contribution to anthropogenic climate change, ii) a failure to adequately manage the risks associated with climate change, and iii) inaccurate disclosure or reporting of these factors. These emerging exposures have implications for corporate governance in climate-risk exposed industries (from financial services to mining, infrastructure, agriculture, and beyond), and for the insurance sector (in terms of professional indemnity and directors’ and officers’ insurance). Despite these risks, there remains little in-depth analysis of how prevailing corporate governance laws and fiduciary duties facilitate – or constrain – the actions of company directors confronted with complex climate change challenges.
In light of this and related developments, the CCLI has been established as a research, education, and outreach project by the University of Oxford Smith School of Enterprise and the Environment, HRH The Prince of Wales’s Accounting for Sustainability Project, and ClientEarth. CCLI is initially focused on four Commonwealth countries (Australia, Canada, South Africa, and the United Kingdom) and is examining the legal basis for directors in common law countries to take account of physical climate change risk and societal responses to climate change, under prevailing statutory and common (judge-made) laws.
Download the Directors’ Liability and Climate Risk: South Africa – Country Paper